May 29, 2014
A lot more businesses are shifting toward becoming a global entity after realizing the benefits it provides. The bigger the range the business can expand to, the greater the success the business will achieve to sell its products or services to. By offering a product overseas the business can offer different types of discounted prices for their services. This is turn will save the business an abundance of revenue. In every country a product or service is used daily without a second thought by the consumer as were that product or service originated from. Globalization is the norm and is expected by a wide varied of consumers.
Globalization is a process of interaction or integration among people, businesses, and governments of different countries or nations. Globalization is a driven process developed with international trade and investment ...view middle of the document...
Most businesses realize that doing business globally can significantly its profits and benefits other countries. Two major drivers of globalization include “decline in barriers to the free flow of goods, services, and capital as well as technological change” (Hill, 2009). Once the barriers were lowered, it became easier for companies to expand its business into other countries with few difficulties. In the past, foreign investment was restricted; however, barriers have been removed to allow foreign investment to occur. Another benefit involves the option to streamline production by the benefit producing goods in another country provides and having the production stage spread throughout several countries. One example is “the General Agreement on Tariffs and Trade where 150 member states have worked to lower barriers to the free flow of goods and services” (Hill, 2009). The Foreign Direct Investment is “designed to protect and promote investment between two countries and is attributed to an increase in bilateral investment treaties” (Hill, 2009). A final example of lesser barriers reveals an increase in global sales because it becomes higher than global exports. Technological advancements can be recognized around the world and plays a competitive role in globalization. One example is the internet which is viewed as “the information backbone of the globally economy” (Hill, 2009). Moreover, transportation has changed dramatically over the years from transporting people to transporting goods to become more efficient and effective. Lastly, “the single most important innovation has been development of the microprocessor, which enabled the explosive growth of high-power, low-cost computing, vastly increasing the amount of information the individuals and firms can process” (Hill, 2009). The driving factors can be political, social, cultural, and technological influences and based upon the country demographics.
Hill, Charles (2009). International business: competing in the global marketplace. New York: McGraw-Hill/Irwin.
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