CHAPTER 8

PADILLA, Juan Carlo A.

 Service and Retail Location
• A space you lease for the selling of goods to
consumers . When it comes to
business, retailers have one overall goal: to
sell merchandise. That's why they focus on
sales floor space, adequate parking for
customers, and an overall image that draws in
customers.
 Global Locations

• the process by which businesses or other

organizations develop international influence
or start operating on an international scale.
 Effect of Globalization

• Globalization has opened new markets and it

has meant increasing dispersion of
manufacturing service and operation around
the world.
 Other effects
• It creates greater opportunities for firms in less
industrialized countries to tap into more and
larger markets around the world.
• This can lead to more access to capital flows,
technology, human capital, cheaper imports
and larger export markets.
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 Facilitating Factors of
Globalization
• Trade Agreements
are the product of negotiations between
two or more sovereign nations that dictate
the terms of the acceptable exchange of
goods and services between the parties.
• Technology
• Technological advances in
communication and information sharing
have been very helpful.
• These include faxing, e-mail, cell phones
and the Internet.
 Benefits
• Markets
• Companies often seek opportunities for
expanding markets for their goods and
services, as well as better serving existing
customers by being more attuned to local
needs and having a quicker response time
when problems occurs.
• Cost saving
– Among the areas for potential cost saving
are transportation costs, labor costs, raw
materials costs and taxes.

• Legal and regulatory

• There may be more favourable liability
and labor laws and less restrictive
environmental and other regulation.
• Financial
– Companies can avoid the impact of currency
changes that can occur when goods are
produced in one country and sold in other
companies.
• Other
• New sources of ideas for products and
services and new perspective on operations
and solutions to problems.
 Disadvantages
• Transportation Costs
– High transportation costs can occur due to
poor infastracture or having ship over great
distances and the resulting costs can offset
savings in labor and materials costs.
• Security Costs
– Increased security risks and theft can
increase costs. Security at internatonal
borders can slow shipments
• Import Restrictions
Some countries place restrictions on the
importation of manufactured goods, so
having local suppliers avoids those issues.
• Unskilled Labor
– Low labor skills may negatively impact
quality and productivity and the work ethic
may differ from that in the home country.
 Risks
• Political and Economic
– Political instability and political unrest can
create risks for personnel safety and the
safety of assets.
– Economic instability might create inflation
and deflation.
• Legal
– Laws and regulations might change.

• Cultural
– Every country has different belief, culture
and language.