Agriculture Reference
In-Depth Information
Plate 5.1
Lettuce harvest
Global marketers promote branded food and fi ber products in every corner of the world. Photo
courtesy of USDA Natural Resources Conservation Service.
slow, or no, sales growth. A related advantage of serving a larger international market is to
achieve scale economies because of larger production volumes.
Name or
brand recognition
is another benefi t a company works toward in globalization
efforts. Global recognition of corporate logos and brands increases both the effi ciency and
effectiveness of a company's advertising efforts. Brands are very expensive to develop, and
if a fi rm can spread those development costs across a broader market, profi ts can increase.
As a result, many companies competitively vie for sponsorship of world-televised sporting
events. Reinforcement of brand or logo recognition can be a powerful tool in these cases
of sponsorship. For example, in the 2010 soccer World Cup held in South Africa, sponsor
company logos were shown and/or mentioned in more than 97 countries and in numerous
languages on both television, radio and over the internet. Firms like Coca-Cola, PepsiCo,
and McDonald's have brands that are recognized in virtually every country in the world.
Agribusinesses may be able to reduce their overall risk exposure by broadening the
number of markets from which they purchase inputs and sell products because they are not
dependent on a single, local market. Organizations with operations in several countries may
stand to be less affected by slow periods in their domestic market when actively engaged
in business abroad. Sourcing inputs internationally may also signifi cantly lower costs of
production. Such cost advantages allow fi rms to lower prices, giving them an important
advantage.
Global fi rms may also have easier access to credit and gain valuable experience from
operating in other markets. Firms serving international markets can move technology around
