What is Global Business?
Global business consists of the flow of goods and services across national borders. The business of importing and exporting, trade, and foreign direct investment are carried out in various transactions, including wholly owned subsidiaries, joint ventures, licensing, franchising and contracts.
There are many environmental factors that should be considered when doing business around the world like different laws, cultures, and societies which can cause costly conflicts.
The basic principles of domestic business still apply, but their application, complexity, and intensity vary substantially. To operate outside national borders, firms must be ready to incorporate international considerations into their thinking and planning, making decisions related to questions such as these:
- Is there a global demand for your product or service and how will it fit into the international marketplace?
- What is the best way to enter the market – through trade or through investment?
- What kind of supply chain should you consider – should you get supplies domestically or from abroad?
- How will I need to adjust my product or service to respond to consider international conditions?
- What threats from global competition should be expected and how can these threats be counteracted or mitigated?
- Does your organization have the human resources and cash flow to make an international business work long term?
When making the decision to take your business global, you should consider the above items into all critical decisions. International markets can provide growth, profit, and satisfy demand that is currently not available in the domestic marketplace.
These international transactions have created an integrated and more interconnected global economy which I consider the birth of globalization.
Does globalization and global business scare you?
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