Becoming A Global Presence - Cooperative Efforts, Language And Culture, Economic And Legal Environments, Technology And Business Architecture, Logistics

With the world's disparate economies increasingly integrating into one global economy, and with the Internet affording more companies the ability to extend their reach overseas, the competitive pressures to establish a global presence—and the opportunities that abound therein—have taken on great importance. While a truly integrated and seamless economy was still a long way off in the early 2000s, the Internet was propelling the business climate in that direction, and companies were eager to stake a claim to this new economic environment. The boom in e-commerce coincided with the dissolving of international borders in the business world, thereby heating competition both domestically and internationally. Companies operating in markets with global reach have the option of trying to build a global presence, being acquired by a company doing the same, finding a localized niche, or being driven out of business.

While the United States was by far the largest e-commerce market in the late 1990s and early 2000s, analysts estimated that the proportion of online shoppers based in countries other than the United States would expand dramatically through the 2000s. For example, according to International Data Corporation, approximately two-thirds of the world's 31 million online shoppers would be based outside the United States by 2003. This attractive market potential, combined with the dramatically enhanced reach of individual companies with the aid of the Internet, sent companies on a course to extend their reach across the globe seeking to take advantage of the lowered costs and barriers to entry of foreign markets via e-commerce.

The proliferation of trade agreements and cross-border corporate cooperation and interaction are at the heart of the drive to become a global presence. The economy of the 21st century, according to nearly all economists, will be characterized by a continued blurring of national boundaries and the advancement of business models that are distributed electronically, thus offering vastly expanded flexibility and far greater reach than traditional business models of the past.

This development, however, is far from a panacea for corporations. With consumers able to purchase goods and services from companies situated anywhere in the world, the competitive pressures on individual businesses mount considerably. In addition, as products and services circulate in global markets, there is a tendency for them to become commoditized—that is, the sheer proliferation of such items forces prices downward and blurs qualitative distinctions between them, forcing customers to make their purchasing decisions based almost solely on price. As a result of the process of commoditization, companies are compelled to innovate not only their products but also their business practices and strategies to take advantage of the opportunities afforded by information technology and the global economy. In so doing, firms need to reconsider several of their traditional business practices in light of the new economic environment. Companies establishing a global presence devise strategies related to

• language
• cultural awareness and sensitivity
• global distribution schemes
• foreign and international legal, political, and economic environments
• local technical considerations
• and their own information-technology infrastructure