Global expansion has developed a tactical imperative for nearly all large organizations and multinational corporation (MNC) managers have a great deal on their hands in developing, monitoring and changing these strategies. Becoming international is an important factor in assisting organizations in becoming globally competitive. As we know, trading and bartering have been around since primordial times and trading has become global. As described by Cateora, Gilly, and Graham (2013), “a huge portion of all consumer products – from automobiles to dinnerware – sold in the United States is foreign made” (p. 7).
In addition, many U.S. corporations sell goods overseas to our foreign nations. The development of global markets was established by the needs of the consumer. If a domestic nation cannot supply what the consumer wants, this gives opportunity to the nations with the supply of the goods desired. Could our nation produce all the goods required for domestic consumer demand?
Between 1970 and 2005, the value of U.S. merchandise imports has grown far more rapidly than domestic output. These imports increasingly originate in the developing world. Indeed, over the last thirty years, the share of total US imports from developing economies increased from 8% to nearly 40%. (as cited by Kemeny & Rigby, 2012, p. 1-2).
Gaining a competitive advantage
They are several actions to take to gain a competitive advantage. Productivity plays a major role on a nation’s ability to trade globally. The more production produced in a less amount of time from one nation versus another gives the country the comparative advantage. Competitive moves can also create a competitive advantage. An example is when Komatsu started manufacturing heavy construction in the U.S. to cut into Caterpillar’s North American market, Caterpillar responded by concentrating on gaining market share in a bigger growth region on the development of China’s infrastructure. Caterpillar has funded a foreign direct investment (FDI) to open a manufacturing facility in China due to the increased demand for Caterpillar equipment. Caterpillar is focused on the long-term prospects connected to economic development and infrastructure investments scheduled for China (Dugan, 2012).
MNCs in Asia
As we can see from the last paragraph, Caterpillar is just one organization that is taking interest in the potential markets of China. As indicated by Chitakornkijsil (2011), “with China's entry into the World Trade Organization (WTO), multinationals' interest and enthusiasm in the Chinese markets increased greatly” (p. 16). One such organization is Starbucks which brand is known throughout the globe. In 2011, Starbucks had an estimated 376 operating stores in China and they expect to expand to 1,000 by 2015 (LePore, 2011). They have met the consumers’ requirements in China by expanding their product line to serve a popular local tea to the nationals. The management of the Starbucks studied...