Вопрос № 223998 - Английский язык

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International trade means there are more companies competing with each other to sell their products. This means lower prices, which is good for customers because they pay less and have more choice. Producers, however, make less profit. Multinational companies often look for ways to reduce their costs, for example, by manufacturing their products in countries where labour costs are cheap.

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Many companies set up subsidiaries overseas, either for manufacturing or for distribution, or both. These companies are called multinationals – Shell, Ford, and Sony are examples. Most multinational companies “think global and act local”. This means that they try to understand and cater for the needs of every market they sell in.

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Changes in the exchange rate can make a company more or less competitive. The exchange rate is the amount of one currency needed to buy another currency. For example, in 2002, one British pound bought about 200 Japanese yen, so the exchange rate was 1:200. If the exchange rate falls, exports become cheaper, so companies become more competitive. If the exchange rate rises, exports become more expensive, so companies become less competitive.

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Countries export some products and import others because sometimes it is cheaper to buy than to produce. There is warm climate and much vegetation in Australia. This is very good for sheep-breeding, and Australia exports much high-quality wool. Taiwan has many skilled technicians and so it produces radios, television sets and other electronic products for export. Canada’s climate is good for wheat, and Argentina is a low-cost producer of meat. Canada ships its wheat to Argentina and Argentina sells its meat to Canada. Both countries profit by these import-export transactions. Very few countries do not take part in international business.

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Companies that want greater control over their product have to manufacture it at home and then export it to the foreign countries. In this case exporters must examine the market. Some firms can sell their products to an export\import merchant, who takes all the selling risks. In other cases the company may use an export\import agent who sells the products to wholesalers or retailers in the foreign country. Sometimes the exporter may set up its own sales offices and branches abroad. This is more expensive and only large firms can afford it.

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To go international a large firm can set up a joint venture with a company in another country. In this case two companies pool their resources to design, manufacture and sell the product. Both firms profit by the results of this arrangement. They also share responsibility. One of the firms provides the necessary funds and know-how for producing goods. In return it gets a foothold in the foreign market. The other firm obtains financial aid and technical assistance. And it takes responsibility for handling red tape and organizing sales in the local market.