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Effects Of Globalization On Retail Stores

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Introduction
In this assignment, I have chosen to investigate the effects of globalization on retail stores. To help me explain globalization I have inserted a quote from Anthony Giddens “Globalization can be defined as the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa.” In other words, globalization is the process of increasing togetherness of different markets.
Background to globalization
Globalization has been happening for over 5000 years (Tehranian, 2005) but has quickly progressed since the demolishing of the Soviet Union in 1991. Authors and scholars who study globalization use the discovery of America as …show more content…

Due to outsourcing, retailers can find their product at a cheaper price in another country than in their local markets. By doing this, retailers can also benefit from the economies of scale.
• Technological advances: With globalization, we gain a widened perspective. Due to technological advances, retailers have the ability to find out customer reviews and opinions.
Challenges of globalization
Globalization has been the cause of an argument between many economists, theorists and scholars. Many believe that globalization will cause the finite resources to be used up more quickly. In retail, there are many challenges to globalization. These include:
• Standardisation of products: Globalization is facilitated by offering standardized products, but many critics argue that over-standardisation leads to lack of product diversity.
• Interdependence of markets: This is one of the biggest criticisms in globalization. As countries become dependent on each other, any economic or national disaster can affect more than just one country. Example: When the ash cloud appeared in Europe, it affected airports in Europe and because of this, retailers in the airports were …show more content…

In foreign markets, Carrefour had a local partner who knew that specific market. Carrefour customized its store to suit the local customers. Instead of selling imported French products, Carrefour sold local products through its stores. Carrefour chose to venture into South Korea on its own without a partner and because of this, they failed because they did not understand the market. The company employed French personnel and failed to localize its stores to the Korean costumers. Carrefour wanted to attract the customers by providing them with high quality products in bulk at low prices. But most Korean purchasers were not bulk buyers. Most customers wanted a clean, sophisticated atmosphere with low prices. In 2006 Carrefour exited the Korean retail

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