- There are many reasons American companies have been going more and more global through recent decades. Though globalization of American companies and corporations brings disadvantages, especially to the United States itself, it also positively affects these companies. First of all, consumer markets in countries with developing economies are growing. People want to buy different goods and services and are solvent enough to do that; if not, they will turn to banks for consumer crediting programs to acquire what they want. Secondly, supported by well-executed and consistent advertising and PR strategies, expenditure to different world countries drastically increases brand recognition, especially if the company has a substantial line of brands. What is more, American companies go global, because of the taxes on the territory of the United States. For example, many of the countries located in Europe have lower tax rates, especially on the East. Consequently, American companies have ф chance to become more widespread and also receive substantially more profit. All of it also comes with a cheaper workforce: many people are ready to work for less money to achieve fundamental experience American companies can provide; it will be an important milestone in their career. Lastly, going overseas increases sales. It becomes evident when looking through the numbers. In 2010, McDonalds’s earned 66% of its revenue ($34 billion) outside of the U.S., Nike earned 50% ($21 billion of revenue); Amazon made striking 45% ($34 billion). To add to that, Intel, which is not so popular in America now because of Apple, owes most of its revenues to overseas markets (85% of $44 billion) (Newman, 2011). In addition, Wal-Mart has also been paving its way overseas, with 26% of $420 billion of revenues coming from outside of the U.S (Newman, 2011).
- When entering new markets outside of the United States, American companies carefully consider not only the general international political environment, but also the political status quo in every taken country they are planning to enter in their overall strategies. Expenditure is a long-term run which may seriously suffer from uncertainty. So, the main concern here is political instability. Governments changing every year, with different political parties coming to power one after another, make it hard to find reliable representatives in different state bodies to protect the interests of the company. Moreover, political instability brings economic problems. For example, the national currency of a particular country can devaluate, which in its turns would make the products of American companies more expensive, and therefore, less competitive; it’s the foreign companies who suffer the most in such cases. In this light, such important expenses as salary or wages would also increase in order to keep the employees on their positions. In addition, economic instability does not allow planning far-reaching and consistent marketing strategies, because everything may change in the blink of an eye, wasting both time and money.
- I agree that cultural differences are greater in the modern world than they ever have been, and that is due to globalization. With the Internet almost erasing many of the boundaries of communication, with world population constantly increasing, more people migrate to other countries to live and work, searching for a better life. Such trend is common for developing countries, with many innates eager to find a new homeland. As the United States, most of the European countries (many among them already being multinational) become a home for very different cultures. Despite of migration policies in some of the countries, the process is surely inconvertible. Nowadays, we are all learning and trying to live with people from another countries and cultures. Some people and experts say globalization may dissolve boundaries between various cultures, destroying them (Carden, 2008). In my opinion, it mostly does the opposite, outlining peculiarities only common to a particular culture, reminding us we are different, and that we have a lot of cultural heritage to preserve and share with others. On some level, some of the cultures mix, so, as a consequence, marketing strategies should become more complex if companies want to reach their potential customer.
- The digital age truly changed the face of marketing with approximately 85% of businesses using Internet to operate. Firstly, it is very easy and not that expensive to set up an appealing website where the company and its brands would be presented to increase customer awareness. Moreover, many of the purchases are done via Internet not leaving the house, which pushed companies to reform the way they contact with the customer. To add to that, Internet, mostly Google, made it easy for companies to reach their potential buyers with different advertising campaigns on whatever website he or she is on, following them everywhere. Digital advertising also lessened the influence of more classic advertising strategies and provided a foundation for more creative and efficient advertising on the Internet. What is more, long array of various social media platforms create a whole new level of advertising, with companies hiring people with a big amount of followers on Instagram to post photos with their product, for example. Lastly, e-mail advertising is somewhat still in use today, but mainly serving as a supplement way of advertising - to inform on discount programs and season sales.
References
Carden, A. (2008). Does Globalization Destroy Culture? Independent. Web. Accessed March 11 2014. Retrieved from http://www.independent.org/newsroom/article.asp?id=2258
Newman, R. (2011). Why U.S. Companies Aren't So American Anymore. U.S. News. Web. Accessed March 11 2014. Retrieved from http://money.usnews.com/money/blogs/flowchart/2011/06/30/why-us-companies-arent-so-american-anymore
