Contemporary Issues in International Business Assignment - 1

Contemporary Issues in International Business - Assignment Example It should be also noted that the environment in which international businesses operate is briefly explained so that the position and the challenges of global clothing industry to be fully understood. Businesses that operate globally have to face a series of issues. The willingness of investors to support global business initiatives is not standardized. In fact, Foreign Direct Investment (FDI) flows in markets worldwide present high variation, being reduced from time to time, usually because of local political or economic crises.1 FDI has become popular due to the low level of its risks, compared to other internationalization strategies. Justin explains that FDI can be described as ‘the investment in the real assets of a foreign company so that a product is produced or marketed.2During the last five years, FDI shows important downturns probably because of the recession of 2008. The specific fact is reflected in Graph 1 and Graph1a (Appendix) where the changes in FDI globally, both as inflows and outflows, are presented. The recent trends in regard to FDI globally are also presented in Graph 2 (Appendix) where the emphasis is given on the FDI inflows in developing countries. It should be noted that a firm that wishes to secure its position in the global market needs to be able to continuously improve its productivity in order to respond to global competition, which tends to favor the most powerful organizations.  In fact, due to globalization, competition has become stronger not only in the international market but also in local markets.[i] Another issue for international business is the elimination of trade barriers. In practice, it has been proved that trade barriers can significantly threaten the prospects of firms in the global market, either temporarily or permanently.