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The Phase model of globalisation describes the stages that a company might go through as it sets about selling its products to a world market. The phase model starts with exporting and develops through the stages of cooperative contracts and strategic alliances to wholly owned affiliates. The simplest stage of the model is exporting and it is the least costly way for a company to initially take its product to a world market.

The exporting stage of the phase model is when companies make something in their home country and sell it overseas. One of the advantages for exporting is that the company becomes less dependent on its home market for sales. By selling overseas the potential market is bigger. One disadvantage especially for a country like Australia is that shipping costs add to the price that a company has to change for its products overseas. Another potential disadvantage is that foreign governments might charge tariffs on imports which can also make them more expensive.

The cooperative contracts stage of the phase model is when a company makes a deal with a similar business in a foreign country that gives them the right to make their products. Two types of cooperative contracts are licensing and franchising. One advantage of this stage is that the company does not have to pay shipping or face tariff barriers.

Strategic alliances are formed when companies combine to share resources. The most common form of strategic alliance is the joint venture company. This is where two or more companies combine to form a new company. Joint venture companies have the advantage of avoiding the cost of shipping and tariff barriers by making their products in the country where they are sold. Joint ventures struggles with merging four cultures the home country and host country.
Wholly owned affiliates are the direct investment by a company in a host country. by

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