Markets & Exchanges

Essay by ladyheart143College, UndergraduateA+, February 2008

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Describe the driving business forces in both the foreign and domestic environment. In what ways do they operate differently? Why? Provide an example.

According to Ball, D. et al. (2006) the five driving business forces in both the foreign and domestic environment are:1.Political•Firms are presented with substantial marketing opportunities through preferential trade agreements.

•By overcoming the barriers to trade and foreign investment international firms have been able to open new markets for export and production in foreign countries.

•Through privatization economics and global competition have penetrated the industry in previously communist nations.

2.Technological•Consumers are able to learn more about foreign trade through advancements in computers and communications technology.

•Advertisers are able to create regional and global consumer demand for their products and services through Cable TV advertisements.

•Manufacturers can communicate and coordinate more rapidly for worldwide production and design functions through global communication to ensure to that plants located around the world can be directed to work on the same product at the same time.

•Small companies are able to compete globally by way of internet and network computing.

•Consumers are able to view products and demonstrations via videoconferencing.

•E-mail has made it possible for consumers and retailers to cut down on the expense of postal and fax services.

•3.Market•Saturated local markets can lead companies to establish themselves in foreign markets.

•Advertising agencies are able to establish companies in a foreign market to avoid local competition.

•Globalization of a company creates global consumers.

4.Cost:•Production and inventory costs can be lowered through globalization of products.

•Lower production and inventory costs provide consumers with a more affordable product.

5.Competitive:•Competition between domestic and foreign markets leads to globalization.

•Globalization assists companies in safeguarding domestic markets from foreign competitors when they move their products into foreign countries.