International Business in Global Trade

Subject: Management
Pages: 3
Words: 566
Reading time:
2 min
Study level: College

Chaebols, Keiretsus and multi -national corporations play important roles in many people’s lives. These large business organizations have become more dominant and influential in global trade because their products are sold in many countries. Large business corporations have developed strong market strategies to enable them take advantage of opportunities in global trade.

These firms have become more influential in international trade because many trade barriers have been eliminated. The reduction in trade barriers has integrated global markets which has promoted international trade (Peng, 2009, p. 67). Many business organizations are keen to take advantage of opportunities which have opened up in foreign destinations to increase their revenues. Some business firms have opted to invest in foreign countries with favorable investment conditions to reduce high costs of production they incur while operating in their home countries.

Globalization has helped many firms from North America and Europe to diversify their operations into other countries. Large American corporations such as Apple, General Electric and Intel produce most of their products from Asian countries. These countries have favorable investment policies which encourage foreign firms to invest there. Large corporations prefer operating in these locations because their costs of production are low and there is a ready market for their final products. These corporations are able to hire skilled employees locally at a low cost (Peng, 2009, p. 73).

Low labor costs make internal operations of large corporations more efficient. Large business firms are able to sustain their production activities for a long time because raw materials and other crucial production inputs are not expensive. Globalization has made consumption patterns to continue changing at a rapid pace. Many emerging economies have more middle income consumers interested in high quality products.

Technological advances and innovations have encouraged large business firms to develop long term strategies which focus on global markets. At the moment, many people in the world are more connected to each other than ever before. Video conferencing, email, video sharing websites and social networking websites enable more people in different locations to interact and share ideas.

This has made it easy for business organizations to promote their products and services to foreign distributors and clients (Peng, 2009, p. 82 ). Supply chain functions of large corporations have improved because clients in different markets are able to access their products within a short period of time. These corporations have partnered with experienced distributors who have a good understanding of different markets to make their products more accessible to consumers. Therefore, they are more knowledgeable on consumer behavior and preferences in different global markets where they sell their products.

The increase in trade and investments has increased the level of interaction between different people across the world. Many countries have improved their transport infrastructure which enables finished products to reach markets within a short time. However, some people are against increased global trade and investments.

They claim large corporations produce low cost products sold in developing nations and this stifles the growth of their local industries (Peng, 2009, p. 89). They also argue that the concentration of production activities in foreign destinations, leads to exploitation of local workers. There have been several cases in China, India and Philippines, where workers in large corporations have gone on strike due to poor pay and harsh working conditions. Some companies have also been accused of employing children as laborers, which contravenes the rights of children.


Peng, M.W. (2009). Global business.Mason, OH:Cengage Learning.