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Organization's Financing nad Foreign Markets

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What are some benefits of sourcing an organization's financing in a foreign market? Please provide at least 2 specific examples. How do multilateral and regional financial institutions promote global business? Provide specific instances of global business promotion.

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Please see response attached, as well as one supporting and relevant article. I hope this helps and take care.

Response:

Interesting questions, indeed. Let's take a closer look:

1. What are some benefits of sourcing an organization's financing in a foreign market? Please provide at least 2 specific examples.

Response:

Increased global competition is driving many firms, particularly those in durable and fashion industries, to identify and establish relationships with suppliers in low cost countries. There are a number of justifications for such sourcing initiatives. First, sourcing from countries with low wage rates typically reduces manufacturing cost. While such strategies can reduce manufacturing cost, some firms have not considered the total cost impact of international sourcing particularly with respect to the logistics cost components of transportation and inventory. Second, the material or factors of production (power, water, etc) may be less costly due to less developed markets. Third, seeking out suppliers in low cost countries can also increase competition among existing suppliers, thus reducing material cost. For example, US manufacturers, through outsourcing in a low cost country, might increase competition among existing suppliers, and thus reduce material cost. Fourth, low cost country sourcing can increase a company's exposure to state-of-the-art product and process technologies. Without pressure from global suppliers, for example, there may be reluctance on the part of local suppliers to ...

Solution Summary

Some of the benefits of sourcing an organization's financing in a foreign market are discussed, including examples. It also explains how multilateral and regional financial institutions promote global business. Supplemented with an article describing global institutions.

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