Essay Sample on Globalization and Trade Theory

Introduction

Globalization means doing business internationally both large and small firms with the objective of increasing profit of various firms involved in it. The global aspect offers the opportunity for the sale of different products by small entities; thus most small business might go international if there is a lower turnover for their profits to be realized. However, there is a face of competition from larger firms that make these small firms not to thrive in international business. Therefore some factors majorly contribute to the success of a large firm to thrive in international business rather than experiencing losses that are of minimum wages.

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International business, therefore, offers a lot of pros to the large firms as compared to the small firms with the following elements: it offers product flexibility, less competition, products from Events and National trends, learn of new techniques, and cost advantage. The aspect of creating more flexibility for the [products helps the large firms to change on their products with any changes that may occur in international business; thus most organizations are encouraged to enhance product differentiation. The presence of products flexibility mainly helps the larger firms in global business to bring in more customers since they differentiate their products as per their customers' requirements and specifications.

International business favors large firms on the aspect of less competition in the sell of the product and the brand. Most of U.S firms have advanced in international business with the perspective of reducing competition in their local market thus posing a lot of advantages to the players present in their nation. Less competition for most firms works best for the large enterprise as compared to the small enterprises since the competitive advantage gained by a large company is comparatively large as compared to those influencing small companies. The other factor is on protection from international events and trends that primarily affect the small business (Publishing, O. E. C. D., & Organization for Economic Co-operation and Development Secretary-General,.2011).

The international business helps the large firms in focusing on the sales of other parts of the world thus increasing their profit maximization. The learning of new techniques through advancements of international business helps the large companies to boost their methods of doing business thus thriving more in the international business. The exposure of new technologies and the methods of doing business offer a suitable platform for the business to be carried out in a more advanced nature. It is expected that when you run a business in the different nation, there is a lot to learn from that countries business and advancements, therefore, posing a lot of advantages to the large firms that have high sales as compared to the small business which has fewer sales in the penetration of the market.

The aspect of cost advantage occurs on the exportation of products to the outside nations. The cost of production for example for a country like China uses less cost on output due to its large firms getting no exportation coats. The equipment of large firms has their rates being the same to most countries thus saving on their labor expenses, for example, China firms. The rates for the international business are less for large firms as compared to small firms; therefore there is a more significant impact on the creation of more benefits to the international business. Conclusively, the advantages posed to large firms by international business are more as compared to the pros posed to the small firms due to the different benefits of doing business internationally as compared to the local markets of various nations.

Reference

Publishing, O. E. C. D., & Organisation for Economic Co-operation and Development Secretary-General, (2011). Globalization, Comparative Advantage and the Changing Dynamics of Trade. Paris: OECD Publishing.