Chapter Three The World Marketplace: Business without Borders Review Questions 1. What countries represent the largest global business opportunities for the next decade? What factors determine the size of the opportunity? China, India and Brazil are some of the largest growing global businesses. These comes from many different factors; GDP growth and population are two major causes. China has the largest populations in the world along with the fastest growing GDP percentages. Brazil’s population is not as large but does has a high GDP percentage, and also a high Dollar Pre Capital GDP. 2. Why do companies tend to thrive in global markets when their country of origin enjoys a comparative advantage …show more content…
Instead of relying only on domestic workers, many companies also outsource some of their labor into foreign markets. This practice can have negative effects on the economy overall, individual businesses can often benefit from this practice. Outsourcing offshore can allow companies to tap into foreign markets and expand their businesses. 6. Outline the potential pros and cons of the 3 key strategies for developing foreign markets: exporting, licensing and franchising, and direct investment. Exporting |Pros: |Cons: | | | | |Access to Factors of Production |Product Modification | |Reduced Economic Risk | Export Licenses and Documentation | |Inflow of Innovation | Financial Risk | Licensing and Franchising |Pros: |Cons: | | Marketing Support |Company Image | | Business
In my point of view, it is a misconception when claim that outsourcing is bad to the US. The following reason can show how the outsourcing positively affect to the US. Superficially, the GDP of USA increases every year from 2006 to 2015 except 2009 when the economic recession takes effect on the US economy. The US is structuring its economy and got positive benefit that reflects on its GDP. Moreover, the booming global economy changes the global value chain. It enables the emerging and
A major type of unemployment that is hurt most by outsourcing is factory labor and manufacturing. The reason why factory labor and manufacturing jobs are outsourced is because labor laws in the United States are tougher than the countries where the jobs currently are. Where the jobs are now labor is cheap and just as good as labor in the United States. One example of outsourcing is when a company has a factory in the U.S. that pays it’s workers $23.32 an hour plus benefits closes that factory and moves to China where the pay is $1.36 an hour without benefits.
Since 2000, Brazil has significantly improved its economic performance. Strong global demand and high prices for its commodity exports resulting
Furthermore, some countries may have unequal gains, but that is part of business. Global companies may have a larger market because of globalization, but they will also have more competition. Not every country or company does everything well. What many German and US companies are doing to be more competitive is customizing their products to appeal to customers from different cultures.
Although it may have positive effects on American firms, outsourcing does not benefit the workers who lose their jobs to outsourcing, but in fact, it hinders their ability to support themselves or their families and lead middle-class lives.
Consumers want the best quality at the lowest price and the investors want to see a high profit, so to do that companies have to find the middle ground. Which means they have to find the best solution for everyone even if it means outsourcing jobs offshore because it more cost effective for the company. According to Jagdish N. Bhagwati, “employing workers at lower cost allows U.S. companies to be more efficient and productive, permitting them to create the same amount of goods with fewer resources. In turn, this lowers the price of the goods in the United States, strengthening U.S. companies and freeing workers for other tasks. The savings allows U.S. companies to stay afloat and expand in a highly competitive global market” (Otterman, 2004). Outsourcing is not always a bad, it is a change, and change is what pushes both our economy and our nation forward.
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.
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An ongoing shift in global economic activity from developed to developing economies, accompanied by growth in the number of consumers in emerging markets, are the global developments that executives around the world view as the most important for business and the most positive for their own companies' profits over the next five years (Borg, 2015).
With today’s technology the global community has become closer than ever providing business opportunities in various countries. Entrepreneurs have been relocating to budding countries such as China, Brazil, the Caribbean, and
* Outsourcing the labor in different stages (manufacturing, operational, etc.) allows for the company to save costs which can increase the profit margin and improve the financial situation.
It is additionally genuine that it has its drawback. The principle drawback is the way that when an organization outsources a support of another nation American laborers do get laid off. Notwithstanding, this is just a fleeting impact, and it is nothing to stress over it. Most won't be influenced. The long haul impacts of seaward outsourcing are that it advances business development, it empowers business rivalry and it is a calculate the improvement of new employments. All of which exceed the drawback. It is critical to see that seaward outsourcing is not something to fear. It is really a decent business strategy and it has numerous beneficial outcomes on the
It is difficult to determine whether offshore outsourcing has a positive or negative effect on the U.S. economy. It may actually depend on which perspective you take on it. As stated by Hira and Hira (2005), outsourcing in the services sector is a major shift in how the economy operates and will have serious impacts, both positive and negative, on the trajectory of economic growth, distribution of income and the workforce. However, there are many factors to take into account when considering globalization. Companies must familiarize themselves with the various rules and regulations of global business, tariffs, trade agreements and barriers, and decide how to go global; global consistency or local adaptation. All of these issues affect
In analyzing the second reason listed for why outsourcing is used; ‘inability to attract the highest caliber of employees to job functions that may be peripheral to the organization’s core discipline’, companies employ a different kind of outsourcing tactic. This reason leads to offshore outsourcing solutions. If a company cannot attract high caliber domestic employees to job functions secondary to their main function then they seek help where labor may be less expensive and more efficient.