Economic Reasons for Internationalization

International marketing is the process of bringing goods and services to markets outside of the country where such goods and services are produced, or where the company is located. This sometimes convoluted process is possible through innovations in technology and communication which have occurred during this century and which make it possible for labor and technology to stretch beyond a single border. International companies compete for labor and other resources on a global scale, not merely a local basis, and are also dependent on the global economy to provide them with their market opportunities. These companies must be able to deal with the various government regulations and policies that may well be in conflict with one another, and must also be willing to demonstrate an ability to overcome challenges such as fluctuations in currency valuation. The reasons that companies participate in internationalization is that they believe that global markets offer greater economic benefit. This research considers the economic factors which motivate companies to internationalize.

When considering international marketing, companies must take into account their own internal structure, the role of the governments of the countries considered, and the way in which the company would operate in the foreign nation (whether directly, as part of a joint venture, or through some licensing effort). Political situations must be considered, and the labor situation

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States, to bring it in line with European standards, and work standards governing safety on the job taking on global dimensions as workers come to press for international standards in benefits. As such standardization occurs, the cost benefit of operating in one location over another will decline and prices (wages) for labor will also stabilize throughout the world. This is, however, a long-term consequence which has yet to be realized on a large scale. Countries such as Egypt and Pakistan, which have a high level of education but not a high level of jobs for their population will have to find ways to build up their domestic economies or they risk losing these talented individuals to other countries that are more economically appealing. It can be in the best long-term interest of global companies to assist in this effort despite driving up costs in the short-term. Long-term, this type of operation shifts the demand curve for goods outward so that consumers are able to "afford" higher prices for goods and services. Aside from being able to take advantage of a highly educated work force, these companies can also build up demand for products without significant competition. By building operations in these countries using loca

Category: Economics - E