1) Why do businesses expand globally?
Businesses expand globally because the company’s aim in the end is to do one thing: to make money. They can do this by reaching out to other unexplored regions in which their company is currently not operating in and draw customers in that way, expanding to a larger global audience. The more franchises of a company there are around the world, the more money they can make as a whole. Also, there might be a big demand for a certain company in a certain place. Let’s just use Taco Bell in Hong Kong as an example of this. Socially and culturally, 8/10 people said that they wanted a Taco Bell in Hong Kong, meaning that it is desired even outside of the U.S.
2) How can we analyse a market’s suitability for expansion?
There are many ways to analyse a markets suitability, but the main and most efficient way of doing so is with the P.E.S.T. analysis method. It stands for political, economic, social / cultural, and technological factors. If all factors are taken into consideration and there are benefits that outweigh disadvantages (if any) for that specific factor, than it is safe to say that a company will have a fair chance in the market it is looking to expand into. The main 2 points are the political factors and economic factors. These do impact the business’s chances of survival the most, because they may have restrictions (depending on the location) on the expanding business, thus they may make less money. An example of this would be the rental prices of a place. The business has to consider the advantages and disadvantages mainly, and only then should they decide to expand or not.
3) How does one determine if an action is ethical?
We determine this by seeing if they are doing actions that are responsible for the citizens, for the company itself, and to the community they are wanting to serve. A company may be deemed unethical when they do something very controversial, such as Nike using unpaid workers and putting them in conditions that are not suited for the average person. Many believe this is breaching a moral aspect of the company, and that is why they are known for being “unethical”. Society have generally been influenced by companies that they are flawless and make the best products, but behind the scenes is where it happens the most. An ethical action would be something that is the opposite of unethical. The company could have been doing something that benefits the society, such as using environmentally friendly materials to prevent harming the environment.
4) To what extent do businesses behave ethically?
Many businesses try to act ethically, to earn reputation, to earn more trust from a local and global community to earn more money that way. Despite this, some companies believe that being unethical will benefit their company, such as not paying workers, or using unsafe materials / machines to get the job done quicker. They are often to benefit themselves, and do not really take into consideration society’s views on their company. To an extent, many companies do behave ethically in certain aspects, whether that would be making sure their products do not harm the environment, even little things such as Goldman Sachs voicing their opinions on gay marriage and supporting it, all deem a company “ethical”.
5) To what extent does globalization create opportunities for business?
Globalization is something that can not be stopped or will be stopped in the near future, so as new cultures expand into new countries or continents, many people see that as an opportunity to start their business in that country. It creates opportunities as maybe there are branches of that company already in that area, and may want to display their company to a much wider audience as mentioned previously. More customers may result in globalization, and that comes naturally along with globalization itself. Globalization has also brought many new people into an area. These people may have great ideas on creating a business that suits the local area. This happened in Vancouver, and the place is currently known as Chinatown. Although China did not “invade” or “colonise” Canada, their impacts have been viewed worldwide, and Chinatown is a replica of China’s culture and experience. Chinatown also provided a lot of business opportunities to smaller entrepreneurs, with many small street vendors selling miscellaneous items such as food and jewellery. Without globalization, Chinatown could not have been possible, let alone allow America to see China’s lifestyle and culture.