Why does a company go global?

There are a number of objectives of international business but the primary and the basic of them being;

1. Learning and Product Development:

Today every organization is a learning organization. Also it has to continuously be in touch with the competition in the market. Hence it has to do the up gradation of the existing products eventually whenever required.

When one enters international markets, one comes across other competitors from other countries. One is therefore exposed to competition from other countries. Domestic goods have to match international standards to remain in competition, not only with respect to product, cost and quality but services as well. Therefore, one gets an opportunity to learn and develop or improvise new products.

2. Brand building for other products

In international markets, if the company is competent enough to beat the rivals in the field, it not only creates a goodwill and image of the product it is promoting but it also opens avenue for promotion of other line of products manufactured by the company. It not only helps in brand building of the company but also assists in promotion of its product mix.

3. Capacity utilization and providing cushion for domestic recessions/ slow downs

International markets also help in full capacity utilization. it therefore helps  in meeting domestic recession and slow down , thus avoiding retrenchment of staff and reduction in their salaries and wages.

4. Foreign exchange earnings

Products launched in international markets also assist in earning precious foreign exchange for the country, thus the company can import advanced accessories or gadgets and technology.

5. Quality improvement and cost reduction

The precious foreign exchange earned can be thus be utilized for quality improvement of the existing products to stay in international business and subsequently import know-how technology to develop new products.

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