International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
1950s are already listed as advanced economies. Despite short-term
growth for the region are still valid. Their shares in global markets are
eating slowly the shares of developed countries especially in plastic,
rubber, medical and electronic components.
Larger economies, notably China are advancing rapidly. Having
sustained an annual GDP growth rate above 10 percent since 1980, China
has already transformed itself into the third largest economy in the world
at least on a purchasing power parity basis and seems poised to overtake
Japan in the near future.
These numbers indicate that the world’s economic centre of gravity is
shifting. Today, any company that seeks to grow has little choice but to
go where the growth is. For the vast majority of the world’s top 500
industrial corporations, such growth can only take place globally as the
home markets are saturated.
3. Technological advances are constantly improving. The cost of air
transportation, telecommunications and computers has declined sharply
over the past two decades. The decline in transportation costs, especially,
has motivated companies to explore new avenues and new countries. In
the case of computers and telecommunications, the consistent decline in
costs, and the recent widespread adoption of technologies such as video
conferencing and electronic mail have made operations simple, effective
and fast. By combining these trends with mobile telephones, video
telephones, the Internet and increasingly powerful computers, one can
optimize a real-time coordination of globally dispersed activities. This
will lead to a further increase in the intensity of global competition and
an even greater search for the best locations for the discrete activities in
company’s value chain.
4. The main hidden principle of WTO is to generate new business
opportunities throughout the world. The opening of borders to trade,
investment and technology transfers not only creates new market
opportunities for companies but also enables competitors from abroad to
enter the home markets.
5. The availability of cheap labour has caused many companies to shift their
manufacturing units to locations where a competent work force is
available at much lower rates. Increasing competition forces competitors
to offer better global services, to capture economies of scale, to exploit
the cost reducing or quality-enhancing potential of optimal locations and
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