QUESTION 4
When a firm is looking for new and better ways of competing, it will begin to look outside its own domestic country. Or in some instances they will start getting business and exporting their goods/services to an outside country more frequently or in other cases a firm is performing poorly in their on domestic market. This gives birth to internalization of a company. When a company decides to go international it means they are now operating outside their own country. Companies then come up with strategies and ways of how to expand their business internationally. The firm must look at the key success factors that will give them the competitive edge. Their plans must include the cost structure, the risks they will face and how to …show more content…
For example in china, there is cheap labour hence why many clothing company have their products made in china and imported back to their countries.
• Companies can also gain access on critical resources
• Companies also benefit from lowering the risks of operating in one country. For an example if there is a natural disaster such as an earthquake or tsunami, your business can disappear just like that, but when you have another business outside your home country that can still generate money. Here is a broader supply base.
• A company might have lots of competitors in their home country buy find that in another it is dominating. This can bring up sales and allows your company to flourish. Fewer competitors makes it easier to trade.
• Customers can also enjoy a variety of products, employment will be increased .International trade creates more jobs because now newer industries are formed. Two countries will build a relationship. When countries have economic dependency amongst each other, they often have a close cultural relationship and can avoid wars between …show more content…
Total cost of ownership analysis is a method understanding all supply chain –related costs of conducting business with a certain supplier for a certain good/service. Total cost of ownership is the price paid of an item plus the running/operating costs. Purchasing Price is a short term cost whilst long term price is the total cost of ownership. In the long run the item with the lower total cost of ownership is the better value. Total cost of ownership uncovers all the hidden costs across asset life