How do enterprise organizations go global?

In the process of globalization, organizations choose different ways according to the stage of global business. In the initial stage of globalization, managers can enter the international market without a lot of capital investment. At this stage, the company may start its global operation through global procurement, that is, buying the cheapest materials and labor from abroad. Their goal is to gain a greater competitive advantage at a lower cost. For example, Massachusetts General Hospital invited radiologists from India to explain the use of CT scanners. Although global outsourcing is usually the first step towards globalization, due to its competitive advantage, many organizations still adopt this method even if they are ambitious. However, in addition to global outsourcing, careerists need more investment at each stage, so organizations will also take more risks. Next, the way for management to enter the international market is to export products to other countries, that is, to produce products at home and then sell them abroad. This is a passive first step towards globalization. In addition, an organization may initially go global by importing products, that is, selling products made overseas to China. Both export and import are just the embryonic stage of global enterprises, and the investment and risks involved are minimal. Most organizations, especially small enterprises, continue to operate globally through import and export business. For example, Ha, ibhai and Spice Emporium, small enterprises in Durban, South Africa (with a revenue of about $7 million), sell condiments and rice all over Africa, Europe and the United States. However, some organizations have established some enterprises worth millions of dollars through import or export, and Pierre Import Company has done the same. This company imports products from more than 40 countries and sells them in more than 1 100 stores in North America. Finally, in the initial stage of global operation, managers can adopt two similar ways: authorization and franchising. All of them give other organizations the right to use trademarks, technologies or product specifications through one-time payment or a certain fee based on sales. The only difference is that licensing is mainly used for manufacturing organizations that produce and sell products for other companies, while franchising is used for service organizations that use famous brands or business ideas of other companies. For example, consumers in Thailand can enjoy Bob's Big Boy's Burger, Filipinos can enjoy Sharkey's sPizza, and Malaysians can also enjoy Schlotz's Sandwiches-all of which come from franchising. In addition, Anheuser-Busch also granted licenses to abatt in Canada, Modelo in Mexico and Kirin in Japan to brew and sell Budweiser beer. Generally speaking, once the organization has developed global business and gained experience from the international market, managers may decide to make more use of direct investment. Among them, they can take the form of strategic alliance. A strategic alliance is a partnership between an organization and a foreign company, in which both parties share resources and knowledge when developing new products or establishing production organizations. Both sides of the alliance * * * take risks * * * enjoy benefits. For example, IBM in the United States, Toshiba in Japan and Siemens in Germany have jointly developed a new generation of computer chips. A joint venture is a special strategic alliance, in which both parties agree to set up an independent organization for a certain enterprise goal. For example, Hewlett-Packard has established a large number of joint ventures with various suppliers around the world to develop different components for computer equipment. Compared with the company's own independent investment, this cooperative relationship provides a fast and low-cost way for the company's global competition. Finally, the management can directly invest abroad by establishing foreign subsidiaries, an independent production organization or office. This subsidiary can be managed by multinational companies (domestic control) and global companies (centralized control). As you may have guessed, this form has invested the most resources and faced the greatest risks. For example, United Plastics Group of Illinois has opened three injection molding plants in Suzhou, China, and plans to build at least two more. Chuck, the company's executive vice president for business development?