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The Challenges Faced by International Business

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This article examines how the environment affects and creates conditions for either the success or failure of business organizations and how it operates to demand effective strategic thinking on the part of decision-makers if businesses are to survive and thrive.

Take the classic example of Mark & Spencer PLC, which began in 1894 as a single high street store owned by two men, selling all items said to be costing no more than a penny to the customer. Over the years it conquered the retail sector with branches in prime locations all over the UK, and in overseas territories, totalling more than 885 stores. Not only did Marks & Spencer evolve into the giant corporation which it is today by reading the changes in the environment well, and meeting the growing needs of more and more affluent consumers, it also influenced the shopping habits of its clients. The business firm is not a faceless entity; at best, it can be an icon of social and economic progress, and at worst become vanquished by its inability to read the environment, Woolworths and MFI being two recent examples of such failure.

How the environment impacts on the fortunes of the business firm is nowhere more evident than in the collapse of many business enterprises including financial institutions (e.g.banks) in the current worldwide economic downturn. Even starker is the effect of continuing bad weather either in the form of floods or snow on the viability of a whole range of firms in the UK. Had the environment represented by the UK government not provided a lifeline to some of the major banks in the form of taxpayer subsidies, or buy-outs, they would not have survived. Different political ideologies at different times affect the business enterprise in different ways. The collapse of communism and the breaking down of the Berlin wall in 1989, coupled with the Internet phenomenon resulted in the abolition of legislation preventing global communication and industrialisation. Since then there has been a plethora of international mergers, acquisitions and alliances which saw transnational corporations (TNCs) grow in size and economic power as never seen before. Denning (1993) has identified the interaction between ownership advantage (OA) brought by the TNC and the location advantage (LA) of the countries where TNCs seek to invest. Researchera identified synergies sought by TNCs in foreign direct investment (FDI) as being motivated by strategies for market seeking (MA), efficiency seeking (ES), and knowledge seeking (KS) respectively, depending on their reading of the business environment.

Before going any deeper, it is necessary to take stock of what is meant by the business firm, and what its objectives are, and proceed to analyse the process and effects of this rapid globalisation. A business firm is a legal entity. Unlike a sole trader, or partnership, it is required to be incorporated with rules and objectives that are documented. It may be capitalised with borrowings or by shareholder contributions. While the shareholders own the enterprise and have claims to sharing the profits, it may be managed day-to-day by paid employees. The objective of the firm is ‘to maximise its value to its shareholders’ (Van Horne, 1974). Historically, ‘maximisation of profits is regarded as the proper objective of the firm, but it is not as inclusive a goal as that of maximising shareholder wealth’ (op. cit.). There are difficulties even in this conceptualization where ‘maximising market price per share’ is preferred by some to ‘maximisation of earnings per share’ (op. cit.).

A business firm currently in the news is Blacks Leisure, which was on the verge of bankruptcy, when the current adverse weather conditions improved its fortunes by providing a market for its thermal wear products. Now it is planning to expand further. Meanwhile the adverse economic environment has encouraged Poundland offering cheap goods to fill the gap left by Woolworth’s demise. The British salt manufacturing firm Ineos Enterprises chose to cancel a 12, 000 ton shipment of industrial salt promised to Germany, diverting the stock to local authorities in the UK in dire need of supplies to grit roads covered by snow. It is a good example of the environment influencing decision makers of private firms to act in a socially responsible manner. This upholds Van Horne’s (1974) assertion that even at the risk of not maximising shareholder wealth in the short term, management of business firms ought not to ignore the need for ‘social responsibility’ which brings long term benefits although perhaps not immediately apparent.

As related to business firms, social responsibility concerns such things as protecting the consumer, paying fair wages to employees, maintaining fair hiring practices, supporting education, and becoming actively involved in environmental issues like clean air and water… However, the criteria for social responsibility are not clearly defined, making formulation of a consistent objective function difficult’ (op. cit.).

It is now generally understood that a business does not, and cannot function in a vacuum. It has to react to events occurring outside its factory and office walls. The very first concern should be a close awareness of competitors’ strengths and weaknesses vis-a-vis its products and services. Additionally, most analysts require awareness of the environment in terms of political, social, economic and technological factors which impinge on the business firm.

Other analysts have expanded these to: Political – how changes in government policy could affect decision making in the firm. For example, the UK government’s concern over clean energy has resulted in a decision to invite foreign firms to bid for the supply of offshore windmills over the next several years. Not only do the windmill suppliers but also a host of firms required to supply ancillary products and services could take advantage of this decision. Social – how consumers beliefs and interests change over time. An example is the changing demography of many more senior citizens being present in the population and concerns over their health. Economic – how taxation, (e.g. tax holidays), interest rates, exchange rates, and the ‘credit crunch’ affect individual firms. Technological – how product innovations, and new technology like the proliferation of mobile phones, (iPads), change consumer preferences. Legal – how changes in law, enforcing of minimum wages, and regulating working hours, affect business. Last, but not least are the Ethical concerns that underpin social responsibility issues. An example is the refusal to trade with regimes known to contravene human rights legislation. All these factors influence to change markets which businesses need to take into account and respond to, if they are not to lose market share and jeopardise their long term viability.

A business firm, although incorporated by law as an entity is by no means monolithic. More than its shareholders, it has other stakeholders with different, if not competing objectives and interests within its ambit. Starting with the managers, there are other employees who may, or may not be trades union members, along with the community where it is situated, and which it serves, having to take into account local authority strictures on waste disposal and other similar regulations.

Discussing foreign direct investment (FDI) of transnational corporations, Robert Pearce defines the global business environment as ‘the environment in different sovereign countries, with factors exogenous to the home environment of the organization, influencing decision making in resource use and capabilities. This includes social, political, economic, regulatory, tax, cultural, legal and technological environments’. Pearce accepts that business firms do not have any direct control over this environment, but that their success depends on how well they adapt to this environment. As seen earlier in the case of Blacks Leisure and Poundland, a firm’s ‘ability to design and adjust its internal variables to take advantage of opportunities offered by the external environment, and its ability to control threats posed by the same environment determine its success’ (op. cit.).

Firms also take advantage of savings offered by outsourcing. Careful consideration of the variables of communication networks, cultural compatibility and reliability, needs to be addressed. There are offshore development centres which offer call centre provision and other web related customised professional services with appropriate infrastructure support.

How an American firm adapted to cultural diversity in France is discussed by Daniel Workman (2008). He says that the Euro Disneyland, a ‘transplanted American theme park’ near Paris had lost $34 million over the first six months since it opened in April 1992. Even before it opened there was strong local opposition that it threatened French cultural sensitivities. A strict employee dress code and the outlawing of wine in the park, among other things, angered the Parisians. Eisner, the CEO of the parent company in Florida commented: “What we have created in France is the biggest private investment in a foreign country by an American company ever. And it’s going to pay off”. Workman avers that ‘Eisner has since learned to recognize French cultural traditions and quality of life, rather than focus exclusively on American business interests, revenues and earnings at the expense of the underlying French culture'(op. cit.).

Disney found that the first American CEO of Euro Disneyland even with the capacity to speak fluent French, with a French wife, and a recipient of awards from the French government was still unable to make it a going concern. It was only after Disney replaced him and 23 American-born senior managers with local staff, that Euro Disneyland began to make profits.

Banning wine in a country which believes that ‘a meal without wine is like a day without sunshine’, made Euro Disneyland an unwelcome proposition even before it started. American-style hot dog carts were not attractive to a populace famed for its culinary and gastronomic sophistication. Later deciding to use French language rather than English, was also a more than reasonable accommodation made by Disney. It was one of the essential components of its later success.

Cultural encoding also requires that the Americans respect the more feminine French culture’s dominant need for a friendly atmosphere, cooperation, low stress levels and group decision-making instead of focusing exclusively on money and materialistic success (Workman, 2008).

Another aspect of business life is the support (or its absence) from the state as an unavoidable component of the business environment. Like most developed countries, Canada provides government funding to business firms seeking to expand into international markets. The government body responsible is the Small Business Finance Centre (SBFC). The funding is in the form of grants and loans which could be between $1500 and $10 million. Success stories abound. A $34,500 grant enabled a Winnipeg firm, K9 Storm Limited to export body armour for police dogs to 12 countries, in North America and Europe. Another Winnipeg company, Airport Technologies received $12, 500 to develop a snow plough called ‘Snow Mauler’ now being exported to the USA. The most successful has been the Garrison Guitar Works of St. John’s, Newfoundland, which received a grant of $250,000 to develop five guitar prototypes, and now, as a multi-million dollar company exports 20,000 guitars a year to 29 countries. They also own 350 retail stores in North America.

An interest free loan of $8700 enabled Keith Longmire (Nova Scotia) to develop his hand-painted birdhouses enterprise to establish itself in the US marketplace, while Domaine Pinnacle (Quebec) received a $300,000 loan to fund equipment to ferment high-quality apple cider and achieve sales of over $1 million a year. Meanwhile, Agribiotics of Cambridge, Ontario, was awarded a $44,570 loan to develop a vaccine to protect corn from pests and win a contract from the University of Wisconsin. The Canadian government also helps individual firms with their business plans as a precursor to obtaining a grant or loan (Workman, 2008).

In an earlier paragraph this essay introduced the idea of foreign direct investment (FDI). This stood at $14 billion in 1970 ‘but increased over 140 times to almost $2,000 billion by 2007. A large part of the upsurge in global FDI has been due to mergers and acquisitions (M&As). It is these cross-border mergers and acquisitions which have deepened the economic integration of developing Asia with the global economy. Researchers investigating the increasing M&A activity in this region decided that financial variables in terms of liquidity in the source country and the perception of risk (environment) influenced the level of cross-border transactions. They also conclude that the ongoing global financial crisis is likely to sharply curtail the extent of cross-border M&A transactions although this is not entirely proven.

Analysts hypothesised five ‘waves’ of M&A activity in the past. These waves occurred during periods of economic downturn. Currently, a ‘sixth wave’ is recognised with China, India and Brazil emerging as global players in trade and industry. One of the main reasons for M&A activity to be at its height in a recession could be the rapid drop in the stock value of target companies. A major factor in the increase in global outward foreign direct investment (FDI) stock increasing from $150 million in the early 1990s to $1200 million in 2000 may have been due to the above factor. However, it is not possible to generalise when one saw the attempts at a hostile takeover of the UK firm Cadburys by the US firm Krafts and its final, more amicable outcome. Cadburys was far from being a struggling firm. Its share price was holding up and its asset value had not in any way decreased before the takeover attempt.

A recent United Nations Conference on Trade and Industry (UNCTAD) report stated that 29 of the world’s largest economic giants are transnational corporations (TNCs). The annual value-added business performance of the 100 biggest TNCs exceeded that of some nation states. How the rise of TNCs transformed world trade over the last 30 years can be seen from the following statistics. In 1970 there were about 7000 non-financial TNCs investing directly in other developed or developing countries. By 1992 there were 37,000 with 170,000 foreign affiliates. The latter accounted for $11 trillion worth of output. Against this, the total world trade amounted to only $7 trillion.

An important variable in the success of transnational corporations, mergers and acquisitions is the facility with which managers, employees and customers with differing linguistic backgrounds communicate with each other. The total number of languages spoken around the world has been estimated at 6913. This is the reality of the language environment. However, there are two ways by which the language problem has been addressed. One can establish a common language for business, the most widely spoken international language being English. Although numerically more people in the world speak Chinese (Mandarin), it is confined to the People’s Republic of China whereas English is used in countries as far apart as New Zealand, Australia, South Africa, USA, Canada, UK and almost all Commonwealth countries.

Increasingly however, there are language intermediaries who could be engaged to conduct business in the local language. The volume of the global language service industry is estimated to be somewhere around $12 billion and handling around 500 million pages of translation and localization every year. An example of a language services provider of this type is Lionbridge with ’50 offices, $375 million revenue and about 4000 people on its payroll’. Specialised software products such as ‘recycling the translators’ knowledge-base (called translation memory)’ are among many new developments in the language translation industry (op. cit.).

Another reason for keeping up to date with changes in the environment is that a business firm’s operational effectiveness can be jeopardised by not paying heed to such changes. ‘Due to the rapid diffusion of best practice, a productivity barrier is soon reached… Japanese car firms… dominated in the 1970s and 1980s… Lack of a strategic perspective has since held them back while other Japanese businesses like Sony and Cannon flourish (because they) did not sit back with a ready formulated strategy that worked in the past, but revised their strategic thinking taking into account the changing realities of world trade. Obviously, their resource base and mix would have had to alter, and continue to change in the light of changing circumstances.

Writing about mergers and acquisitions Robert Heller contends that buying another business is the easiest task for management in most businesses. However, more things can go wrong in hasty acquisitions as has been proved in the literature. Here too, it is strategy and continuous scanning of the environment and competition which can ensure success. Heller talks of the need to achieve ‘superior organic growth’ once the merger has been accomplished. His answer to how this is to be achieved is to have a ‘visionary’ at the helm. Neither the conservative who wants to retain the status quo, nor the pragmatist who wants change but relies only on those tried and tested somewhere else, can succeed. Only the visionary, often battling against the odds, (could) drive the company into the future.

Heller explains why the Silicon Valley companies have enjoyed acquisition success far beyond the norm.The buys, have been slotted into a receptive culture, in which new ideas are the currency and visionaries dominate -led by a visionary chief executive who has delegated all operating duties to others.

The permeability of the firm to the increasingly global business environment has been demonstrated with examples, throughout this essay. Vision and strategic choice determine the ever changing nature of viable and successful enterprises. A final example below should convince even the most sceptical of the truth of the above conclusion.

United Technologies Corporation is America’s 20th largest manufacturer and the 43rd largest US Corporation according to Fortune 500 list (2006) with 215,000 employees. UTC makes Otis lifts, Carrier heating and air conditioning, Hamilton Sunstrand aerospace and industrial systems, Sikorsky helicopters, Pratt and Whitney jet engines, and Chubb security systems. UTC has thousands of branch offices throughout the world. Internet and IT is the key to UTC’s success. It is obvious that the UTC chief executive’s command over the organization’s resources around the world accounts for its superior productivity and competitive advantage. But it is equally clear that his control over resources is the result of well-thought out strategic decision-making of someone in close touch with the realities of business in the 21st century.

References

Denning, J. (1993) Multinational Enterprises and the Global Economy. Wokingham, Addison-Wesley.

Van Horne J.C. (1974) Financial Management and Policy. Prentice-Hall.

Workman, D. (2008) Disneyland Resort Paris Lessons; American Management Adapts to Cultural Diversity in France.quoted in ‘Boss is the King of Cool’ (The Sunday Times, 18th March 2009).

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Source by Migel Jayasinghe

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Where to Find Those Efficient and Hardworking Affiliates?

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Everyone wants a hardworking affiliate, employee, associate, partner, or even spouse, and why not? It’s the next best thing to doing the work yourself. However with the massive outbreak of work and income opportunities available online, how can you beat everyone else and find that one (or more) ideal person who will make your online business explode with success? Here are some of the most ingenious and uncommon ways to snag the idea affiliates for your affiliate program

Direct Sales Agents

Direct sales people are really one of the most enterprising, hard-working individuals in business. They mostly work on commissions or rebates and are willing to literally go door-to-door offering their products to anyone and everyone they bump into. Imagine how much easier their job would be if they could be an affiliate and simply work via the Internet and a mobile device or desktop.

Also, most direct sales people tend to carry more than one brand in their product arsenal so signing up as an affiliate would be almost the same type of work but using a different approach.

Colleges and Universities

Many college kids would be interested in a part-time income opportunity if it would mean funds to help pay for their education, loan, or partying. All you have to do is make sure to offer them products they can endorse as a student.

Freelancers

Did you know that the U.S. Census Bureau’s latest annual report show that 75% of U.S. businesses used freelancers in 2011? Freelancers earned a whopping US$990 billion in 2011 which is a 4.1% increase from the previous year. The only industries where the number of freelancers decreased were in insurance, finance, and construction. Most probably your affiliate program isn’t a part of these 3 industries.

Furthermore, online business and finance experts are predicting the growth to increase incrementally every year even with an economy that is improving. People just want income security and more control over their earnings. With the spate of lay-offs, it’s understandable why many would prefer to work as an affiliate than as an employee.

Scout For Them At Affiliate Conventions

There are annual affiliate conventions held in different cities around the country. You should try to catch one when it is held somewhere near your location. The average turn-out for these types of conventions has increased regularly over the years. Last year, many of them were sold out weeks before the event.

Advertise!

The US Census Bureau has said that as of 2012, 15% of Americans are poor, 43% of young adults depend on their parents to some extent for money. Even more surprising is that the median income of young adults in 1982 was $31,583 and last year it was $30,604 for the same age group! Income is dropping and people are looking for ways to earn additional income outside of their 9 to 5 jobs. That’s where you can come in playing the hero and helping others realize their dream income.

Finally, go online and talk about your product. Make the affiliate marketers come to you and have the luxury of picking the best candidates. You will need some help in marketing your affiliate program so target a marketer who’s experienced in affiliate program and SEO.

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Source by Lina Stakauskaite

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Recession Is Here… Six Costly Mistakes Home Sellers Make During Recessions And How To Avoid Them

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The U.S. is officially in a recession. What is a recession? A recession is a business cycle contraction or general economic decline due to significant drop in spending and other commercial activities. Most pundits and politicians will blame Covid-19 crisis for the recession, but even pre-Covid-19 the proverbial writing was on the wall.

The U.S. had over 120 months of economic growth, which was the longest expansion in the modern history. Other indicators, such as negative yield spread on treasuries (long term bonds having lower interest rates than short term T-notes), were pointing to an imminent change of the economic cycle and an impending recession. The only real question was: when and how bad?

Then Covid-19 came… If the cycle was going to change anyway, Covid-19 acted as a huge and unexpected accelerant to make the recession much more immediate and severe.

Inevitably during recessions all classes of real estate, including residential homes and condominiums, will be negatively impacted as lower consumer spending and higher unemployment rates affect real estate prices and marketing times.

Here are the six costly mistakes home and other real property sellers make during recessions and how to avoid them:

Mistake #1: This will pass and real estate market will be hot again soon

First thing to remember is that real estate cycles are much longer than general economic cycles. Even if the general economy recovers, which eventually it always does, a typical real estate cycle takes as long as 10 to 15 years. The cycle has four key stages: Top, Decline, Bottom and Rise.

Let us consider the last real estate cycle, which lasted approximately 14 years:

  • 2006 – Prices hit the Top
  • 2006 to 2012 – Prices Decline
  • 2012 – Prices hit the Bottom (Trough)
  • 2012 to 2019 – Prices Rise*
  • 2020 – Prices hit the Top
  • 2020 to? – Prices Decline

*NOTE: In 2016 the national residential real estate price index reached its pre-recession 2006 peak levels. It took 10 years for the real estate market to recover.

The way to avoid this mistake is to recognize that real estate cycles take years to run and plan accordingly. Additionally, nobody knows for sure when the prices will hit the top or bottom until after the fact.

Mistake #2: Low interest rates will make the economy and real estate market rebound

Between 2006 and 2011 the interest rates (Fed Funds) were continuously cut by the Federal Reserve Board and went from low 5% to almost 0%. However, that did not stop the real estate recession and depreciation of property values.

Undoubtedly, low interest rates made the economic decline and real estate recession less severe and saved some properties from foreclosures, but it still took six painful years for the real estate market to hit the bottom and then four more years for the prices to go back to their pre-recession levels.

Some markets had never fully recovered. For example, residential home prices in some parts of California, Arizona and Nevada are still below their 2006 highs.

To avoid this mistake, one needs to realize that although low interest rates help stimulate the economy and the real estate market, they do not cure them.

Mistake #3: I don’t need to sell now, so I don’t care

If you do not need to sell until the cycle plays out, which typically is over ten years, then you will not be as affected, especially if you have a strong equity position, limited mortgage debt, and solid liquid assets.

However, it is good to keep in mind that “life happens” and either professional or personal circumstances can change and we may need to sell property before the downturn runs its course.

Furthermore, if a property has a mortgages and its value declines to the point being “upside down,” meaning the mortgage loan balance exceeds the value of the property, then the options of selling, refinancing or even obtaining an equity line of credit, will be significantly limited.

This does not mean that everybody should be rushing into selling their real estate if there is no need to do so, just keep in mind that circumstances may and often do change and property options will be affected, so plan in advance. As one wise proverb says: “Dig your well before your thirst.”

Mistake #4: I’m selling, but I won’t sell below my “bottom line” price

This is a common and potentially very costly mistake. Generally speaking, every seller wants to sell for the highest price and every buyer wants to pay the lowest price. That’s nothing new. When selling real estate, most sellers want to achieve a certain price point and/or have a “bottom line.”

However, it is important to understand that the market does not care what the Seller, or his/her Agent, think the property value should be at. The market value is a price a willing and able buyer will pay, when a property is offered on an open market for a reasonable amount of time.

Overpricing property based on Seller’s subjective value or what is sometimes called an “aspirational price,” especially in a declining market, is a sure first step to losing money. When a property lingers on the market for an extended period of time, carrying costs will continue to accumulate and property value will depreciate in line with the market conditions.

Additionally, properties with prolonged marketing times tend to get “stale” and attract fewer buyers. The solution is to honestly assess your selling objectives, including the desired time-frame, evaluate your property’s attributes and physical condition, analyze comparable sales and market conditions, and then decide on market-based pricing and marketing strategies.

Mistake #5: I will list my property for sale only with Agent who promises the highest price

Real estate is a competitive business and real estate agents compete to list properties for sale which generate their sales commission incomes. It is not unusual that Seller will interview several agents before signing an exclusive listing agreement and go with the agent who agrees to list the property at the highest price, often regardless if such price is market-based.

Similarly to Mistake #4, this mistake can be very damaging to Sellers, as overpriced properties stay on the market for extended periods of time costing Sellers carrying expenses such as mortgage payments, property taxes, insurance, utilities and maintenance.

Furthermore, there is the “opportunity cost” since the equity is “frozen,” and it cannot be deployed elsewhere till the property is sold. However, the most expensive cost is the loss of property value while the real estate market deteriorates.

During the last recession, we have seen multiple cases where overpriced properties stayed on the market for years and ended up selling for 25% to 40% below their initial fair market values.

The solution is to make sure that your pricing strategy is based on the market, not empty promises or wishful thinking.

Mistake #6: I will list my property only with Agent who charges the lowest commission

Real estate commission rates are negotiable and not set by law. A commission usually represents the highest transactional expense in selling real properties and is typically split between Brokers and Agents who work on the transaction

Some real estate agents offer discounted commissions, in order to induce Sellers to list their properties with them. But does paying a discounted commission ensure savings for the Seller? Not necessarily.

For example, if the final sales price is 5% to 10% below property’s highest market value, which is not that unusual, due to inadequate marketing, bad pricing strategy, and/or poor negotiation skills, it will easily wipe out any commission savings and actually cost the Seller tens of thousands of dollars in lost revenues.

The solution is to engage an agent who is a “Trusted Advisor,” not just a “Salesperson.” A Trusted Advisor will take his/her time and effort to do the following: 1) Perform Needs Analysis: listen and understand your property needs and concerns; 2) Prepare Property Analysis: thoroughly evaluate your property and market conditions; 3) Execute Sales and Marketing Plan: prepare and implement custom sales and marketing plan for your property; and 4) Obtain Optimal Results: be your trusted advocate throughout the process and achieve the best possible outcome.

Finding such a real estate professional may not be always easy, but it certainly is worth the effort and will pay off at the end.

In conclusion, this article has outlined six costly mistakes real estate Sellers make during recessions and how to avoid them. The first mistake is not understanding that real estate cycles are long and take years. The second mistake is a misconception that low interest rates alone will create a recovery. Another mistake is not realizing that circumstances may change and not planning in advance. Mistakes number four, five and six pertain to understanding the market value, proper pricing and selecting the right real estate professional.

By understanding and avoiding these mistakes, real estate Sellers have significantly better chances of minimizing the negative impact of a recession while selling their properties.

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Source by Robert W. Dudek

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Useful Tips To Build The Best Gaming Computer

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Every gamer will want their computer to be the best gaming computer among their peers. Sometimes, with a little knowledge and tips and tricks, it is possible to build the best gaming computer and show it off to your peers. This article will show you how:

1) You can’t get the best gaming computer from computer retailers

If you want to get the best gaming computer, you have to build your own. Different gamers have different requirement for their gaming machine. Unless you are willing to pay a high price, you will not be able to buy a commercial computer that fulfills all your gaming needs. The only option you have is to build your own gaming computer.

2) You don’t have to be rich to build the best gaming computer

It is not necessary to burn a hole in your pocket to build the best gaming computer. With some due diligence, do some market research and compare prices around the marketplace. Merchant such as TigerDirect and NewEgg give regular discount to their products and you could save a lot of money if you catch them during their promotional period.

3) Most expensive parts do not have to be the best part

Sometime, the latest model or the most expensive model does not have to be the best part for your computer. It requires various components to work together to form the best computer system. When choosing a computer part, what matters is how well it can integrate with the rest of the components. Compatibility is more important than individual performance. What use is there if you spend lot of money on the latest quad-core processor and find that your motherboard doesn’t support it?

4) You don’t need to change the whole PC to own the best gaming computer

It is a misconception that you have to change the whole gaming machine to build the best gaming computer. If you already have a good barebone system, what you need to do is to upgrade the necessary parts and your gaming computer can roar back to life instantly.

5) Brand is important

Unless you want to see your computer system malfunction every few days, it is important that you purchase the parts from branded manufacturers with strict quality control. Motherboard brand such as Gigabyte, ABIT, ASUS are some quality brands that you can consider

If you follow diligently to the tips stated above. You will be on your way to build the best gaming computer. While price can be an issue, it is better not to scrimp on important computer parts such as motherboard, CPU, RAM and graphics card as it will cost you more to upgrade in the future.

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Source by Damien Oh

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