CH03 Epena - chapter 3 PDF

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chapter 3...

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The countries that represent the largest global business opportunities for the next decade are China, India, and the United States. There are many factors that contribute to this, two major factors are population and economic growth (GDP). For example, China has the largest populations in the world with 1.393 billion people. To add to that China also has the fastest growing GDP percentage meaning the economy is growing fast, profits, wages, and services are increasing and it is all available to the people in the country. Brazil on the other hand does not have that large of a population, but is still able to keep a high GDP percentage and also a high dollar. The U.S is almost the same as China it has a large population of 327 million people and also has a high GDP percentage even though the population is smaller than China. Companies tend to thrive in global markets when their country of origin enjoys comparative advantage in their industry. Comparative advantage is “the benefit a country has in a given industry if it can make products at a lower opportunity cost than other countries” Meaning a producer has a comparative advantage if it can produce more by using less. This lower cost in an efficient use of resources, which allows companies with a comparative advantage to thrive in global markets. An example of this is the electronic industry in china. Outsourcing is an attractive way for firms to tap into foreign markets because it allows companies to open its marketing perspective and at a lower cost it is also more efficient. It also helps the company to hire people with skills and talents which they cannot hire in their countries for a lesser price. Time difference is also another factor on why outsourcing is an attractive way for firms to tap into foreign markets. There are firms who outsource people of different time zone to ensure that the business operation will continue even though of the time frame in the firms' headquarters, meaning the firm will always be running which means productivity is also increased. However, there are always risk to these types of things for example some risk of

foreign outsourcing is quality control, social responsibilities, delivery dates, hidden cost, and outdated technology sills, loss of control or innovation. There are many things that can go wrong because there are many things that the owners of company won't always be able to see/ know. For example, quality control, many times goes wrong because people are not well experienced or because they are no longer invested in doing the work.

Work Cited: https://searchcio.techtarget.com/definition/outsourcing https://ebooks.cenreader.com/#!/reader/f3421709-49cb-42a3-9bc4183723c7a3a4/page/7d2b325ac7a78cb777a9f50093980c83...