Question

Global expansion is a goal that corporate leaders see when they look at their company plans, but it is not always the best idea to pursue. Any leader looking to take his/her company global needs to do the research into what it will require, as well as weigh all possible pros and cons of such a move.

We want to determine how much value global expansion actually adds to the corporate business strategy. Financially, the question is how much will we gain in sales or profit from going global? It was discussed in an article through the San Diego Business Journal (2013) that since 2011 and through 2018, the percent of middle market companies that went global continued to see an increase in overseas sales year after year. They also pointed to a few reason that global expansion was growing. One of these was the idea that overseas economies were out stripping the domestic growth. They also found that suppliers and vendors were capable of moving overseas as well to support their clients’ expansions.

Kumar & Waheed (2007) look at some of the benefits of global expansion and how three of the major countries in international business carry many more strengths than weaknesses. Technology, highly skilled labor and political stability allow for a smoother transition globally amongst the United States, Europe and Asia.

Fliess & Busquets (2006) discussed the trade barriers involved with companies that are working globally. This included tariffs, customs and domestic regulations. Companies that may have planned to take their business global can start to run into these types of barriers and before they know it, they have spent much more than planned of their investment in legal work and other red tape just to get their business set up.

Making the decision to take a business global is a decision that must be researched from all angles to make sure it is a smart investment and the resources are there to make it happen. Whether a small company or a large company, the regulations, tariffs and politics could make it a much more expensive venture that originally thought. This does not mean it is a bad idea, it just means it could take a bit longer to get set up or to recover the added expenses. The corporate business strategy will be affected by a global move whether for better or worse.

OPEN A DISCUSSION FROM THIS ASK QUESTIONS AS WELL.

Answer 1

Answer: In my opinion a global trade has more advantages than disadvantages.Global Trade has two aspects - brings revenue to the nation however also poses a threat for many industries. A country can gain from international trade if it exports goods for which it is a low opportunity cost producer. A nation that has a lower opportunity cost of producing a good has a comparative advantage. Specialization and trade along the lines of comparative advantage permits the countries to consume more than if they were to produce just for themselves. Thus according to global trade theory, a country can gain by the import of goods that they can be obtain more economically from foreign producers. Hence a nation can benefit if it specializes in producing those things it does best (produces at a low cost).

Global production results in improving economies of scale. Launching a product globally means more markets in which it can be sold, thus generating more money and neutralising risk. Economies of scale can save organisation money in terms of labour, packaging and marketing material costs, too. It helps organisation in learning how to compete with international companies to sell that product, thus leading to innovations and research. Global production is useful to product life cycle also. An organisation can phase its release of products; introducing older products into newer markets which are less developed and saving the launch of a new product's which are the most recent version for well-developed markets.

The questions that I will ask are as follows:

-- How political, stability, consumer preferences, culture, language and history can affect your business dealings globally?

-- How can the regulatory policies of government affect an industry's global competitiveness?

-- As the technology develops, what are the impacts onto global marketing, consumers and producers?

-- How an effective internal control framework components would apply to key business processes in a global company

-- Does global aid do more harm than good when it comes to a nation's economic development?