Chapter 6: Strategic Practices in Business

Chapter 6: Strategic practices in business

6

Strategic practices in business

6.1

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Globalization

whiz of the most far-reaching developments in the world economy has been the process know as
globalization. Globalization has been set in motion by the undermentioned factors:
I

the liberalization of international trade and capital markets

I

technical developments in ICT and transportation

I

rapid economic development in emerging markets.

Businesses give way in a real-time global marketplace and their revolve about is upon maximizing comparative
advantage through sourcing and supplying products. Maximizing the private-enterprise(a) position of a business
requires two seemingly conflicting strategies:
Minimizing cost. Economies of musical scale can be created by centralizing business activities. Furthermore,
standardization in production components, low transportation cost and the variation of information and
communication make it possible for global companies to etymon raw materials and product components
from all over the world and to dally together and assemble raw materials, parts, and semi-finished
products at a virtuoso or few locations, to reduce the overall cost without each interference in product whole tone.
Maximizing tractableness.



Creating flexibility to suffice to customers demand is achieved by decentralizing
business activities. Changes in the cost/quality trade-off from a customers perspective, reduced lead
measure and shorter product life cycles require customization and postponement of final gather in or
close to the market.
Economies of scale and the cost of investing in site, plant and equipment favour centralization. Pushing
factors to decentralize are transport costs, flexibility and proximity to the customer. Depending on the
balance of these two forces, the company lead serve markets at regional, national, continental or even at
a worldwide level.
In the recent past, corporate decision makers did not face such conflicting...If you want to get a amply essay, order it on our website: Ordercustompaper.com



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