Small Business Global Expansion

1016 Words5 Pages
| EVALUATING GLOBAL EXPANSION | | 5/27/2012 | Critical thinking 1- About 95 percent of the world’s population lives outside the United States, but many U.S companies, especially small businesses still do not engage in global trade. Why not? Do you think more small business will participate in global trade in the future? Why or why not? Although small business account for 50% of all private commerce in the United States, only 30% -of small business- engage in global trade. Global trade is the mechanism by which countries-and for that, matter businesses- exchange products (goods, services, capitals) it is simply: importing and exporting. In order for a business to get involved in global trade, it should find a comparative or an absolute advantage. In our case, this means that a small business should export a product that it produce most effectively and efficiently than any other business in that market or it should have a monopoly on a product. However, getting involved in global trade is a challenging and risky task. Small business need to observe, be determined and have the will to take risk. The primary factors that keep small business from engaging in global trade can be divided to 4 major factors: * Sociocultural forces: Culture can include values, belief, rules, language and customs. If a small business hopes to get involved in global trade, it is critical to be aware of those cultural differences among nations. Small businesses have to adapt and to cater to the local market. To adapt and to understand sociocultural differences could be one of the major hurdles in keeping small business out of the global trade. In fact, many US companies like IBM, Apple, and Wal-Mart have faced difficulties in dealing with these differences. * Economic and financial forces: In global trade, small businesses have to adapt to the fluctuation of

More about Small Business Global Expansion

Open Document