Unit 3 Activity 4

Access to New Markets

Globalization allows businesses to access markets that were previously impossible to access. Customers from all over the world may order things from companies all over the world and have them delivered by plane in only a few weeks thanks to the internet. This is obviously a huge benefit for firms, since reaching out to international shoppers can potentially boost their customer base by millions.

Access to Labor at Cheaper Prices

When multinational firms and globalization are combined, a business might have access to low-cost labor. Businesses can hire personnel in foreign nations where labor and real estate costs are lower than in their native country through outsourcing and offshoring. While these tactics may have a negative impact on workers looking for full-time work, there is no doubt that they lower expenses for corporations and hence improve profits.

Opportunities for Tax Reduction

When their current country adopts an unfavorable tax policy, multinational businesses might seek out foreign countries for their investments thanks to globalization. Low corporate tax rates are referred to as "tax havens" because they allow businesses and individuals to reduce their tax bills by shifting assets offshore. Bermuda, Belize, and Switzerland are among these countries. All of this is made possible by the worldwide financial framework, which is made up of encrypted information systems and confidential documents.

Minimize Costs Through Partnership Formation

Globalization has allowed companies to develop collaborations with organizations all over the world. Many multinational corporations from the United States, Europe, and Asia have formed cross-continental alliances. For example, Google teamed with LG Electronics of South Korea in 2014 and HTC of Taiwan in 2017 to be able to provide its own line of smartphones, including the Google Pixel. By leveraging the talents of teams all over the world, these partnerships reduce costs while increasing quality.