Competitiveness

There would be many reasons for MNCs to expand into foreign markets as a way of growth. There is a close link between competitiveness and intentions of these firms to globalize their operations. The basic contributions of global business operations to a firm’s competitiveness are; cost reduction, spread of risk across wider environments, capitalization of core competencies, gaining access to new customers, and valuable natural resources.

In the globalizing world, the business endeavor necessitates to consider many diverse factors. For example, cultures and life styles differ remarkably among countries. Other factors could be listed as follows:

• There are differences in market demographics and income levels.
• There are variations in research, manufacturing and distributing costs.
• Exchange rates are fluctuating.
• There are differences in host government, economic and political demands.