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    Impact of globalization on the firm's strategy

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    Need some info and help Trying to figure out how to go about these.

    1. In a committee meeting of the United Nations you are considering the following questions:

    A.When is international trade an opportunity for workers? When is it a threat to workers?
    B.What are some of the major challenges confronting the international trading system?

    2 . Select a U. S. company with global operations. Discuss the firm's activities outside the U.S.

    1.Identify which economic concepts, such as comparative advantage, apply to your firm.
    2.Explain how these economic concepts can be used to address the firm's problems and opportunities?
    3.Identify which economic and political policies affect your firm and explain how they impact business decisions.
    4.How does your firm use technology to strategic advantage?
    5.Discuss the impact of globalization on the firm's cost structure, markets, currency risk, and overall strategy. Be sure to provide a definition of globalization in your answer.

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    A. When is international trade an opportunity for workers? When is it a threat to workers?
    It is an opportunity for worker when there is increase in exports, which leads to increase in production. Increase in production leads to increase in employment of workers and increase in their compensation. On the other hand, it can be threat to workers if
    there is increase in imports. It leads to decline in production which can lead to reduction in workforce and wages?

    B. What are some of the major challenges confronting the international trading system?

    While international trade has been present throughout much of history , its economic, social, and political importance have been on the rise in recent centuries, mainly because of industrialization, advanced transportation, globalization, multinational corporations, and outsourcing.


    - To obtain goods that they cannot produce themselves
    - To increase choice for their consumers
    - To obtains goods at a cheaper price than what they can produce themselves
    - To make more revenues and profits. It an extra place in which to sell their goods
    - Countries specialize in the production of goods and services at which they are better.
    - To exploit a comparative or absolute advantage.
    Challenges :
    We live in interesting times. Powerful forces are re-shaping the global business scene: financial and economic upheaval in the Far East, Latin America, India, China and Russia is creating a tidal wave of change in the competitive environment. Organizations that once felt insulated from overseas low-priced competitors now find that they too must not only continue to constantly create new value for customers, but must do so at a lower price.
    To meet the challenge of simultaneously reducing cost and enhancing customer value requires a radically different approach to the way the business responds to marketplace demand. Business environment of the new millennium will have to contend with:-

    1. Turbulent markets that change rapidly and unpredictably
    2. Highly fragmented 'niche' markets instead of mass markets
    3. Ever greater rates of technological innovation in products and processes
    4. Shorter product life-cycles
    5. Growing demand for tailored products - 'mass customization'
    6. The delivery of complete 'solutions' to customers, comprising products and services.

    And all of the above to be achieved at less cost! Therefore the world of manufacturing is becoming ever more global. In the search for lower costs, greater flexibility and reduction of local risk, managers are increasingly looking to source and manufacture components and services on a global scale.
    These severe challenges mean that a new paradigm is needed. The key factor is agility - rapid strategic and operational adaptation to large scale, unpredictable changes in the business environment. One has to be aware of international factors which are important. (Refer ANnexure-I)

    Thus following can be called as reality of global competition
    1. Changing nature of World Business: Many new countries are grwoing rapidly than the developed countries. To increase the growth rate and profiatbilty the organisation need to focus on international operations. Moreover formation of trade block such as NAFTA, EU, ASEAN is also affecting the trade.
    2. Strategic Alliances and produciton sharing are increasing across the globe to reduce the costs and to improve the quality.
    3. To meet quality, customer service and cost challenges, reliance on global operations is required.

    THUS there is a ...

    Solution Summary

    This discusses the impact of globalization on the firm's strategy and also discusses about the international trade. I have taken the example of McDonalds