It’s difficult for a company operating in today’s global economy to avoid experiencing the effects of foreign competition and markets. Consequently, a company may consider exploiting not only domestic market opportunities, but those in other countries as well.
It’s important to perform due diligence to gain some reliable intelligence about foreign market opportunities before taking the plunge. A first step might be acquiring an understanding of international and global companies.
An international company operates within the borders of its country of origin but also may export products or services to other countries or import products or materials from foreign countries.
The company’s corporate strategy will define the foreign markets and businesses in which it will operate. In turn, its business strategy will determine how it competes in those markets. For example, a Washington-based coffee manufacturer and retailer might import Arabica coffee beans from China to the United States, where the beans are roasted before being shipped to Europe for sale in department stores. In similar fashion, a Washington-based government contractor who builds aircraft and satellite systems might confer a percentage of a contract to a Mexican contractor to supply a fixed satellite space system.
A global company is based in one country from where it establishes operations in multiple countries around the world. Because of a global company’s geographic reach, it’s also referred to as a “non-national company.”
In most cases, a global company will manufacture some products that will find acceptance in most international markets where it operates. In other cases, a global company will develop products for a specific foreign target market. For example, a chip manufacturer will produce its traditional line of corn chips that meet the tastes of many consumers and market those chips in both domestic and foreign markets, such as the United States and Canada. But it might also attempt to localize its chips by developing more spicy flavors to better meet the tastes of consumers in a particular country or region, such as China.