GLOBAL BUSINESS STRATEGY

Global business is a business that transactions goods and services across a country's borders for the
purpose of making a profit. In the global economy, all forms and sizes of international / multinational
business are the basis of world trade and the movement of raw materials, finished goods and special
services from one country to another. The methods taken to start a global business are usually:

1. GLOBAL SOURCING (Global Funding)

The process of processing and / or purchasing components from various parts of the world, then
assembling them into a final product. In other words, this method is an international division of
labor, meaning that certain activities will be carried out in countries that can do it at the lowest cost.

2. EXPORTING AND IMPORTING

Exporting is selling products produced from within to foreign markets, and importing is buying
products from abroad and selling them in their own country.

3. LICENSING AND FRANCHISING (Franchise)

That is an approach where a company gives full rights to the company's brand, technology, or
product specifications to other companies in return in the form of a lump sum payment or
service fee ( fee ), which can be based on sales. The difference between a license and a franchise is if
the license is usually used for manufacturing companies ( mahufacturing ), whereas the franchise is
usually used by service companies.

4. JOINT VENTURE (Joint Venture)

International Joint Venture is a strategic alliance that helps the parties involved to obtain benefits
that will be obtained through working together, or difficult to achieve alone. This method is realized
in the form of purchasing shares and or direct investment from a foreign company in a certain local
area; Another way could be to form a completely new form of business by foreign and local
companies.

5. WHOLLY OWNED SUBSIDIARIES (Fully Owned Subsidiary)

Wholly owned subsidiaries is a company with local operations that are fully owned and controlled by
foreign companies. As with joint ventures, such foreign subsidiaries may be formed through direct
investment in operations or through the purchase of shares in the company concerned. By making
such investments, foreign companies clearly risk their business. The company must be sure that they
have the expertise needed to control the problems faced in the new environment. In this case,
previous experience gained through a joint venture will prove to be very useful.