The country. By doing so they are saving

The main reason corporations choose to go global is to
expand their profits. By expanding to international markets they are able to
tap into a new customer base and increase their sales. This also helps them to
reduce the risk of becoming dependent on only the current customer. There are
also cost savings associated with the export and import of products. For example,
a car manufacturer may decide to expand to another country and build a facility
in country. By doing so they are saving on the costs associated with having to
export the cars from one country to another. The cost of production tends to be
lower as well. This is a fact that is a bit of a touchy subject with many
American citizens. Businesses are able to produce their products for less and
pay lower labor costs in other foreign countries. Many of your major brands do
this such as Apple and Nike. Lastly there is building up of your brand.
Expanding to a global market allows you the opportunity to increase the
recognition of your brand.

An organization that successfully expanded into the international
arena is Walmart. They have had a great deal of success when it comes to
opening stores abroad. Walmart opened its first international store in Mexico
City in 1991 (Gupta & Govindarajan, 2002).  By examining their current market status the
retail giant realized they were only capitalizing on less than 5% of the global
market. To combat this they began evaluating the world and scouting potential
locations. Ultimately they went with Mexico, Brazil, Argentina, and Canada (Gupta & Govindarajan, 2002). Walmart created
value through their global expansion by increasing their brand. By putting stores
in locations across the global they became a household name. While selections
may differ a bit the concept of the stores remains the same. According to the
textbook, there are 4 basic strategies used with regards to globalization. They
are global standardizing strategy, localization, transnational strategy, and
international strategy (Hill, 2014). Based upon the
process Walmart used, I would have to say they followed the localization
strategy. This strategy “consists of increasing profitability by customizing
the firm’s goods or services so that they provide a good match to tastes and
preferences in different national markets” (Hill, 2014). By customizing the
stores and it’s products to the areas they are located in Walmart is able to
create value. A good example of this would be how in my local Walmart they sell
Mardi Gras merchandise, which would not be sold in a store located up north.
Consumers value that they can go into their local stores and have access to
regional products.

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Ultimately
business operates to make a profit therefore if there are opportunities to
increase said profit it is understandable that they would want to maximize
those opportunities.

 

Gupta, A. K., & Govindarajan, V. (2002, June 19). Taking
Wal-Mart Global: Lessons From Retailing’s Giant. Retrieved January 30,
2018, from strategy+business:
https://www.strategy-business.com/article/13866?gko=e19cb

Hill, C. W. (2014). International Business Competing in
the Global Marketplace. New York, NY: McGraw-Hill Education.