Describe the structural and managerial changes and challenges experienced by a firm as it moves its operations from domestic to global (globalization process)

Question

What will be an ideal response?

Answer 1

Answer: A firm's initial strategy is to develop a sustainable competitive advantage in the U.S. market (domestic phase). As firms become visible and viable competitors in the U.S. market, strategic opportunities arises to expand the firm's market reach by exporting product and services to one or more foreign markets and/or by importing inputs (international trade phase). If companies are successful in its international trade activities, the time will come when the globalization process will progress to the next phase. Companies will soon need to establish foreign sales and service affiliates. This step is often followed by establishing manufacturing operations abroad or by licensing foreign firms to produce and service (multinational phase). Once companies own assets and enterprises in foreign countries it have entered the multinational phase of its globalization.