Discussion 2

Discussion 2

Prior to taking this class, I would probably have said a similar statement. It can be common for a common person to think of large corporations such as Walmart, Coca-Cola, or Samsung when the term international business is used. However, globalization is becoming more of the normal course of business as we progress through time and technology improves.

A portion of doing business internationally is exporting goods. In the United States, it is not the large companies that do most of the exporting. In fact, about 90 percent of the firms that export goods are small businesses that employ less than 100 people (Hill, 2013). Firms with less than 20 employees represent the fastest growing segment of U.S. exporting companies (Hannaher, 2010). It turns out exporting is a good fit for companies of all sizes. It makes sense, once one begins to explore the benefits of selling goods to international customers. An initial analysis can put in plain view that a company’s number of potential customers will increase dramatically once the decision is made to export. A company can go from the population of the US, to a global population. Another factor is companies can gain a market advantage by selling in a country with less competition than in the United States (Hannaher, 2010). This is especially true in developing countries or countries that are transitioning from a government controlled economy to a market driven economy (Hill, 2013). In those countries, individuals are newly able to make choices about the products they consume. Since competition had been closely regulated, there are fewer existing businesses in place. Companies that are among the first to arrive in a new market segment can enjoy a first mover advantage (Brickley, Smith, & Zimmerman, 2009). Companies can benefit by being the first to build infrastructure and be the first company that people think about when they think about their product.

Another factor that international business is for just about every business is the evolution of the internet. The internet has made international commerce extremely easy and inexpensive (Hill, 2013). Companies can build a website, and be open for business in any country in the world. It is also much more convenient to ship and transport products. In the early 1900s products were transported using trains and ships. It could take several days or weeks to ship a product from Dallas, Texas to Paris, France. Now, packages can travel to just about any destination due to air travel and overnight delivery service.

This point came to mind as I was attending a graduation party this past weekend at an old train station. Inside the train station had a map of the state of Michigan in 1910. What was striking, was the map did not have any highways! The map illustrated many train routes across the state. It was still amazing to think about that 100 years ago the only way people moved around was by train. Therefore, trips had to be well thought out. You lived and worked in your hometown, and that was about it. There was no getting in the car and travel 3 hours to a summer cottage every weekend, and there was not even travel 10 miles away because we happen to like that Costco instead of the local grocery! The same concept is true in international commerce. What was once out of reach, is now much closer, and with improving technology will surely increase international trade

You may also like...