Globalization Impact: Week 13/14 Quiz

Technology accelerates globalization by providing opportunities for new markets on the demand side and cost savings on the supply side. It allows businesses to access new markets, reduce production costs, and improve efficiency through automation and communication technologies.

The challenges of worldwide sourcing include trade balances, currency fluctuations, and documentation requirements such as letters of credit, import licenses, and commercial invoices. However, the benefits include access to technology, quality products, and the introduction of competition to domestic suppliers, as well as the ability to react to competitor buying patterns and establish a global market presence.

International purchasing offices (IPOs) play a vital role in global sourcing by identifying potential suppliers, negotiating supply contracts, obtaining product samples, performing supplier site visits, representing the buyer to suppliers, and managing countertrade requirements. They facilitate the sourcing process and ensure successful international transactions.

The typical international transaction costs include base price, packaging, transportation, payment terms, and taxes, as well as inventory carrying costs. These costs impact businesses by influencing pricing strategies, supply chain management, and overall profitability in global sourcing transactions.

Future trends in global sourcing include the development of higher-level skill sets, continued cost reduction pressures, seeking suppliers with global capabilities, and the need to establish integrated systems. Success factors in global sourcing involve site-based operational control, which ensures efficient and effective sourcing operations for businesses.

FCPA = Foreign Corrupt Practices Act

Import Licenses

Assist in managing counter trade requirements

$IPOs = International Purchasing Offices$

$PAYMENTS TERMS, TAXES, INVENTORY CARRYING COST$