A global corporation, also known as a global company, is coined from the base term ‘global’, which means all around the world. It makes sense to assume that a global company is a company that does business all over the world. There aren’t many companies in the world that can boast of having a business presence in every major country. Actually, they probably can be numbered on the fingers of both hands. The global company definition, therefore, should be a little more lenient to accommodate this fact, which would enable more companies to call themselves global companies. Really, a global company is any company that operates in at least a country other than the country where it originated. Realistically, expanding to even just one additional country is a lot of work and is therefore a great achievement.
International business has become an important economic force during the second half of the 20th century. Today few countries, if any, can claim to be economically self-sufficient. India, even with her vast human and natural resources, cannot insulate herself from the world economy. Though there was tremendous political opposition from within, India was constrained to open up her economy and join the World Trade Organization (WTO). In every country, developing or developed, international business touches people’s lives.
Benefits:
You can reduce your operating costs
If the manufacturing or labor costs are lower in another country, expanding to that country enables you to save on your operating costs. This can improve your bottom line. In fact, reducing operating costs are a key reason why many global companies expand.
Increase customer base
When you expand your business into another country, your customer base expands along with it. The market in the United States could be full of products just like yours. You may find, however, that this is not the case in another country. That could present an expansion opportunity for your company. What’s familiar to your consumers in the U.S. could be fresh to consumers in another country.
You don’t need to be bogged down by seasonality
If you sell a seasonal product that experiences fluctuating sales at different times of the year, then you can expand to countries that have seasons opposite to those in your base country, enabling you to have high sales figures all year.
Create new jobs
Expanding into another country involves a lot, such as hiring representatives and employees of your company in the new country, as well as setting up offices and various facilities, and so on. You’re likely to employ locals and, in the process, you will create new job opportunities in the country where you are expanding. This helps boost the local economy and it also gives your company a good reputation.
Boost the growth rate of your company
If your company has been growing rapidly in your locale, chances are that this growth may eventually stall, because of market saturation. In that instance, you can expand to another country so you can maintain rapid growth.