Name : Ire Dela Cruz

Activity No. : Activity 3

1. What is global market competition?

 The services or goods provided by competing enterprises that serve international
customers are referred to as global competition. Some examples of local
competition where people compete against one another for one common goal: to
be the greatest at what they do. A company's core competency is what it excels in.
Global competition has enabled businesses to buy and sell their services on a
global scale, resulting in higher profits and a more level playing field in business.

2. How do you compete in a global market?

 There are various ways for a corporation to enter global trade. When a corporation
decides to enter the global market, exporting, or selling domestically produced
products to purchasers in another country, is usually the least complicated and
risky option. A corporation can sell directly to international importers or
customers, for example. Large firms like General Motors and Apple are not the
only ones who export. Exporting is the most common way for small businesses to
access the global market. Selling a license to manufacture a product to a company
in another nation is another successful option for a company to enter the global
market with little risk. A manufacturing method, trademark, patent, trade secret,
or other private knowledge is licensed when a company (the licensor) agrees to
allow another company (the licensee) use it. In turn, the licensee agrees to pay the
licensor a royalty or fee that both parties agree on.

3. Why do companies compete in international markets?

 Many companies competing in foreign marketplaces expect to save money. If a
company can increase its sales volume by entering a new market, for example, it
may be able to achieve economies of scale, lowering its production costs. Going
global has ramifications for interacting with suppliers as well.

4. How does global competition affect business?

 Global competition has enabled businesses to acquire and sell their services on a
global scale, resulting in higher profits and a more level playing field in business.

5. List 5 advantages of competing in global markets. Explain

 Access to New Customers -.getting access to new clients is the most obvious
reason to compete in overseas marketplaces.
 Lowering Costs - Offshoring has become a popular, if divisive, method of cutting
costs. Relocating a commercial activity to another country is known as offshoring.
Many companies competing in foreign markets aim to save money. When a
company expands its sales volume by entering a new market, for example,
economies of scale can be realized, lowering overall and average production
costs. Greater production from existing facilities (sharing fixed costs over bigger
sales) and other shared costs, such as research and development (R&D) and
marketing, may be linked to economies of scale.
  Diversification of Business Risk - "Don't put all your eggs in one basket," as the
old adage goes. When applied to business, this adage implies that companies
operating in only one country are at risk. The risk of a business operation failing
is referred to as business risk. If a company's supply or market is fully reliant on a
single country, bad economic, political, or natural events in that country can cause
severe problems. Business risk is decreased when a company diversifies across
various countries, just as spreading one's eggs into multiple baskets lessens the
likelihood of all eggs being cracked.

 Gain relationships across borders - Not only may a company build relationships or
even partnerships within its own country, but it can also form alliances with
international companies to gain a competitive advantage in the global market.
 Increase the quality of a product or service - When a company develops into a
new market, it gains greater experience. They learn knowledge at a faster rate
with analytical tools, resulting in a higher quality of service or products provided
to customers.
6. List 5 disadvantages of competing in global markets. Explain
 Political Risk - While competing in international markets has significant potential
benefits, such as access to new customers, the ability to cut costs, and the
diversification of company risk, it also has significant risks. Political risk is the
possibility of government upheaval or commercial involvement harming a
company's operations within a country.
 Economic Risk - Economic risk is the possibility that a country's economic
conditions and policies, as well as property rights protections and currency
exchange rates, will have a negative impact on a company's activities within that
country. Executives who head companies that do business in a variety of nations
must assess these many factors and try to predict how they will effect their
businesses. Economic risk poses significant challenges to executives since
economies are unpredictable.

 Cultural Risk - The possibility for a company's operations in a country to struggle

due to variations in language, customs, conventions, and client preferences is
referred to as cultural risk. The history of business is littered with vivid examples
of how cultural differences have harmed businesses. Even when the cultures
involved are quite similar and speak the same language, cultural differences can
cause complications.

 More financial risk - A company attempting to enter a global market faces a

difficult problem of adapting their marketing approach (which costs money) to
countries with different values, cultures, and languages, which could result in
failure.
 Returning Products - Because not all foreign customers will be satisfied with a
company's products, a mechanism for returning them and processing a refund
must be in place. Although credit cards and internet financial tools have made the
financial side of the equation easier, the actual return shipping can be just as
complicated and costly as it was before. A business must consider how a product
will be returned and who will pay for the shipping costs.

7. What are the steps in gaining competitive edge in global market?

 Successful leaders understand the importance of adapting to the ever-changing

ways of doing business in the global marketplace. These leaders strive to create
competitive advantages based on the organization's core strengths while also
lowering operating expenses. These businesses also recognize that doing their
 best isn't always enough to stay on top. They will need to learn about other
important competitors in the global marketplace in order to maintain their
competitive position in the domestic market. They must be aware of possible
domestic and international competitors' plans, as well as their own strengths and
shortcomings. Global competitors recognize that rising rivalry necessitates the
development of new strategies to differentiate their products and services.
Knowing that a company's business could be lost to the competition is one of the
biggest motivators to develop.

8. Is global market competition vital for the growth of the organization. Explain
 Yes, simply put, the potential for global competition is best when the benefits of
global volume—whether in terms of lower unit costs, a better reputation, or better
service—outweigh the additional costs of supplying that volume.

9. Site a global difficulties/challenges that an organization might encounter in a global

market.

 Language Barriers - When doing worldwide business, it's crucial to think about
the languages spoken in the nations where you want to expand.
 Cultural Differences - Each country has its own unique language makeup, as well
as its own distinct culture or blend of civilizations. Holidays, arts, rituals, meals,
and social conventions are all part of culture for a given group of people.
Learning about the cultures of the countries where you'll be doing business is
crucial and enriching.
 Managing Global Teams - Managing people from all over the world is another
issue of international business. It can be challenging to account for language
difficulties, cultural differences, time zones, and varied levels of technology
access and dependency while trying to work as a team.

10. Discuss what are the possible solutions in those difficulties.

 Language Barriers - Hire an interpreter and get advice from a native speaker and
resident of each nation. It's also important to think about the languages spoken by
your company's employees in overseas locations. Investing in interpreters will
assist ensure that your business runs effectively once again.
 Cultural Differences - successful cross-cultural management can be a difficult
endeavor, especially for teams having members from all over the world. People
who communicate with each other face-to-face for eight hours a day will bond
and establish common ground more quickly than those who exclusively interact
with each other online at specific times..
 Managing Global Teams - Facilitate regular check-ins with your worldwide team,
preferably utilizing a video conferencing technology so you can connect in real
time, to create and maintain a good working relationship.