Introduction to Globalization
Globalization has resulted in a global economy where resources and competition are on an international scale. Consequently, this has created jobs through outsourcing. This results in an increase in job opportunities. For instance, big companies such as Sony and Ford have established business in different parts of the world, which has provided job opportunities for exporters and importers.
Several approaches can be applied to enter the global market. A market entry strategy that can be used is global sourcing. The investment opportunities that can be exploited with these market entry strategies include joint ventures and foreign subsidiaries.
Global sourcing involves purchasing of raw material and resources from the global market. This is normally carried out since there are varying wage gaps across different countries. For example starting a business in the automotive industry in Italy may involve sourcing material parts and instrument panels from Mexico, braking panes from Germany and electronics from Malaysia. Services center businesses may require having call centers in places such as the Philippines or having X-rays read by physicians in India.
Forms of international businesses
This may include licensing agreement, export-import business, and franchising. Export and importing involves the selling of locally made products in foreign markets and buying of foreign-made products and selling them in domestic markets. Licensing agreements involves foreign companies making payments to sell another company’s product in a specified region. A challenge to this is counterfeiting. An example of this is New Balance licensing a Chinese supplier to produce one of its brands. Franchising involves foreign firms buying rights to use another firms name and operate in its home country. Examples include McDonald, which sells its facility designs, equipment, and product ingredients to foreign investors in the international market.
Schermerhorn, John R. Exploring Management. Hoboken, N.J: Wiley, 2011. Print.