Name:  Rio Awitin                                        Mgt.

1130 Date: 07/13/2020

The Global Environment

1. What is globalization? 
Globalization is the spread of products, technology, information, and jobs across
national borders and cultures. In economic terms, it describes an interdependence of
nations around the globe fostered through free trade. On one hand, globalization has
created new jobs and economic growth through the cross-border flow of goods, capital,
and labor. On the other hand, this growth and job creation is not distributed evenly
across industries or countries. Specific industries in certain countries, such as textile
manufacturing in the U.S. or corn farming in Mexico, have suffered severe disruption or
outright collapse as a result of increased international competition. Globalization’s
motives are idealistic, as well as opportunistic, but the development of a global free
market has benefited large corporations based in the Western world. Its impact remains
mixed for workers, cultures, and small businesses around the globe, in both developed
and emerging nations.

2. What are the different regional trading alliances? Who are the member
countries? 
Global competition is shaped by regional trading agreements including the European
Union (EU), North American Free Trade Agreement (NAFTA), the Association of
Southeast Asian Nations (ASEAN), and others. Regional trading agreements refer to a
treaty that is signed by two or more countries to encourage free movement of goods
and services across the borders of its members. The agreement comes with internal
rules that member countries follow among themselves. When dealing with non-member
countries, there are external rules in place that the members adhere to. Quotas, tariffs,
and other forms of trade barriers restrict the transport of manufactured goods and
services. Regional trading agreements help reduce or remove the barriers to trade.

3. How do business organizations go global in their expansion? What are the

common approaches?
The method a company uses to expand its business is largely contingent upon its
financial situation, the competition, and even government regulation. Some common
approaches for growth strategies in business include market penetration, market
expansion, product expansion, diversification, and acquisition.
 Market Penetration - strategy one growth strategy in business is market
penetration. A small company uses a market penetration strategy when it
decides to market existing products within the same market it has been using. 
  Market Expansion or Development - a market expansion growth strategy, often
called market development, entails selling current products in a new market. 
 Product Expansion Strategy - a small company may also expand its product line
or add new features to increase its sales and profits. 
 Growth Through Diversification - growth strategies in business also includes
diversification, where a small company will sell new products to new markets.
This type of strategy can be very risky. A small company will need to plan
carefully when using a diversification growth strategy.
 Acquisition of Other Companies - Growth strategies in business can also include
an acquisition. In an acquisition, a company purchases another company to
expand its operations.

References:
Kopp, C. M., & Barnier, B. (2020, April 30). Globalization. Investopedia.
https://www.investopedia.com/terms/g/globalization.asp
Corporate Finance Institute. (2020, January 29). Regional Trading Agreements.
https://corporatefinanceinstitute.com/resources/knowledge/economics/regional-trading-
agreements/

Kopp, C. M., & Barnier, B. (2020, April 30). Globalization. Investopedia.

https://www.investopedia.com/terms/g/globalization.asp