In this day and age of globalization, domestic markets all over the world have become connected and somewhat interdependent. With the rise of global trade and commerce, the domestic companies have gained the ability to compete in the international markets and make a global impact and create a global brand.
The increasing accessibility to international markets and the gradual steps towards a truly free market all contribute greatly to the ever-increasing economic prosperity of the world. With the advent of globalization, companies have started to push into international markets and enter domestic markets all over the world to compete and provide stimulation to local markets and economy.
The impact of multinational companies is massive and their turnovers which are larger than the GDP of entire nations is a prime example of how going global can benefit business greatly. The reduced costs, increasing number of accessible markets and huge profit margins are all enticing enough for companies to compete globally.
Global Markets
For a company to be globally competitive the basic requirement is for that company to be present in global markets. Without ensuring that the company can leave the bounds of its host nation, no company can survive in the global market. Going global is not just an ambition but a venture that requires considerable investment and research from the companies to accomplish.
Truly global companies separate their work process into layers and distribute them around the world in search of cheap production costs and cheap staff to support the company. Opening a factory in a country with liberal wage and labor laws and low taxes is beneficial for the company as it can drive the profit margins up or let the company lower its product and service prices to offer competitive prices in the market.
Global markets help the companies to significantly lower their expenses by outsourcing complete divisional works like customer support or accounting services and by getting required raw materials etc. at much lower costs and labour at low wages as poorer countries have lower wage demands and when converted into the currency of the native country the cost comes out negligible because of the exchange rates. Global markets are a great way to outsource and gather materials and services at cheap rates and look for venues which offer the highest returns in markets where the company is almost guaranteed a lion’s share of the market and in turn profits at the lowest possible costs.
Competitive Globally
When a company starts competing globally, in essence, it starts to enter into the markets of countries outside its native country and competes with the local industries, companies and their products. A multinational company actively competes with similar or high-quality products either at lower or similar prices aimed at starting a price war or providing the best quality at the lowest possible prices to woo the customers.
Conversely, a foreign company coming into a country to compete in the domestic market will make the domestic companies undergo rapid changes to meet the new challenges to ensure their relevance and presence in the local market. This competition makes the local companies to go through a qualitative change as they are slowly tempered to take on the global powerhouses and compete with them in their own turf or in a possible new market.
This competition is what drives technological advancement and innovation to become the next leader in innovation and technology. This global competition is what drives the economies worldwide and opens the door for the advancement of science and technology. To become competitive globally, companies must ensure that their products and services are that of the international standards and must comply with all regulations placed in by various governments on their domestic markets with regards to foreign investments and companies entering the market.
An innovation or technical advancement or business idea can truly propel a company to the heights of a global brand that has its presence in a number of countries can single-handedly influence policy decisions in these countries. It is this aspect of technology that has led to the creation of a somewhat level field wherein as long as you have an idea and a business model, you can easily compete with the local bigwigs before gradually moving on to the international stage. In many cases, some of these companies came into being as a response to a foreign player entering the local market or a foreign player inspiring the local entrepreneurs to create a similar business model in their home country which until now lacked something like it.
Becoming Competitive
A globally competitive company competes with the other multinational giants in the international market, looking for new markets and ventures to create a new market segment altogether or to revolutionize the market sector itself with a groundbreaking technology which then opens up a host of other limitless possibilities for the market and the company involved to grow itself into. One of the important aspects of being a global force is to have a highly trained work staff that is capable of producing top-tier products and ideas that can change the very business model of the company.
The answer to what makes a globally competitive company lies in the fact that the ultimate vision of a company is to become a market leader in its field and to achieve such feat it has to continuously evolve and create new and innovative products and services. Only after the company has ensured a stable base at its home can it look forward towards the international market.
Entering the international market is a gamble and a company must be prepared both financially and with a product or service that can compete on the global scale or carve out space for itself. Companies need innovation, creative employees, a business model that works brilliantly with what the company does and the belief and confidence to enter a foreign market. Market research, research, and development of the products needed in a market and how to ensure low costs to competitively price products are all necessary elements to ensure that the company can survive and profit in a global setting.
