What is a global value chain?

Global value chain represents different tasks and activities that the company must complete to produce and supply goods to consumers. Traditional value chain activities include the purchase, production, packaging, transport, storage and distribution of goods either internally or through other companies. To complete these activities between international countries, the Global value chain organizations create logistics locations in each country to fulfill the tasks of the value or supply chain. The producer must find a way to move finished goods to areas where consumers want to buy and use these products. The value chain does this because it adds the value of the company's overall production process, as its name suggests. In the last few years and decades, the progress of business technology has enabled companies to compete in International Markets. A global value chain is necessary because most companies do not have aor resources to competition in this process. Outsourcing services to organizations that can complete these activities allow the producer to focus on what is best: create goods or services required by the consumer.

Global value string can be modular, relational or captured. Modular value chains produce goods at consumers' request. This allows the company to achieve a high level of share in the market because consumers will receive the product they want most. Production and/or sale of goods on international markets will often be led by companies to use the most general machines to satisfy the wide demand of customers in many markets.

relational values ​​chains rely on multiple companies in performing tasks and activities. For example, a widget manufacturer may need two pounds of steel to a prokil formed unit. While domestic production facilities have access to the local toyRNY on steel while international location does not have to. The global value chain will therefore rely on localized industries - composed of large and small companies - to help complete the processes within the organization.

The results of the captured value chain when small companies rely on larger organizations in the chain. The leading company can then dictate prices and services in the local industry. The global value chain can result in fighting power when a larger domestic company attempts to control the chain, including several smaller international suppliers. Although the use of international suppliers may mean lower cost of goods in the value chain, companies may experience resistance from consumers for unfair business practices.