1. INTRODUCTION
The globalisation of business and commerce has become an increasingly significant reality worldwide, in 2000, the global trade in goods and services reached 25% of world GDP (Govidarajan & Gupta 2000), while in terms of mass-produced goods, more than 100 times international trade multiplies since 1955 (Schifferes 2007). For International presence of Business, globalisation raises a number of important challenges. This essay discusses the main issues affecting globalisation in international businesses, strategic options available for countries, culture and cost of business, risk factor and international theory in theoretical perspective as well as in public perspective.
2. GLOBALISATION IN THE INTERNATIONAL BUSINESS ENVIRONMENT
According to Govidarajan & Gupta (2000) globalization in the international business reflected in the increase in cross-border flows of three types of products: goods, services, capital & knowledge and it also growing economic interdependence between countries.
There are two types of globalization according to Hill (2005) one is globalization of production and the globalization of market.
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STRATEGIC CHOICES FOR INTERNATIONAL BUSINESS
Perlmutter 's (1969) highlighted the importance of a global preemptive approach to business. However, the best approach to deal with the world markets in argument. In the context of international strategy, international business is not the ultimate interests of the company. The countries create strategic options for availing benefits from international trade. E.g. NAFTA, the main motive of the NAFTA is to make North America more competitive in global market and to reduce the trading costs and increase business investment.
It also increases the international presence of the company, the evolution of the multi-frequency local strategy or translation. According to this approach, companies have branches in different countries, which creates dependency on one another (Briscoe and Schuler
Throughout our lives, things around us have been changing, simple things, such as iPhones and other technology because of globalization. Globalization since the second world war has been mostly better for us than worse because there are decreased poverty rates and life expectancy has increased, but we are polluting our world with environmental destruction and Co2 emissions. Since the Second World War, extreme rates of poverty have decreased. According to Document 1, starting around 1950, there was a steep decrease in extreme poverty. It went from around 60% in 1950 to lower than 20% in 2015.
Reducing trade restrictions such as imported taxes (known as tariffs) allows for the transfer of goods, services, and investments to be free across national borders. Canada, United States and Mexico already have an agreement through NAFTA (North American Free Trade Agreement). The importance of globalization, however, is free trade throughout the world. Goods, services and investments move freely to find the most competitive environment so that customers and investors benefit. This kind of environment depends on several factors such as labor costs, government regulations like environmental controls on manufacturing, and the value of a nation's currency.
Globalization in the past 80 years has connected our world exceptionally well compared to the years before. Just under 80 years ago, when World War II ended, people saw an opportunity to grow together and learn from past mistakes. Globalization has brought the world together which has caused poverty rates to go down, work systems to become stronger leading to more accessibility, and overall life expectancy to increase. Globalization has forever changed the ways of the world and will continue to benefit people by bringing us together to become one substantial world. Globalization has benefited our world involving the decrease in poverty rates.
Globalization is the inclusion of the differents values socio-cultural and economic local from one country to another, through their relationships exchanged a series of products and knowledge that extend and increase their ideological and economic situation. Globalization is beneficial for businesses of Colombians. As well as has influenced in areas as the social, economic, cultural, political, technological and educational in our country, globalization has ventured into the business of Colombians to favor or disfavor wholesale sales. Globalization has been a transition process started from the time of conquest and colonization, this exchange of cultural contracted a new market with mobility and trade of products and goods which over time did not stop there, but rather it was intensified and point greater flowed recognition from the
Globalization in Ecuador The definition of Globalization according to “Business dictionary” means: The worldwide movement toward economic, financial, trade, and communications integration. Globalization implies the opening of local and nationalistic perspectives to a broader outlook of an interconnected and interdependent world with free transfer of capital, goods, and services across national frontiers. However, it does not include unhindered movement of labor and, as suggested by some economists, may hurt smaller or fragile economies if applied indiscriminately.” “Investopedia” define Globalization as “the tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby
In order to be succeed on international market, it’s very important point to define the international strategy. If to define the international strategy: an international strategy is when a company hires a strategy through which its goods and services are sold out of its local market. Enlarging into international markets allows potential opportunities to companies. Let’s see the IKEA’s international strategy in the following Figure 1. IKEA has expanded from a small, family-owned home furniture corporation into a global retailer within 385 stores in 48 countries, during its 72-year history.
i) Ethnocentric Ethnocentric is a staffing policy that generally adopted by headquarters by sending employees from the home or parent countries to the host-country. For example, Jane works in China but she is a citizen of the Malaysia, where her company is organized and headquartered.
Different nations are characterized by different management ideologies, which can either help or hurt them in building competitive advantage. If there is a strong domestic rivalry, it helps to create improved efficiency, making those firms better international competitors. Porter also notes that chance (such as new breakthrough innovations) and government policies (such as regulation, investments in education, etc.) can influence
Global strategy is an international strategy that implements by a company which they doing their business in different countries. Internationalization is a process for IKEA expand its business and it was quite important because through the internationalization process, IKEA was able to gain a broader area of marketplace to sales their products, which will lead to profit and revenue increased and new market places existed mean new opportunity for IKEA to improve their product in order to meet the customers’ needs. The first reason that IKEA should go to international level is because the Swedish market is small and no enough for IKEA to expand itself. This is important for IKEA because the small market mean low opportunity, lower profit and
Multinational corporations see these countries as more attractive locations to establish branches of their business and so the cycle of more money going into the economy
5.3 Country position and attractiveness According to Porter (1990), the level of competitiveness on a country depends on the capacity of the industry and the skills to upgrade and innovate. The competitive advantage is produced and sustained on the differences in values, economics structures, culture, institutions, history, and other factors that contribute to competitive success. Therefore, companies as well as nations have to fight for a position on the market as centers of production or industrialization of products.
The term “Globalization” has been in existence for the past 50 years. It is one of the major causes of the increase in international trade. The Oxford Dictionary defined Globalization as “the process by which businesses or other organizations develop international influence or operate on an international scale”. It is a phenomenon that has been in the front burner for several years. Certain individuals opine that it serves as an advantage for the developing countries to compete in the global market while others were of the opinion that it favors the developed countries by making them richer (Giddens, A. 1999).
The founding of WTO in 1995 increased the conflict between economic globalisation and the protection of social norms until now because of WTO aims at further trade liberalisations. While there is no universally agreed definition of globalization, economists typically use the term to refer to international integration in commodity, capital and labour markets. There are many impacts that existed after the introducing of WTO. Firstly, the globalisation has changed the way of economic nowadays.
The exceptionally notoriety of the word 'globalization’ signals a require for caution. The word was barely utilized some time recently the late 1980s, indeed in scholarly circles, but nowadays you can barely open a daily paper without experiencing the term. It might effortlessly show up to is an elegant name utilized to assign wonders around which one has as it were the vaguest thoughts. However to dispose of the concept of globalization, and the huge consideration agreed the marvels it envelops, on such grounds, would be silly. There is a genuine require for a common, non-specific term to portray the complex, multi sided ways in which the world is inter-connected, and progressively so.
Then I will state the links between globalization and some of the other lectures that we have covered this year, I chose this lecture because it’s one of the most important parts of any business environment worldwide, globalization has also introduced many developments such as internationalization, liberalization etc. Topic Discussion: Globalization has opened the doors between all businesses and countries worldwide, it has created connections without boundaries and a global exchange of information, cultures etc. It has widely increased the flow of money exchange and foreign investments in countries, and created an involvement between different people in many political, social and economical activities. Changing world politics, technological