Impact of Monetary Drivers on a Global Firm

Published: 2019-12-10 08:00:00
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Marfrig Global Foods S.A. is a company that deals with the processing and distribution of meat products including lamb, beef, pork and poultry. This company has customers in Brazil where its headquarters are located as well as in Europe, Russia, Oceania, America, and the Middle East. The global operating presence of this company means that it is able to minimize its risks by beating competition which is still growing in this business.

There are various factors that affect the global market including: the political atmosphere, global security risks, technology and trade and investment barriers. Going into a new market means that a company has analyzed that market and seen its potential in terms of increasing its revenues. In the swot analysis for Marfrig Global Foods S.A., the company works on the basis of the growing global demand for processed meat and the need to exploit new markets. This also has its challenges including competition, trade barriers and disease outbreaks for cattle. These factors affect the companys profitability and the management has to look into ways that it can go around this.

Change in technology and declining trade and investment barriers are two macro factors that have driven the growth of globalization. The trend today is towards the removal of trade barriers that were initially imposed to protect local companies from foreign competition. With the reduced trade barriers, companies such as Marfrig Global Foods S.A. see the global market as a single market which expands the consumer base thereby increasing the profits for this company. The presence of this organization in 16 countries besides Brazil is evidence of the increased consumer base.

Whereas the effect of lower trade barriers is more theoretical when it comes to explaining the growth of globalization, technology is able to effectively portray this change and make this more tangible. Operating in the global market requires a lot of communication between the headquarters and the overseas offices for purposes of coordination and control. Technology has played a significant role in this through the development of the microprocessor information processing model.

This being a business that involves the transportation of processed foods means that the mode of transport as well as the refrigeration equipment has a great impact on this business. One greatest effect on this is the containerization mechanism which simplified the transfer of the products from one mode of transport to another. Technology has reduced the cost of transportation which makes dispersion of products more economical which enables firms to respond effectively to the needs of the international consumer.

The International Monetary Fund is mandated with maintaining order in the international monetary system. It works with its member countries and helps them to implement sound policies by way of surveillance, lending and offering technical assistance to those countries. By doing this, the IMF ensures that the global economy remains stable. It has to ensure that the policies developed by the member countries do not adversely affect the global market. The policies that each country comes up with should be durable and inclusive. This oversight role has enabled growth of global organizations such as Marfrig Global Foods S.A. by creating a conducive environment for operating in the countries that it has invested in. Through the assistance and evaluation of policies in these countries, the organization feels secure while investing in the IMF member countries.

Reference

Marfrig Global Foods S.A. SWOT Analysis. (2015). Marfrig Global Foods S.A Swot Analysis, 1-8.

sheldon

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