across cultures communicating business globally
Uploaded by dlatrell on Apr 23, 2004
Global business benefits may include allowing firms to increase their profitability in ways not available to purely domestic enterprises. Firms operating internationally are able realize location economies. Location economies are value creation activity in the optimal location, using lower-cost locations reduces overall costs and product differentiation for super pricing and creating a Global web for value creation.
I use to ask myself why the Le Mans car continues to be sold even though it was considered in the U.S. as a low rating vehicle. That question was answered as I read more into global and international business. Because of location economies and cost the car was a great production for GM. In Germany the car was made cheap but the gain for GM was great. If we look at Hyundai cars we use to say it was a piece of junk but the company use of location economies created a continuous gain. In Korea the Hyundai factory made outstanding cars but for the U.S. they were made with just enough quality to create a gain and start a name. Longtime goal had to be the focus of Hyundai for the U.S. market in which they have succeeded.
Global business also benefits the use of cheap labor. We all wonder why a business move to overseas and the answer is “cheap labor” which is part of product and skills localization.
Because of low employment rates and lack of trades a country like Mexico have skilled workers that will work twice as hard and half the pay of Americans. A globalize business will relocate or expand to reap the benefits to maximize productivity. Large businesses normally get a big tax break from the country it setup in. Can we call this type of business strategy a greedy business? No, it’s just business. Now that I have a clear understand of the Global and international business I would like to break it down in my terms. Global business refers to the exploit of other country resources to include labor rate, tax cuts and etc….. Where as international business is to expand your product to other countries that can use your product over their own.
Where there are advantages there are also...