International Business
During the last decade since the year 2000, Due to the world became globalised. Many contracts and trade organizations have been increasing. Barriers to international trade decreased down and that bring the number of firms turning themselves into global strategy player to gain competitive advantage as there are so many advantages of becoming global player. Firstly, the value chain can be divided across many locations. Secondly, part of manufacturing process can be located to low-cost countries while Research and development can be located in the region that specialized competencies. Thirdly, in case of service companies, due to the value of chain have to be generated locally therefore there is ways of opportunity to centralized activities to low cost locations. And there are many more advantages (P. N. Gooderham and O. Nordhuag,2004). However, before going globalization, causes of this rapid expansion of trade need to be analyzed in the first place. It was reported that this rapid expansion of overseas trade in recent decades are from;
Rising real living standard
Trade liberalization (world trade organization, expansion and depending of European Union etc.)
Transition to market systems in Eastern Europe.
Rapid growth in the Asia tigers and more recently in China and India.
Privatization in and liberalization of domestic markets
Deregulation of international capital markets
Avoid transportation costs
Improvement in global communications
(http://www.tutor2u.net/business/strategy/global-business-globalisation.html)
All those factors drive economic of scale becomes global. Which brings leaders of business thought in term of global markets not only national markets. Actually business and nation have been conducted trade across national boundaries for many passing years. The main factors or reason in term of business strategy why firms enter to new market can be...
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