1. How can businesses reduce foreign exchange risk?
- Foreign businesses need to face a lot of risk. They depend on international suppliers, spend a lot on transportation, and don't know if their products will sell in other countries. Market research helps businesses understand global consumer trends and market demands. Surveys and risk management are important before doing business. They help businesses make decisions and reduce risk. For the exchange risk, Use futures or options to lock in exchange rates. Second, keep income and expenses in the same currency to avoid currency conversions. Finally, negotiate to settle with customers or suppliers in the home currency to avoid exchange rate fluctuations.
2. What is a famous global company that you know? What type of globalization strategy do you think they use?
Apple is a famous global company which is known for its electronic products. Apple uses a global strategy, offering the same products as the Macbook or iPhone across all markets. The key decisions including design products and global marketing, are managed from its headquarters in the US. However, Apple also transnational strategy , adapting its marketing and services to local preferences and legal requirements in different countries. Additionally, its global supply chain balances efficiency with local responsiveness, reflecting a blend of global and transnational strategies.
3. Do you think the pros of globalization outweigh the cons?
Yes, globalization could be outsourcing to countries with cheaper raw materials and labor, bringing a lower price to the customers. Improved human rights in developing countries. Increased productivity when countries make products that they have a comparative advantage in. Better jobs in developed countries and increased capital flow due to foreign investment. Some people might think outsourcing will decrease jobs in Canada and cause a loss of comparative advantage. But the decreasing cost will lead to a high productivity and increase the job opportunities in other industries also the higher profit.