Why Companies Expand Beyond Their Own Borders Essay

2. Why do companies tend to thrive in global markets when their country of origin enjoys a comparative advantage

The business internationalise means a company’s production and business activity are not only confined to one country, but also integrate the different countries’ raw material and labour and technologies to

Let us consider China for our example. China is the largest market in Asia and as such, it is an object of great interest for expanding companies. Many companies have already taken advantage of the opportunities afforded by dealing with China and many more will surely

The globalization and corporate expansion of American companies has promoted inequality in the United States and the world, largely through means defined to be inhumane. Corporate America has embraced a ‘hands-free’ method of globalization. By both outsourcing labor and targeting more consumer groups, especially those yearning for the American Dream, corporate America has successfully increased profits. Almost everyone on earth is feeling the negative effects of corporate America’s actions. By outsourcing labor, prohibiting unions, disadvantaging women, and driving wages down, globalization and corporate expansion advocates for inequality in both the United States and the rest of the world.

In foreign markets apple is able to produce with fewer government regulations, which results in lower production costs, making the profit margin larger for apple. Diversification is another major incentive for apple because it spreads the risk in cases of difficulties or if one market suffers from recession, lowered demand, or changed preferences. In these circumstances apples sales and profits wont be as significantly impacted. This allows apple to cushion economic cycles to protect their company. Foreign markets also allow for economies of scale meaning apple can produce by mass production; this can lower the cost of production and again increase profit. By spreading into a global market it allows Apple increased sales and the ability to find new markets.

Many companies today want to expand their business to the international business, which can bring cost down and profits up. Taking a business internationally means knowing the rules and regulations of the countries you are entering. There can be many issues with going global which include cultural barriers, diversity issues, multicultural issues, political issues, and economical issues. It is very important to know how important expansion is to the company and what implications will come from going global.

Due to internationalization these companies have been able to spread their risk. Therefore, if one market is not performing they can rely on the other (diversification)

The rapid pace of Globalization has led to a change in the global economy during the past several decades; it is believe that factors such as trade liberalisation, access to cheaper labour and resources, similarity of consumer demand around the world, and advances in technology and communication has widened the market of consumption, investment as well as production on a global scale. These globalization driven factors created new challenges and global competition for businesses around the world thus as a response many companies decided to expand their operation across national borders in order to be competitive. A company that operates their business in at least one country other than its country is called Multinational

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

If the product is not doing good in the home country, why we should try to go global? May be some boss may think the foreign country will be adopting the product better compare to the home country, and I think this is wrong. The Product is the company’s core.

The elements that a company needs to have global success is knowing the culture of the countries that they are going to do business with and sending the right workers to the countries they will do best in to do business. The obstacles for global expansion would be like not finding good supporting countries like a company like boeing and now finding good staff that can do business in a certain country.

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

Reasons why corporations like PepsiCo. need to globalize their operations include a need for competitive advantage against rivaling companies, increase their economies of scale to lower their production and distribution costs in moving products into new and existing markets, entering new markets to increase brand image and brand loyalty, and to increase net earnings which can then be distributed as dividends for their stockholders.

For any company going out for the foreign market is because of any one out of globalization, reducing tariff all over the world, to increase the market share, saturation of the local market, for getting the economies of scale of production, to use their excess capacity and use the resources where it is available at law cost.