In a short essay, describe the steps a company takes in going global

What will be an ideal response?

Answer: The first step in going global is some sort of outsourcing in which a company buys materials or labor or both from a foreign source. For example, a shoe company might outsource its manufacturing to a country in which labor is not as expensive as in its home country.

After outsourcing, exporting and importing is likely to follow. For example, the shoe company may now begin to sell its shoes in foreign markets. It may also begin to import lines of specialty shoes to sell in its domestic stores. A larger commitment than exporting and importing involves licensing–selling the rights to make a product overseas–or franchising–selling the right to run a whole operation overseas.

The third step in going global involves setting up strategic alliances–partnerships with foreign companies–and joint ventures–special partnerships in which a new company is formed to create a specific product. A shoe company might do this by setting up a partnership with a foreign leather company to produce handbags.

The final step in going global is to set up a foreign subsidiary–a branch of the company's operation that will set up shop in the foreign location. In this case, the shoe company might build an entire shoe factory in a foreign location and hire local managers to run it.