Reasons for Companies Going Internationally Essay example

Globalisation is the internationalization of trade and often forces businesses to adopt new strategies for operations to suit different cultures and economies. The often easily saturated domestic market has triggered many large

In our day and age, the next step for every company is “to go global”.

Globalization may be defined as the integration of the world 's people, firms and government. In the modern context, globalization is usually the result of closer ties in international trade, known as bilateral trade agreements. The WTO and NAFTA are two examples of such bilateral trade agreements. With such agreements, cross-country investment increases. This increase in investment is aided by the increase in information technology and communications, which has undergone a significant advancement over the last two decades with the rise of the Internet and mobile telephony (Green, 2013). It is important to the business to expand; global expansion and globalization would a positive business decision to complete in this process due to the strategic goals and objectives the company possesses. Healthy growth can be accomplished by globalization of specific areas selected and determined through research of market and development of these areas outlined within.

Nowadays, globalization has a great impact on companies, their internationalization process and how they are seen in the different markets where they have presence. Globalization may affect the company in almost every aspect.

* With so many large markets available, there is tons of revenue to be made overseas.

U.S corporations build manufacturing plants abroad because international operations are becoming highly important to the national economy. Companies decide to go global for the following reasons:

Companies across the United States do business in other countries regularly and for various reasons. Some organizations move in to international markets to take advantage of other countries strengths and resources which allows companies to expand and grow their business, revenue, and international presence. The other reason that U.S. organizations move into international markets is to take advantage of the human resource talent, innovation, and technologies. For instance, some U.S. companies have expanded into Asian markets to leverage the technological expertise of local populations, which not only boosts business and capabilities, but also helps to expand their client base (Kokemuller, 2016).

-acquiring resources: foreign sources may give companies lower costs, new or better products, additional operating knowledge

The process of globalization has numerous significant effects on countries, organizations, and individuals. These effects can be observed in the quality of products, in their prices, but also in their availability. Because of globalization, numerous companies prefer to expand their business on international level. Some of them outsource some of their processes and activities to cheaper destinations that allow them to reduce their investments.

Globalization offers industries many ways to increase their profits. Since businesses and corporations have access to a wider range of potential clients, they have a chance to increase profits. Global competition also

For the globalization of competitors, companies are aware that if they leave companies overseas too long without challenge or competition, their investments or foreign operations in the world market may be so solid that competition will be difficult. Therefore, they try to act quickly.

Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.

Well known companies like Nike, Microsoft, Sony, Shell Group are just some of the big companies that went global and expanded their trading around the world, they are large businesses that operate internationally in many countries. Development of worldwide integration urges companies to reach out international markets and interact with foreign customers. Businesses focus on fulfilling the demand of the market by its products or services, besides their target is increasing profit, in order achieve these goals they favor to expand their work in a foreign market. Other reasons to internationalize their business may be to become

Globalization is important to understand in order to determine what worked in the past and can be successful again in the future. Our many cultures, ideals and growing technology form together to create an extremely global world. We use products that were made on the other side of the world, and are taxed on practically everything. Whether the effects of our global society is good or bad, there’s no doubt that the world is constantly changing and impacting our livelihoods, so we must adapt accordingly in order to succeed.

Up to now the literature review has given an insight into the concept of globalization, and the understanding of several academics in the light of how this phenomenon developed over the years. It is then essential to cover what the economic benefits of globalization are, and how these may impact a sector or company. Most of the literature study’s that have been written on the economic benefits of globalization have been after 2006. The reason is because the studies used the globalization index which was created by Dreher (2006) then further developed by Dreher (2008) again. Many of the empirical studies used this index as indicator as a base to form their findings.