The Might of American Companies: A Review
Dr. Tanvir Orakzai
May 12, 2006
According to a former French foreign minister, America?s power lies in its ability to ?inspire dreams and desires? due to its eternal presence in media all around the world. In an interconnected world, America more than any other country has acquired status of an empire, turning the world towards American ways. Some reason American military might and others consider its media the real power, however it?s the American businesses, which have changed the world enormously in the last 100 years.
American companies are doing not just business, but they have made America a world economic power. A slight depreciation in dollar or energy in US; and the whole world can feel pinch of this impact. In a global economy, American companies are reaching out to the consumers exploiting markets; be it China or Latin America or Japan or African countries, US companies are the force to reckon with..
Today American brands dominate the business models around the globe. Out of 100 famous brands, 62 are American, which is about 62 percent of the well-known brands. American companies contribute to the one third of the world economic output, companies like Coca-Cola, MacDonald, Apple, IBM, and Microsoft have not only created wealth and jobs at home, but they have also created countless jobs overseas increasing American power and influence.
American companies deliver their products in two ways: exports and over seas investment. These practices are popular ways of US companies to have their presence in the global business making them connected to many world economies. American firms compete more through foreign direct investment and establish by being on the ground. In simple words, the American firms global engagement is through manufacturing and selling, such as General Motors manufacturing in Germany, Intel integration in Ireland, Wal-Mart manufacturing in Jordan, Eastman Kodak competing Fuji in China and capturing sales in Latin America. It is no surprise that during the economic crisis of Mexico in 1995 and Asian crisis in 1997, US companies felt the impact, yet not as much as anticipated. Even during the crisis American (FDI) was relatively stable due to several inherent superior measures taken by these companies.
The US companies are the leading exporters in the world. American companies accounted for the fifty percent of the semiconductor manufacturing in 2005.According to WTO report, the US exports and commercial activities, such as semi-conductors, computers, vehicle spare parts, and pharmaceutical products reached US$1.01 trillion in 2003. From 1994 to 2003, US FDI (foreign direct investment) reached US$1.3 trillion, bringing new technologies and managerial skills to developing countries. In fact the US companies are engine of global growth, without them, the world economy can become stagnant.
During the Great Depression of 1930s US government intervened and strengthen the economy by spending enormously on restructuring the economy slashing down the taxes, allowing consumers to spend, thereby generated rapid economic growth. In the 1960s US government regulated over all economic activity, controlling the inflation and allowing the consumer spending. US economy in 1980s grew with a growth rate of 9 percent till 1990s. By 1999 American companies made up 20 percent of global high tech manufacturing products. In 2001, US companies high- tech output reached 32 percent of global market share. Similarly since 1997, US is also leading supplier of computers overtaking Japan and Germany, which were global leader since 1980s. Since 1980s, US firms had 57 percent of the aerospace industry share, which dwindled to 52 percent in 1989 and 44 percent in 1995. From 1980 through 2001, the American companies were producing the leading scientific instruments.
The term globalization refers to a view that the world should open their markets that was pursued by US treasury, IMF and World Bank in the 1990s. According to this view, opening up of markets will create equality and prosperity. Globalization has given rise to the market capitalism contributing to American economy, creating new jobs and money from Malaysia to Cambodia, narrowing the gulf between the rich poor and connecting people globally. After 1997 US economy being dependent on FDI went into recession due to the economic crisis in Thailand, South Korea, and Indonesia, slowing the pace of US economic growth. For corporate American, the Asian shocks were mild, still US Federal Reserve Board intervened and lowered interest three times to ease the strain, allowing the companies to flourish in the coming years. In recent times Asia is becoming the new frontier of market exploitation and a champion of growth, corporate American is seeking business in this region. The main reason for American firms to exploit South East Asian market (including China) is that the region has fastest growing economies in the world. By 1998 and 1999 American economy grew by four percent, a rather slow pace and the same year American companies first time opened its business with European partners, thus American business went west instead of east.
Today things are changing for America for several reasons. The foremost reason is its trade deficit that is rising due to an unpopular war in Iraq. The politics is giving rise to globally resistance of American products and companies. American economy is held by investment and capital, since September 2001, US is losing FDI flow due to China and other markets in the Asia. In Europe, America companies have met with tough resistance after the invasion of Iraq; the sense of nationalism has grown around the world, especially in the Middle East. The consumers are not buying American products, since President Bush has announced to export American values; which people around the world consider an invasion on their culture.
US also have competitors, such as China and India, Asian Tigers that developed more quickly than US anticipated. The Chinese and Indian products are flooding the local and European markets making business tough for American companies. However US is still economic leader; business is not only about cheap labour, its also about skill and management and operation, in which America is decades ahead of its competitors. Today economies are knowledge based; the world top six information technology companies are located in America. America role is changing from just being a lead producer to an innovative leader creating new businesses and products. America today is the sole superpower that is interwoven with its economic role. The challenge for American businesses is to face a serious competition in changing world and come up with new ideas and innovation to lead the world economy.
American companies are doing not just business, but they have made America a world economic power. A slight depreciation in dollar or energy in US; and the whole world can feel pinch of this impact. In a global economy, American companies are reaching out to the consumers exploiting markets; be it China or Latin America or Japan or African countries, US companies are the force to reckon with..
Today American brands dominate the business models around the globe. Out of 100 famous brands, 62 are American, which is about 62 percent of the well-known brands. American companies contribute to the one third of the world economic output, companies like Coca-Cola, MacDonald, Apple, IBM, and Microsoft have not only created wealth and jobs at home, but they have also created countless jobs overseas increasing American power and influence.
American companies deliver their products in two ways: exports and over seas investment. These practices are popular ways of US companies to have their presence in the global business making them connected to many world economies. American firms compete more through foreign direct investment and establish by being on the ground. In simple words, the American firms global engagement is through manufacturing and selling, such as General Motors manufacturing in Germany, Intel integration in Ireland, Wal-Mart manufacturing in Jordan, Eastman Kodak competing Fuji in China and capturing sales in Latin America. It is no surprise that during the economic crisis of Mexico in 1995 and Asian crisis in 1997, US companies felt the impact, yet not as much as anticipated. Even during the crisis American (FDI) was relatively stable due to several inherent superior measures taken by these companies.
The US companies are the leading exporters in the world. American companies accounted for the fifty percent of the semiconductor manufacturing in 2005.According to WTO report, the US exports and commercial activities, such as semi-conductors, computers, vehicle spare parts, and pharmaceutical products reached US$1.01 trillion in 2003. From 1994 to 2003, US FDI (foreign direct investment) reached US$1.3 trillion, bringing new technologies and managerial skills to developing countries. In fact the US companies are engine of global growth, without them, the world economy can become stagnant.
During the Great Depression of 1930s US government intervened and strengthen the economy by spending enormously on restructuring the economy slashing down the taxes, allowing consumers to spend, thereby generated rapid economic growth. In the 1960s US government regulated over all economic activity, controlling the inflation and allowing the consumer spending. US economy in 1980s grew with a growth rate of 9 percent till 1990s. By 1999 American companies made up 20 percent of global high tech manufacturing products. In 2001, US companies high- tech output reached 32 percent of global market share. Similarly since 1997, US is also leading supplier of computers overtaking Japan and Germany, which were global leader since 1980s. Since 1980s, US firms had 57 percent of the aerospace industry share, which dwindled to 52 percent in 1989 and 44 percent in 1995. From 1980 through 2001, the American companies were producing the leading scientific instruments.
The term globalization refers to a view that the world should open their markets that was pursued by US treasury, IMF and World Bank in the 1990s. According to this view, opening up of markets will create equality and prosperity. Globalization has given rise to the market capitalism contributing to American economy, creating new jobs and money from Malaysia to Cambodia, narrowing the gulf between the rich poor and connecting people globally. After 1997 US economy being dependent on FDI went into recession due to the economic crisis in Thailand, South Korea, and Indonesia, slowing the pace of US economic growth. For corporate American, the Asian shocks were mild, still US Federal Reserve Board intervened and lowered interest three times to ease the strain, allowing the companies to flourish in the coming years. In recent times Asia is becoming the new frontier of market exploitation and a champion of growth, corporate American is seeking business in this region. The main reason for American firms to exploit South East Asian market (including China) is that the region has fastest growing economies in the world. By 1998 and 1999 American economy grew by four percent, a rather slow pace and the same year American companies first time opened its business with European partners, thus American business went west instead of east.
Today things are changing for America for several reasons. The foremost reason is its trade deficit that is rising due to an unpopular war in Iraq. The politics is giving rise to globally resistance of American products and companies. American economy is held by investment and capital, since September 2001, US is losing FDI flow due to China and other markets in the Asia. In Europe, America companies have met with tough resistance after the invasion of Iraq; the sense of nationalism has grown around the world, especially in the Middle East. The consumers are not buying American products, since President Bush has announced to export American values; which people around the world consider an invasion on their culture.
US also have competitors, such as China and India, Asian Tigers that developed more quickly than US anticipated. The Chinese and Indian products are flooding the local and European markets making business tough for American companies. However US is still economic leader; business is not only about cheap labour, its also about skill and management and operation, in which America is decades ahead of its competitors. Today economies are knowledge based; the world top six information technology companies are located in America. America role is changing from just being a lead producer to an innovative leader creating new businesses and products. America today is the sole superpower that is interwoven with its economic role. The challenge for American businesses is to face a serious competition in changing world and come up with new ideas and innovation to lead the world economy.
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