The paper "Hilfiger Merchandise and Internalisation" is a wonderful example of an assignment on macro and microeconomics. Globalization has presented new avenues in which an organization can maximize sales and profits. Hilfiger's decision to expand globally ensures that depressed sales in the local market can be mitigated through selling the merchandise in a global environment (Hitt, Ireland, and Hoskisson, 2010). International markets provide Hilfiger with the opportunity of higher sales if the local market is slow or during the low season (Thomas, 2010). Differentiate economic environments mean that Hilfiger can utilize revenues from high season regions to complement regions that are low season (Manlow, 2011).
For example, Hilfiger merchandise that does well in the United States during the summer period may also mean that such merchandise can do better in the Australian market when similar conditions are experienced. Going to the global market by Hilfiger means they can gain competitive knowledge and competitive ideas. Participating in international and overseas markets provides invaluable information and know-how in ensuring the business operates optimally. Hilfiger may utilize international markets to be incubators for new merchandise, which in term may become a big hit.
Participating in different international markets means that the acceleration of ideas is achieved ensuring that new merchandise, which is suitable for a given environment can be produced (Hitt, Ireland and Hoskisson, 2010). Therefore, competitive knowledge and ideas ensure that Hilfiger can operate successfully, and are able to access appropriate information easily that can be utilized in ensuring the business is sustainable in the long run. Moreover, participation in different international markets provides a platform for achieving economies of scale. When Hilfiger international exports increase, it means it is easier to spread fixed costs over a larger production area (Thomas, 2010).
Such a strategy ensures the reduction of unit costs, which will translate to more profits for the organization. In addition, raw materials can be accessed from different regions meaning that the price of raw materials can suit the different environments and also reduce the cost of producing the merchandise (Hitt, Ireland and Hoskisson, 2010).
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