Why Do Firms Go Global
Why Do Some Firms Become Global?
1. Introduction
More and more companies all over the world have joined the army of firms that are running globally. Reasons of companies becoming increasingly international can vary,while the ultimate goal of going global turns out to be growth and expansion of the company. No matter whether a firm employs staff from international labour market or looks for exploration of new markets overseas, corresponding strategies can contribute a great deal to diversification of the company and the expansion of the business.
In this report, basic knowledge of international companies will be reviewed at the beginning, based on which, then, different theories for reasons why firms try to become more and more international will be discussed, including SWOT analysis, 4P’s analysis and Porter’s Five Forces analysis. Advantages and disadvantages of a firm becoming global will be analysed as well.
2. Concepts of International Companies
International business companies are offshore firms that are founded under the supervision of the overseas law system. Basically, a global firm turns out to be an giant organisation which runs and operates businesses in more than one markets across the globe. Generally, the company can have its headquarter in only one central location with several sections of business in every nation where it goes its business (Shuler, 1993).
There are quite a few types of international firms. One of them, in general, is that the corporation runs businesses in several nations, each of which contributes to sales and products to the whole company. Manufacturing firms are typically of this type. Another one is that the company runs its administrative office in the headquarter nation, and provides the productions or services in overseas markets. These can be seen for many manufacturers which only make productions in nations with lower wage cost. A third one can be that the headquarter puts its supporting sections overseas, such as the
1. Introduction
More and more companies all over the world have joined the army of firms that are running globally. Reasons of companies becoming increasingly international can vary,while the ultimate goal of going global turns out to be growth and expansion of the company. No matter whether a firm employs staff from international labour market or looks for exploration of new markets overseas, corresponding strategies can contribute a great deal to diversification of the company and the expansion of the business.
In this report, basic knowledge of international companies will be reviewed at the beginning, based on which, then, different theories for reasons why firms try to become more and more international will be discussed, including SWOT analysis, 4P’s analysis and Porter’s Five Forces analysis. Advantages and disadvantages of a firm becoming global will be analysed as well.
2. Concepts of International Companies
International business companies are offshore firms that are founded under the supervision of the overseas law system. Basically, a global firm turns out to be an giant organisation which runs and operates businesses in more than one markets across the globe. Generally, the company can have its headquarter in only one central location with several sections of business in every nation where it goes its business (Shuler, 1993).
There are quite a few types of international firms. One of them, in general, is that the corporation runs businesses in several nations, each of which contributes to sales and products to the whole company. Manufacturing firms are typically of this type. Another one is that the company runs its administrative office in the headquarter nation, and provides the productions or services in overseas markets. These can be seen for many manufacturers which only make productions in nations with lower wage cost. A third one can be that the headquarter puts its supporting sections overseas, such as the
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