The Global Market and Its Advantages and Disadvantages
Global Market can be defined as “marketing on a worldwide scale reconciling or taking global operational differences, similarities and opportunities into account in order to reach global objectives.” It’s a concept that companies should embrace as they look to expand their presence beyond their local borders. The global marketplace is full of potential and offers many benefits, including a broader pool of customers. However, it is not without its challenges.
One of the biggest reasons that enterprises consider entering a global marketplace is to achieve higher levels of profitability. This is primarily because a company can sell products and services to a larger audience at a lower cost. Another reason is to gain access to cheaper raw materials and labor. This allows a business to produce products and services that are more competitive, especially in the face of an economic downturn.
Regardless of the reasons, expanding into a global market requires a thorough research process. This includes not only the product itself, but also the cultural and political environment of the market. This is important because, as the example of Wal-Mart’s failed expansion into Germany shows, cultural factors can have a significant impact on the profitability of a product.
The global marketplace is a diverse place with local, ethnic and cultural differences. The success of a global company depends on being aware of these nuances and adjusting its product to meet the needs of the local market. For example, Coca-Cola tastes the same no matter what country it is sold in, but they make changes to the packaging and marketing to match local expectations.
A company that enters a global market should also be prepared for the fact that different compliance, business and cultural environments may impact the overall costs of doing business in a new country. This includes the price of labor, raw materials and other assets. In addition, the company should be ready for a number of other issues related to doing business abroad, such as taxation and regulatory requirements.
Ultimately, the global market can help to mitigate the effects of a negative business event in any particular country or region by providing a hedge against financial instability. This is largely because it reduces a company’s dependence on any one particular market and allows them to continue operations in other markets if their domestic counterpart experiences a downturn. In addition, it gives a company the opportunity to take advantage of other regional economies and benefit from more favorable economic conditions. This is known as geographic arbitrage.
Global Market can be defined as “marketing on a worldwide scale reconciling or taking global operational differences, similarities and opportunities into account in order to reach global objectives.” It’s a concept that companies should embrace as they look to expand their presence beyond their local borders. The global marketplace is full of potential and offers many benefits, including a broader pool of customers. However, it is not without its challenges. One of the biggest reasons that enterprises consider entering a global marketplace is to achieve higher levels of profitability. This is primarily because a company can sell products and services to a larger audience at a lower cost. Another reason is to gain access to cheaper raw materials and labor. This allows a business to produce products and services that are more competitive, especially in the face of an economic downturn. Regardless of the reasons, expanding into a global market requires a thorough research process. This includes not only the product itself, but also the cultural and political environment of the market. This is important because, as the example of Wal-Mart’s failed expansion into Germany shows, cultural factors can have a significant impact on the profitability of a product. The global marketplace is a diverse place with local, ethnic and cultural differences. The success of a global company depends on being aware of these nuances and adjusting its product to meet the needs of the local market. For example, Coca-Cola tastes the same no matter what country it is sold in, but they make changes to the packaging and marketing to match local expectations. A company that enters a global market should also be prepared for the fact that different compliance, business and cultural environments may impact the overall costs of doing business in a new country. This includes the price of labor, raw materials and other assets. In addition, the company should be ready for a number of other issues related to doing business abroad, such as taxation and regulatory requirements. Ultimately, the global market can help to mitigate the effects of a negative business event in any particular country or region by providing a hedge against financial instability. This is largely because it reduces a company’s dependence on any one particular market and allows them to continue operations in other markets if their domestic counterpart experiences a downturn. In addition, it gives a company the opportunity to take advantage of other regional economies and benefit from more favorable economic conditions. This is known as geographic arbitrage.