ASSIGNMENT
ON
“Why does Business go Global?”

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Submitted By: Mohammad Ilyas

Submitted To: Mr. Zeb

Department of Management Sciences

FAST-National University of Computer and Emerging Sciences, Peshawar

Why does Business go Global?

Going global for a business has 3 very different meanings. One meaning is to begin selling products and services to other parts of the world. A second meaning is to begin outsourcing labor to another part of the world. And, the third meaning is to begin buying materials from another part of the world.

In our previous class of Global Corporate Strategy we discussed that why business goes global? There are certain advantages and disadvantages for a business to go global that are listed below:

• Cheap Resources or Labor: Most of the companies goes global because or cheap labor is available in another country to gain comparative advantage. In search of low cost labor the multinational companies they look into the cost of the labor and labor productivity. Companies wants to gain competitive advantage in the market and how these companies can gain competitive advantage it depends on three things, Better, Cheaper and Faster production then the companies can gain competitive advantage. E.g of Nike who is an American company but they are manufacturing their sports shoes in different countries of the world, in some countries they are making the soal for shoes some are designing the leather for shoes etc.

• Saturation of the Domestic Market: Company can go global when there is no more growth opportunity in the market where the company is currently operating. Companies goes global because they want some share of the market and in their local or domestic market it is hard to get some share in the market because of tough competition