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    Reasons For Globalization

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    Harsh Gupta
    Firms operate internationally for several reasons: to access new markets, raw materials, and labor; take advantage of subsidies; and achieve economies of scale as domestic markets become saturated. Key players in globalization include multinational firms conducting business across borders, as well as organizations like the WTO, World Bank, and IMF that facilitate international trade. Firms progress through stages of globalization from linking with overseas distributors to fully establishing their own manufacturing, marketing, sales, and R&D operations abroad.

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    Reasons For Globalization

    Uploaded by

    Harsh Gupta
    109 views7 pages
    Firms operate internationally for several reasons: to access new markets, raw materials, and labor; take advantage of subsidies; and achieve economies of scale as domestic markets become saturated. Key players in globalization include multinational firms conducting business across borders, as well as organizations like the WTO, World Bank, and IMF that facilitate international trade. Firms progress through stages of globalization from linking with overseas distributors to fully establishing their own manufacturing, marketing, sales, and R&D operations abroad.

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    Reasons for globalisation

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    Firms operate internationally for several reasons: to access new markets, raw materials, and labor; take advantage of subsidies; and achieve economies of scale as domestic markets become saturated. Key players in globalization include multinational firms conducting business across borders, as well as organizations like the WTO, World Bank, and IMF that facilitate international trade. Firms progress through stages of globalization from linking with overseas distributors to fully establishing their own manufacturing, marketing, sales, and R&D operations abroad.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    109 views7 pages

    Reasons For Globalization

    Uploaded by

    Harsh Gupta
    Firms operate internationally for several reasons: to access new markets, raw materials, and labor; take advantage of subsidies; and achieve economies of scale as domestic markets become saturated. Key players in globalization include multinational firms conducting business across borders, as well as organizations like the WTO, World Bank, and IMF that facilitate international trade. Firms progress through stages of globalization from linking with overseas distributors to fully establishing their own manufacturing, marketing, sales, and R&D operations abroad.

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    of 7

    Reasons For Globalization

    Firm operate internationally for a number of reasons:


    • They may be seeking to secure better sources of raw materials &
    energy.
    • They may want to obtain access to low cost factors of production such
    as labour.
    • They may be attracted to certain countries because of subsidies
    those countries provide.
    • They may be seeking new markets for their products.
    Contd…
    • Domestic markets may no longer be able to absorb production at
    minimum efficient scale.
    • They may be motivated by life style factors.Domestic markets become
    saturated .As they mature , firms look abroad for new opportunities.
    • They may be seeking opportunities for economies of scope & for
    learning.
    So why go ‘Global’?

    • Competition within your national market is becoming too intense so


    you decide to push sales in overseas markets.
    • Your products within your national markets are reaching the end of
    the lifecycle so you wish to push it into national markets.
    • Sales and profit are generally declining in national markets.
    • You wish to become a global player.
    KEY PLAYERS

    • Multinational firms which carry out business across the national


    borders.
    • The World Trade Organization (WTO) THROUGH WHICH
    INTERNATIONAL TRAD E AGREEMENTS ARE NEGOTIATED& ENFORCD
    • The World Bank & International Monetary Fund (IMF) are means to
    assist Govt .in achieving development aims through the provision of
    loans, technical assistance. 
    STAGES IN GLOBALISATION

    • Domestic company links with dealer & distributor.


    • Company does the activities on its own. Company begins to carryout
    its own manufacturing , marketing & sales in the foreign markets.
    • Company starts fullfledged operations including business systems and
    R&D. At this stage the managers are expected to perform the tasks
    which they were doing in domestic markets to replicate them in
    foreign markets.
    Conditions for globalization

    • Business Freedom-No unnecessary Government restrictions like


    restriction, restrictions on sourcing of funds and other factors from
    abroad. Hence the liberalization is the 1 st step towards facilitating
    globalization.
    • Facilitators-Infrastructure facilitation available at home country an
    help entrepreneurs go globally.
    • Government support –Government support available in the form of
    policy & procedure reform encourage globalization.
    Resources

    • Resources is an important factor which decides the ability of affirm to


    globalize. They include finance ,technology, brand image, company’s
    image, managerial expertise etc.
    • Competitors- This is an important factor which company’s success in
    global market bank on. The factors like low costs& price, product
    quality, product differentiation, technological superiority. After sales
    service, market strengths etc are few to name.

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