Essay About Globalization Strategies And Local Conditions

International Business
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The American College
Chapter 5
Question No 1:
Describe the four basic levels of international business activity.Do you think any organization will achieve the fourth level?Why or why not.
Question No 2:
Answer for question No 1:
The four general levels of international business
activity are:
Domestic business
International business
Multinational business
Global business.
Domestic Business: Is the one that acquires all of its resources and sells all of
its products ot services within a single country.(8/143)
Interational business: Is the one that is based primarily in a single country
but acquires some meaningful share of its resources or revenues (ot both)
from othe countries. (8/143)
Multinational business: The one that has a worldwide marketplace from
which it buys raw mateials, borrows money, and manufactures its products
and to which it subsequently sells its prducts.(8/143)
Global business: Is the business that transcends national boundaries and is not
committed to a single home country.(8/143)
In my opinion there is no opportunity for a business to achieve this
level of Iinternationalization.The reason is that all business in all over the world are
controled by the government which are committed.There is no way for a business
which is spread-out in all over the world with high revenues and big profits not to
be controlled by noone.
Answer for question No 2:
The four globalization strategies are the followng:
Importing and exporting
Licensing
Strategic alliances
Direct investments
In all of those strategies there are many risks and of course many efforts.In
Importing/exporting,the main risk is that, the products are not adapted to
local conditions, and they may miss the needs of a large segment of the market..On
the other hand the effort of imports/exports is that you can get in the market of your
country with a small outlay of capital.
In licensing the main risk is that the licensing firm can lose profits if the
licensee does not develop the market effectively.This could happen only if the firm tie
up control of its product or expertise for a long time period.In addition the advantages
of licensing are increased profitability and extended profitability.
In strategic alliances the main advantage is that the two or more firms that are
cooperating may allow a quick entry into the market by taking advantage of the
existing strengths of participants.In addition strategic alliances are also an effective
way to gain access to technology or row material, and they allow the firms to share
the risk of cost of the new venture.
Finally many firms make direct investment in order to capitalize on lower
labor costs.On the other hand in direct investment there is a great economic and
political risk, which may cost lots of troubles in the profit and of course in the firm.(8/145-148)
Type-Terms Chapter 5 :
Domestic Business: Is the one that acquires all of its resources and sells all of
its products ot services within a single country.
Interational business: Is the one that is based primarily in a single country
but acquires some meaningful share of its resources or revenues (ot both)
from othe countries.
Multinational business: The one that has a worldwide marketplace from
which it buys raw mateials, borrows money, and manufactures its products