Firms that compete in the global marketplace typically face two types of competitive pressures.They face pressures for cost reductions and:

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Global firms face pressures for cost reductions as they must keep their prices competitive in the global market. However, they also face pressures to be locally responsive, as different regions and cultures have unique preferences and regulations. Thus, firms must balance the need for cost reductions with the need for tailoring their products and services to local markets. Pressures for volume increases and price reductions are related to cost reductions and may not always be applicable. Political savvy may be important in some cases, but it is not a primary competitive pressure.

Firms That Compete in the Global Marketplace Typically Face Two