Global Sourcing :: essays research papers

Why would a fraternity go international? There argon many reasons why companies would go international, but generally a company goes international so they can seek opportunities in domestic markets, or they seek solutions to problems that cannot be solved through domestic operations. There are many profitable possibilities by going internationally and these include greater profit potential, offers new locations to sell reapings, it may provide better regain to needed raw materials, it may access to financial resources from many nations, and eventually it may allow comminute-intensive activities to locate in countries with lower labour cost. For a small business to become an international business they must(prenominal) use five guidelines the first is global sourcing, exporting and importing, licensing and franchising, joint ventures, and in all owned subsidiaries. The first two are market entry strategies and the stay are direct investment strategies. GLOBAL SOURCINGThe firs t step in doing international business, this involves manufacturing and/or purchasing of components in different regions of the creative activity and and then putting them together to make the final product. The benefit of producing a product in a different part of the world is it can be done at a lower cost. For example Indonesia boasts among the lowest costs in the world, a big domestic market, and proximity to the rest of Asia. As a result, some companies are not merely sticking nearly they are expanding. Coca-Cola plans to open a new bottling plant next year. all(a) told, over the past three years, the government has approved $26.2 billion in new contrary investment. Officials say foreign investors, apart from petroleum and financial-services companies, pursue 3.5 million Indonesians, or 3.5% of the workforce.EXPORTING AND IMPORTINGExporting is the commercial practise of selling and shipping a good or goods to a foreign country. Importing is the commercial activity of buyi ng and bringing in goods from a foreign country. The benefits of exporting and importing are good to a countries delivery as it creates local jobs. The Honda plant in Alliston exports the Honda Civic (a three portal hatchback and four-door sedan) as well it is the only facility in the world that builds the full-size Odyssey minivan and the Acura MDX sport utility vehicle.LICENSING AND FRANCHISINGLicensing occurs when a firm pays a give and enters into a licensing agreement giving it the rights to another companys product, resulting in the rights to make or sell that companys product.