Discussion of Global Business: Meaning, Scope, Advantages and Disadvantages (Coursework Sample)

GLOBAL BUSINESS
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Global business is the exchange of goods and services between countries across the globe. This gives rise to the world economy in which global events are affected by forces of demand and supply (Peng, 2016). Global business gives consumers and countries the experience to use of goods and services that are not available in their countries. The international market has an increased scope of the availability of goods and services, for example, currencies, spare parts, tourism, banking, transportation and stocks. An export is a product that is sold in the global market while an import is a product that is bought in the global market.
Peng (2016) explains that global business has similar features to the long distance exchange of goods and services that existed during the Stone Age. It can be between two or more countries or between global businesses. A global business is basically a company that does business across the globe. Attempts to enhance global business have been made through globalization. This entails increased interconnectivity in exchanging goods and services on an international scope. It increases economic growth and generates a wide variety of goods and services through attempts to reduce or remove existing trade barriers between countries.
Global business makes it possible for countries to use their resources in an efficient manner. Efficient production of a country’s resources increases the output and makes it possible for such a country to sell the goods more cheaply than the countries that are less efficient in their production processes. Besides, the country that is less efficient in production can obtain the goods by trading with the efficient ones. This important aspect of global business is referred to as specialization. Every country focuses its resources in the production of goods and services that gives it economic advantages in the global market (Kerr &  HYPERLINK "/search?tbo=p&tbm=bks&q=inauthor:%22Nicholas+Perdikis%22" Perdikis, 2014).
Zhang (2008) asserts that there is increased competition in the global business environment that leads to increase in quality, advertisement, price and design in a bid to profitably do business. Buyers and sellers are from different countries and they depend on middlemen for successful completion of their transactions. Middlemen exist in the global business environment because of the complexity of trading procedures. Middlemen in global business exist in the form of foreign exchange banks, clearing agents and forwarding agents among others. Given that the currencies for importing and exporting are always different, there is need for the use of a mutually accepted currency. The dollar and the pound are the selected hard currencies that are acceptable in global trade. There are controls by different governments and thus there is need for countries and companies trading on a global scope to understand how international restrictions and laws operate.
Global business exists because of variations in human wants and resources in different countries, different existence of factors of production, difference in technological advancements, variation in labor and entrepreneurial skills (Martin, 2015). In the global market, different countries produce a small range of goods and services and the input in the final product sold in the global market may be so small. This leads to specialization whereby each country focuses its resources on a product they can efficiently produce. This leads to efficiency and increased productivity. Global specialization increases when a country uses limited resources to produce large volumes of a given product. A country that specializes becomes more efficient in the long run thereby making it possible to exploit economies of scale. Such a country is more likely to produce large volumes of a product making it possible to export the surplus to other countries.
Global business has grown over the years due to its many economic benefits to different countries across the globe. The growth in global business over the years has been because of employment of modern production techniques, advanced transport systems, outsourcing of manufacturing services and rapid industrialization. It accounts for a bigger percentage of a country’s gross domestic product and it serves as a source of revenue for developing economies. The benefits of global business depend on the opportunity cost of production and these benefits are more achievable when trade barriers are reduced.
Global business makes it possible for the participating entities to make optimal use of their resources thereby helping in avoiding wastages. It facilitates availability of all types of goods because it makes it possible for a country that cannot produce a given good to import it. Also, it leads to specialization which helps in reducing costs of production. Participation in global business helps in reducing price fluctuations and this leads to equalization of prices of goods and services across the globe.
Developing economies can establish industries with the knowledge, equipment and machinery imported from developed economies. This helps in development of the less developed economies thereby improving the global economy. Participation in the global market leads to increased competition and this leads to the increase in quality of goods and services produced. The consumers benefit from the use of high quality products and increase the efficiency of firms that participate in the global business environment (Uhlhaas, 2003).
Global business brings the need for best means of transport and communication, therefore, for a country to participate it has to improve its transport and communication channels. It requires people from different companies and individuals to be in contact with each other. This economic interaction between individuals, companies and countries encourages exchange of cul...