This article will be useful to those who want to learn more about doing business and entering the international trading arena. In the modern world, globalization is one of the most important economic processes that allows establishing strong trade relations. Integrations to some extent occur on the territory of all countries, including the exchange of culture, knowledge and goods. The brand’s entry into a new market is a continuation of development after success in the local sector. However, with global expansion, there are various pitfalls, which will be discussed below.
First of all, we should start with the difference between domestic and international business environments. The main difference is that in the first case, the business does not go beyond a certain country and uses one currency. In addition, legally the seller and the buyer belong to the same country. This means that the business is subject to the laws of the state in which it is based. At the same time, international business conducts economic transactions across the actual borders with other countries (Rosenbusch, 2016). This leads to the use of different currencies and considering the laws of not only the original country, but the legal requirements of those states where the goods are exported. However, in the event of an interruption in supply, the price of goods can rise sharply (Thorbecke, 2019). Examples of each type of organization include Perdue Chicken and Google companies. In the first case, the business conducts its operations in the United States, supplying products to local consumers in US dollars. However, Google is an international company operating in most countries (Dunung, 2019). The company has many international offices and is subject to the laws in accordance with the territory of location.
This leads to the idea that every business that has become successful in the domestic business arena must develop into a larger enterprise. This provides many benefits that affect the company’s budget and its image. First of all, the demand for goods and services is increasing, thanks to customers from different countries. In addition, the business reduces the risks of bankruptcy and inability to maintain an effective competitive strategy. This reduces dependence on the local market and gives the organization more space for successful development. Google comes to mind again, which started out as a small business in the US. However, the company quickly rose to prominence and, after establishing itself in the country, expanded to other geographic areas. Entering the global market has allowed Google to build a successful reputation and bring the company to the top of the richest organizations around the world.
Nevertheless, in order to bring a business to market, it is important to take into account both economic and ethical considerations. An ethical approach to expansion ensures that the organization’s actions cannot be dangerous or harmful to the surrounding population. At the same time, the company undertakes to reckon with the culture and traditions of the country so as not to cause misunderstandings between local residents and office workers (Dunung, 2019). Moreover, consideration of ethical factors can help make decisions for the well-being of employees and the public. They consider the fairness and expediency of what has been done.
In conclusion, it should be said that globalization is important for business development. It allows businesses to expand their opportunities and limit the risks of bankruptcy in the local market. However, when expanding, the ethical norms of each territory should be taken into account in order to avoid detrimental consequences for the organization.
References
Rosenbusch, K. (2016). Becoming an effective global manager [Video]. SAGE Knowledge.
Dunung, S. P. (2019). Global Business Management . Boston, MA: FlatWorld
Thorbecke, K. (2019). Supply, demand and ‘geopolitical tensions’: How oil prices rise. ABC News. Web.