Major Forces That Are Leading International Firms Essay

There are five major forces that are leading international firms to the globalization of their operations which includes (1) political (2) technological (3) market (4) cost and (5) competition. Many firms initiate international operations to gain assess by combined markets through exporting product or producing within the area. Technological According to (Ball, 2011) today’s technology has allowed an advance in computers, communication and an increase flow of ideas. Through the internet and networks small companies can compete globally. Markets Companies use foreign countries to establish a business to avoid having their competition take their business. With the majority of the population being in foreign countries, outsourcing helps to generate growth. Cost Management utilizes lower cost by moving production lines to foreign countries because the labor is cheaper, and can also lower other parts of a company value chain. There is a reduction in the cost of generating and transmitting information as well as a decline in transportation cost. Competition Competition is increasing because of growth in automobiles, computers, and electronics. Firms are also defending their home markets from foreign competitors by entering into foreign markets. There are a number of reasons why a manager may not be able to successfully apply the specific techniques and concepts learned in his/ her country in other areas of the world. Each country has its own values, cultures and ethicalShow MoreRelatedArchetypes: Strategic Management and Firm Specific Advantages1632 Words   |  7 PagesCentralized exporter: Home country managed firm. Firm specific advantage in its final products. Standardized products manufactured at home. Only the transferable firm specific advantages are taken to the host country, meaning that they try to make exporting successful in international markets. 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