GLOBAL ENVIRONMENT Globalization is an attitude of mind which views the entire world as a single market so that the corporate

e strategy is based on the dynamics of the global business environment. Globalization encompasses the following: 1. Expanding business globally 2. Giving up distinction between domestic and foreign market and developing global outlook of business. 3. To maximize profit 4. For growth

Essential conditions for globalization 1. Business freedom: There should not be necessary govt. restriction like import restriction, foreign investments etc. 2. Facilities: Enterprise can develop globally from home country bare depends on facilities available like the infrastructural facilities. 3. Govt. support: Govt support can encourage globalization, like infrastructural facilities, R & D support, financial market reforms. 4. Resources: It decides the ability of firm to globalize. Resourceful companies may find it easier to thrust ahead in global market. Resources include finance, R&D, company and grand image, HR etc. 5. Competitiveness: A firm may drive a competitive advantage from any one or more of the factors such as low costs and price, product quality, product differentiation, technology superiority, marketing strength etc.

How to go global? Important foreign market entry strategies 1. Exposting: Exporting the most traditional mode of entering global market.

2. Licensing & franchising: It involves minimal commitment of resources and effort on the part of international marketer, are easy way of entering foreign markets. Finalizing is a form of licensing in which a parent company grants another independent entity the right to do business. 3. Contract manufacturing; a company doing international marketing contracts with firms in the foreign countries to manufacture the products while retaining the responsibility of marketing the product. 4. Management contracting: In this supplier brings together a package of skills that will provide an integrated service to clients without risk on owner. 5. Turnkey contracts A turnkey contracts is an agreement by seller to supply a buyer with a facility fully equipped and ready to be operated. 6. Wholly owned manufacturing facilities: It provides the firm with complete control over production and quality. It does not have risk in the development. 7. Assembly operations: Assembly facilities in foreign markets is very ideal when there are economies of scale in the manufacture. A when assembly operations are labour intensive and labour is cheap in foreign country. 8. Joint ventures: Joint venture is a very common strategy of entering foreign market. Any form of association which implies collaboration for more than a transitory period is a joint venture. A joint venture may brought about by a foreign investor buying an interest in a local company. 9. Third country location: Third country location is also an entry strategy, when there is no commercial transaction between two nations for some reasons, a firm in on of there nations which wants to enter the other market will have to operate third country base. 10. Mergers and acquisitions: It have very good market entry strategy as well as expansion strategy. It provides instant access to markets and distribution network. 11. Strategic alliances: It is also used as market entry strategy it is also known as coalition, this strategy seeks to enhance the long term competitive advantage of the firm by farming alliance with competitors.

12. Counter trade: It is a form of international trade in which certain export and import transaction are directly linked with each other.

Types of Mergers 1. Horizontal Merger: Takes place where the two margin companies products similar product in the some industry. E.g. in 1998 combination of Chrysler cooperation and similar sense to create Dainles Chrysler. 2. Vertical Merger: Occur when two firms each working at different stages in the production of the same good combine. E.g. General Motors acquisition of fisher body company (an auto parts manufacturer).