Global markets

Definition

Global markets are international economic systems where companies trade goods, services, and securities across borders. They enable businesses to expand beyond their domestic boundaries and tap into new customer bases worldwide.

5 Must Know Facts For Your Next Test

1. Global markets help companies diversify their revenue streams by entering multiple international markets.
2. Operating in global markets often requires companies to navigate different regulatory environments and cultural practices.
3. Exchange rate fluctuations can impact the profitability of companies operating in global markets.
4. Companies might face increased competition from foreign firms when entering global markets.
5. Global market strategies can include exporting, forming joint ventures, or establishing foreign subsidiaries.

Review Questions

• What are some benefits for a company operating in global markets?
• How do exchange rate fluctuations affect companies in global markets?
• What strategies can businesses use to enter global markets?

Related terms

Foreign Direct Investment (FDI): The investment by a company in the business interests of another country through acquiring assets or establishing business operations.

Exporting:

The sale of goods or services produced in one country to customers in another country.

Joint Venture: A strategic partnership between two or more firms to achieve specific goals while sharing risks and resources.