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Question: Buckley (2011) proposed the concept global factory. What does the concept mean? What are the implications of the concept for international business? If you were to establish a firm of your own, how would you leverage the global factory to develop your firm into a successful international business? Answer: Introduction The concept of the Global factory was first penned by Peter Buckley. According to him, the concept of the global factory originated due to the initiation of the globalization in the recent time. The concept of the global factory is same as any other organization or company but their operations are not limited to the national boundaries of their home country (Buckley 2011). On the other hand, global factory operates as the global entity with considering the demand and requirement of the global market. In accordance to this, the operational facilities of the global factory divided into different parts and are scattered in different locations around the world. According to the Peter Buckley, the majority of the operations of the global factory are being done by the third party vendors without having own facilities. For instance, research and development and distribution and sales are being outsourced to the contractors and they are located in different countries around the world based on the resources available in those countries (Buckley 2011). Thus, global factories source their raw materials from different areas around the world in minimal cost available and market their products on a global basis. Implications of global factory on international business The global factory is having both positive and negative implications for the international business. The following sections will discuss those. One of the key positive implications of the global factory is a determination of the taste and preference pattern of different markets around the world. This is due to the reason that, as discussed earlier, the global factory is having their operational facilities scattered around the world (Buckley and Strange 2015). They are able to identify the needs and requirement of the different markets around the world. Thus, the process of international business becomes more effective with the efficient determination and identification of the need from different parts around the world and offering products in accordance to that. Another positive implication of global factory is regulation of the cost of the international business. As discussed earlier, the global factory is having their facilities around the world. Moreover, the facilities are being built based on the resources available in the particular country. For instance, countries with having the more advanced technology and access to latest technological infrastructure are being chosen for the research and development and the countries with having a lower cost of human resources are being chosen for manufacturing facilities (Eriksson, Nummela and Saarenketo 2014). Thus, this helps in regulating the cost of the international business. Moreover, due to the sourcing of the materials at minimal cost, it is more helpful for the global factory to offer products at more affordable cost. Apart from the positive implications, there are few negative implications also of the global factory. One of the key negative implications is the difficulty in adhering to the difference in the regulations and legislation in different countries. In the current global scenario, countries are having different political system along with having the different and diverse set of regulations and legislation for the business organizations to follow (Dahlgaard et al. 2013). Moreover, international diplomatic relations between the countries are fluctuating in nature. Thus, it is difficult and challenging for the global factory to comply with all these differences. They are having their facilities in different countries and thus, they have to face the diversity of regulations and fluctuation political factors. The concept of the global factory is to market global products in different regions around the world. However, the need and requirement in different countries are different and diverse. Thus, in some cases, it becomes difficult to meet the requirements of all the marks with the universal products (Stahl and Tung 2015). In that case, the international business faces the difficulty of not having the expected market potentiality for the particular product. Leveraging the concept of global factory in developing international business One of the key steps will be to have the manufacturing facilities in the developing countries such as India and China. This is due to the reason that, these developing countries are having more growth rate compared to the developed countries (Farooki and Kaplinsky 2013). Moreover, India and China are having the lowest cost of human resources along with favorable business infrastructure. Thus, the costs of production will be lower. Facilities will be less scattered in order to face fewer difficulties in adhering to different regulations. This will also help in reducing the cost involved in managing the facilities in more countries along with having more effective management. Thus, lean production and management will be initiated in the organization, which will further enhance the effectiveness of the organization. References Buckley, P.J. and Strange, R., 2015. The governance of the global factory: Location and control of world economic activity. The Academy of Management Perspectives, 29(2), pp.237-249. Buckley, P.J., 2011. International integration and coordination in the global factory. Management International Review, 51(2), p.269. Dahlgaard, J.J., Chen, C.K., Jang, J.Y., Banegas, L.A. and Dahlgaard-Park, S.M., 2013. Business excellence models: Limitations, reflections and further development. Total Quality Management Business Excellence, 24(5-6), pp.519-538. Eriksson, T., Nummela, N. and Saarenketo, S., 2014. Dynamic capability in a small global factory. International business review, 23(1), pp.169-180. Farooki, M. and Kaplinsky, R., 2013. The impact of China on global commodity prices: The global reshaping of the resource sector (Vol. 57). Routledge. Stahl, G.K. and Tung, R.L., 2015. Towards a more balanced treatment of culture in international business studies: The need for positive cross-cultural scholarship. Journal of International Business Studies, 46(4), pp.391-414.