Peng (2008) defines global business as business around the world. A proper understanding of the Global business of the world today requires accurate up-to-date information, intellectual analysis and interpretation. In a globe that is constantly undergoing rapid changes, it is only essential to accurately describe, explain and, if possible, predict the key events and issues unfolding in the current international affairs. These intellectual tasks must be performed well so that world citizens and policy makers can harness this knowledge and accurately position their decisions on the most pragmatic approaches to the global problems available.
While making critical decisions, international firms such as Boeing usually apply a number of criteria. The issue here according to Hill (2010) regards whether Boeing is performing an activity more cost-effectively than its rival or is unable to meet the interest and needs of its clients as dictated by the market trends. For newly established and well established businesses venturing in global business, the basic objective is not to depend on single outside supplies for critical components.
Just like any other business, the laid down rules and regulations that dictate the business start up remain the same universally where proper documentation of all the business papers are required and most importantly a guarantee of the safety of the clients being targeted.
The global business today is closely related to world politics, which plays an important yet major issue affecting its trend and transformation. Politics dictates new sections in trade and discussion based on trade policies, economic sanctions etc. According to Kegley and Shannon (2010), trend and transformation of the environment in which the global business operates aims to put both changes and continuities into perspective by providing a picture of the evolving relations among all international relations. Furthermore, a critical analysis of trends and transformation prevalent in the globe provides tools necessary for understanding world affairs in our present period of history, for anticipating probable developments and subsequent critical thinking about potential long-term impact of those developments on countries and individuals across the globe.
With regard to economics, entrepreneurs put into practise how scarce resources can be best effected so as to produce and distribute goods and services that not only meet the customer’s level of satisfaction but also meet the given ends. The given ends in this case may be measured through goals and objectives of the business. This involves the problem of choice where entrepreneurs and businessmen alike seek for measures on how best they can choose to produce, distribute and utilize commodities and services to meet certain objectives. One of the major economic tools being employed in the global business environment involves demand and supply.
Both newly and well established business involved in global trade in the global market aim at promoting good business relationship between the business firm and their clients. A good business relationship established between the two will subsequently result in realization of the intended goals and objectives of the firm. Demand is the quantity of a commodity that buyers are willing to and are able to buy at given price over a definite period of time. With high costs, the quantity of goods and services being sold worldwide will result in a decrease. Conversely, should the costs or price of goods and services being sold decrease and becomes affordable to many, the quantity demanded increase. On the other hand, supply is concerned with a schedule of various amounts of goods and services that producers are willing and able to sell at each specific price in a set of possible prices during a specified time period.
One of the challenging issues affecting the supply of goods and services in the global market is the amount of disposable income the government is willing to cash in. Furthermore, additional product features that can influence situation of a firm’s decision is concerned with whether the product being sold meets the universal needs and interest of the targeted clients. The universal needs, customer taste, interest, preference and choice are the same all over the world. Owing to the fact that national differences in consumer tastes and preference for universal products, such as cell phones and computers are the same the needs for local responsiveness is reduced. One trend observed and is still being employed is the business environment is the establishment of firms where huge markets exist. This strategy is aimed at reducing the cost of delivery and shortens the delivery time Kegley and Shannon (2010).
Culture calls for an adaptation of the products. Culture influences the purchasing decisions made on the basis of style, aesthetics as well as cosmetics. Cosmetics that sell well to another culture say, for example, the United States of America may not necessarily be acceptable in the Islamic nation of United Arab Emirates. This may be due to the opposing views dictated by the two cultures with regard to what is right from wrong. The same will also apply to colognes and perfumes that have a strong appeal in the European countries such as France but fail to attract customers in the United States of America. As regards the issue of culture and rules that define as well as dictate how we behave, language and colour are also vital yet critical issues that need be considered when either marketing or advertising new goods. In many cultures of the world, the colour black is associated with evil or as a dull colour, Kegley and Shannon (2010).
Products that therefore come wrapped up in these colours will obviously not be bought. Language coveys the right image for the product. When it comes to product modification, language plays an important role. In the line of production, there are certain products that often require instructions when being used should specific events occur such as a fire extinguisher, Kegley and Shannon (2010).
If a product is written in a language that is not easily understood by people, the words may have within it complex vocabulary, buying the product becomes questionable. On the other hand, a product produced or manufactured in Spain for the intended purpose of export should not have every little detail written in Spanish only but should also include English translation or an internationally recognised language. Another issue regarding language is concerned with changing the product slogan so as to blend in with the environment. Translating the slogans make the slogans have no meaning in the other language. The slogans therefore should be provided in appropriate languages to suit all cultures.
The government of the land may prohibit the import of a product or its local manufacturing. Conversely, the product may be required to be locally manufactured and not imported. In addition, the product modification becomes difficult if taxes being taking into effect by a country are high. An increase in tax on the subsidy materials used in the manufacture of goods and services or as a result of government legislations will subsequently result in an increase in the prices of goods and services. In business the law of demand states that an increase in price will obviously lead to a decrease in demand whereas a decrease in price of the goods and services being sold will subsequently result in an increase in price owing to the fact that the goods and services being sold are affordable.
As a measure of counteracting social and environmental challenges facing globalization, most countries partner up under certain umbrella bodies, with regard to geographical location, so as to address economic as well as environmental business challenges. The amount of disposable income brings about variations in the ability to buy. The disposable income levels differ from country to country thus affecting demand for inexpensive goods and services. Poor families, for example, find it difficult to buy goods and services despite discounts on goods. Such goods and services impose a substantial financial burden through the earnings foregone and out of pocket expenses for clothes, transport, fare, books, materials etc. therefore, so long as the level of individual disposable income continue to vary and continue to be low, demand for such products will invariably be low and vice versa.
The government regulation also can prohibit the importation of certain goods and services into a country. An example of this context is Islam. The Islamic community prohibits the use of alcohol by its members it is for this reason that no alcoholic drink being manufactured can get into the Islamic country. A first point to underline is that any policy instrument used to achieve global targets should cause changes in consumption and production patterns. If an instrument fails to create such changes, it simply cannot deliver any global improvements.
According to Hill (2010), in order for globalised firms to compete favourably in the international market, firms that form the global structure need to carefully plan their marketing strategy, prepare and implement it as soon as it is reasonably practical. This will ensure that the participating firms companies own certain projects and eventually drive its objectives forward. An effective marketing strategy will not only help the globalised industry in identifying their best customers but what their clients are looking for other than that, what will make their clients buy from them rather than their competitors?
The market share is important because it gives details about new trends, segmentation, distribution, and dictates control of the market. The better the service marketing strategy the more the orders. There is an expanded discussion of the globalization of production and enhanced emphasis on the contest between liberal and mercantilist economic philosophies. In the global market, standardisation helps save on costs as firms can easily reap benefits of economies of scale, which are bound to accrue owing to huge volumes.
With regard to competition, Peng (2008) is of the opinion that, it is only through competition that the customers will get what suits their interests and needs. In the service business, an international firm potential will depend on the areas the firm serves. Through promotions of technology and creativity, entrepreneurs in the global business produce quality goods and services in large quantities designed to meet their client’s level of satisfaction and taste. Manufacturing powerhouses that share similar vision statement in their line of work can also sit down and understand each other in terms of partnership.
Examples of such powerhouses that share similar vision statements include clothing industries. The partnership can also be viewed from a different angle where the final product of firm A becomes the raw material for firm B. To ensure that these processes are conducted in an efficient way, such kind of firms need to be adjacent to each other or rather have a smooth and efficient transport and communication system for faster delivery and better feedback.
Of the major contribution the global business brings along with it is development. Development can be defined as a continuous process of positive change, collectively defined and aimed at optimum distributive justice, economic growth and individual and collective self -reliance in politics, economics and cultures through the participating of that community and related communities. Development in this case may be viewed in terms of creation of employment opportunities of staff that make up the professional circles and the unskilled staff, construction of infrastructures such as roads and other social amenities, Peng (2008). Global business also establishes and promotes peace among member nations with whom trade is being conducted subsequently leading to exchange of ideas between neighbouring countries.
According to Kegley and Shannon (2010), the most successful global business transactions are always based on the well-developed personal relationships. The international business relationship where one has to meet with his strategic partners, clients, customers and even members of your own offshore team across geographical and cultural divides. In as much as all business getting personal, it does not go without mentioning that the quality of staff also matters when it comes to achieving the desirable outcome of results for any global business firm. The workforce in question therefore should be able to bring out their full productivity and competence at all levels of work assignments allocated to them. Since the workforce is in a competitive business field it is only right that the workforce is taken through a thorough training of good customer relationship.
Opportunities are in plenty in international business that entrepreneurs must be willing and able to seek should an opportunity arise. International firms also engage in seeking the type of teamwork that is capable of realising the vision statement of the global firm into reality. This is always forged through well-established business relationships.
We ca bring to a close that, the global business equips as well as provides the learner with a wider market share made up of global structures in the global environment. Global business intends to set up new standards for global business through an evidence-based approach. Thus ensuring that there is continuity in the learning process. Understanding how global business decisions are made may facilitate overcoming of future challenges in the business environment. Refusing to participate in global trade and investment will only end up breeding uncompetitive industries.
Hill W. L. C., (2010). Global Business Today. McGraw-Hill Companies.
Kegley, C. W. and Shannon L. B. (2010). Doing business anywhere: the essential guide to going global. Cambridge University Press
Peng, W. M., (2008). Global Business Today. Cengage Learning.