The rapid industrialization from the 18th century was a consequence of early involvement of merchants and businesses in trade. In the 21st century improved transportation and communications and cross-border business ownership have created, for most industries, a global business environment.
Global competition affects firms in several ways:
It provides the opportunities of new markets to exploit
It presents the threat of new sources of competition in the home economy from foreign firms
It offers an opportunity of relocating parts of business activity (or supply chain) to countries able to perform them better or more cheaply
It may drive cross border acquisitions and alliances
This leads management to make significant strategic investment decisions that rely on assessments of the stability and trends of the global business environment:
Development of products for international markets
Advancing credit to clients in international markets or investing in businesses and assets in host countries
Reliance of international sources for supplies of crucial inputs
