HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION Assessment Details and Submission Guidelines Trimester T1 2020 Unit Code HI2011 Unit Title International and Global Business Assessment Type Individual...

INTERNATIONAL AND GLOBAL BUSINESS
1. The new concept of globalization is a chain of how the world used to work. Firms that are small in nature can no longer deny the fact that they are not affected by the events that are occurring outside the border. There is much more relevance of events that are occurring in one country and are having an impact on the rest of the world. People who think they can live in isolation without working for big companies are just fooling themselves as there are much more competition and growth in the international scenario. It can also be seen that small firms these days are much more involved in the trade of exports (Peng, 2016). This is only possible for the advancement of the technologies; small firms can also take advantage of the international business scenario and can make a difference in their company's sales and growth. Companies that do not take advantage of this situation may be outnumbered in the end, as other competitors would realize the importance of the international business and its dominant effect on the companies. In the US there are more than 90% of companies associated with the export trade who are small companies and employees less than 100 staff and add up to 20% of the US total export. The rise of the mini multinational has given rise to the concept that even small firms can operate globally. The opportunities of the global framework are not limited to large MNCs but even small firms can take advantage of the economies of scale through large operations, though it does not have the infrastructure like the big business operations. Staying in the global business scenario does not only make a company seek profits and grow the business it also one way forward, but it also helps the business stay in the competition and survives in the long run (Manning, Kannothra & Wissman‐Weber, 2017). Firms that are producing goods that have demand in the international market can be seen as an opportunity to go global and take advantage. This move shall also mean that the companies can reduce or eliminate the small domestic competition. Scanning the international market for a good supply chain system is also critical for small business enterprises. This would give the firms an opportunity to get the best products or raw material for their business which can enhance the quality of the finished products this would give the companies an edge over other business competitors and also help in creating a brand image in that industry.
2. When a company starts a business in a country or a foreign land there are few challenges the company has to face in order to set up the establishment. The main risk is the areas of foreign exchange and political risks along with employment. The risk in foreign exchange occurs when there is a change in the value of the investment due to the fluctuation of the currency's exchange rate (Tallman, Luo & Buckley, 2018). The nature of the exchange rate is at times volatile and thus it becomes a risk for acquiring investments that possess high risk. For example, if a US-based company does the majority of its business in India, and if the rupee falls in comparison to the dollar, resulting in the profit earned, is calculated in rupee. The company would earn fewer dollars in term of profit as compared to the previous profit rate that the company used to earn before the fall in the value of the rupee. For the political risk if the country government changes its policies and that would affect the business environment negatively then it possesses a headache for the companies. Examples of such conditions can be increased trade barriers, increased tariffs, and taxes. In the employment factor, there are rules of the land for employment, which may act as a barrier to recruit employees at a cheaper rate. For example, the employment policies in Japan do not allow working hours to be more than 5 hours. Economic risks are also a dominant factor, especially in European countries. In the European countries, the fiscal crisis risk is found in almost 26 countries among the list of 39 and is the leading factor in the economies. Unemployment...