They also go global in order to meet customer needs and to become more competitive. Global companies are those that have a global market presence, supply-chain infrastructure, capital base, and corporate mind-set. The global market is not an
Economies of scale will work to the advantage of the franchisor. Therefore, franchising enables small businesses to compete with big businesses. This is due to the support from the franchisor as well as the network of other experienced franchisees.
Challenges of a Global Company The expressions “Global Company” and “Multinational Company” may seem to be alike, but under closer inspection one may notice that there are different characteristics. A Multinational company has investments in other countries, but do not have corresponding product offerings in each country. The focus is more on adopting the product and services to the individual market. When an enterprise has made investments in other countries, but the products and services are marketed under the same coordinated image or brands in all the markets it is revered to as a global company. In other words the product offerings are similar from one country to the next.
Within the contract it often states which member of the partnership has invested what into a business (capital items). One of the main advantages to having a partnership owned business is that shared responsibility comes with this type of ownership. Due to this it can be easier to overcome problems as well as sharing the overall stress which come alongside owning a business. Business decisions can be consulted within a partnership whereas in a sole trader ownership it is down to one person. However disputes can arise when there are multiple opinions within the ownership of a business, disputes can also rise over the amount of effort put in by certain members of the partnership compared to the others.
The biggest difference between the two is that the multinational business has an equity and management position in the foreign firm this is in the joint venture kisses. A partnership between host- and home-country firms is formed, usually resulting in the creation of a third firm. • The joint venture agreement allows the company more control when it comes to operations and the firm has more access to information on local market. • The joint venture agreement is very much preferred because it allows the firm to avoid control problems that are associated of the other types of entry strategies. The host firm helps the multinational firm settle in the new environment.
Dilution of power can lead to arguments and problems between shareholders and directors Area for expansion is higher as it is easier to raise capital and limited liability can be exploited. Franchises (For the franchisee): Advantages Disadvantages Less financial and experimental risk. Can be expensive to start up. National Marketing Help. Profits must be shared with the franchisor.. Back up support from franchisor.
Franchising advantage and disadvantages Franchising is a form of business that benefits all the parties concerned. This may be true, but franchising, like any other business model has its benefits and drawbacks. Since this studies is focused on the franchisor, the advantages and disadvantages of franchising will be viewed from the franchisors perspective. (Unidroit) Growth perspective: Pros and Cons Rapid expansion is the most obvious advantage franchising creates for an entrepreneur. Franchising makes it possible for a business to expand quickly over a short period of time with little capital.
The second point is simple management can effectively control the operation of the company. Third point is relatively low start-up costs but development so fast. The first disadvantage is dealing with relationships is a big challenge. The second disadvantage is difficult to get
The unique structure of ownership is less organized and is the simplest type of business to start. The advantages of sole structure company is easy and inexpensive to form, full control and tax preparation easy. The disadvantages of the sole company structure is unlimited personal liability
As we would go traveling and buy products from overseas brands. Even we do not want to start the business, we would still touch with globalization because we may work as an employee for an international company. Also, the foreign affairs would affect our domestic growth and it could happen at anytime. So, we should know more about the information around the world. This is why we need to learn Globalization and Business.