Effect of Globalization on Market Processes

This is the concept is well established in the current market process, Globalization is the international process and activities. Generally globalization means countries interrelated and integrated each and other. But academics and professionals provide different definition to globalization as follows,

(Suny Levin institute)

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven byinternational tradeandinvestmentand aided byinformation technology. This process has effects on theenvironment, onculture, on political systems, oneconomic developmentand prosperity, and onhuman physical well-beingin societies around the world

Ambassador Gérard Stoudmann

Globalization is a process that encompasses the causes, course, and consequences of transnational and Trans cultural integration of human and non-human activities.”

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Anthony McGrew’s

Globalization [is] a process which generates flows and connections, not simply across nation-states and national territorial boundaries, but between global regions, continents and civilizations. This invites a definition of globalization as: ‘an historical process which engenders a significant shift in the spatial reach of networks and systems of social relations to transcontinental or interregional patterns of human organization, activity and the exercise of power.

Sociologist Cesare Poppi

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“The literature stemming from the debate on globalization has grown in the last decade beyond any individual’s capability of extracting a workable definition of the concept. In a sense, the meaning of the concept is self-evident, in another, it is vague and obscure as its reaches are wide and constantly shifting. Perhaps, more than any other concept, globalization is the debate about it

Generally, globalization has affected many nations in various ways; economically, politically, and socially. It is a term that refers to the fast integration and interdependence of various nations, which shapes the world affairs on a global level. Globalization has affected the products people consume, the environment, culture, security, and idea exchange between different countries. There are many factors that lead to the speedy globalization trends.

Factors drive the globalization

Globalization is the current strength of business and organization globalization is occurred for the following drivers otherwise globalization cannot achieve the better position in the market. Specially globalization emphasis drivers or factors illustrate under three category that are

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Market drivers

Cost drivers

Competition drivers

Environmental drivers

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Market drivers

Customer needs and wants is the main concern in the globalization, today market moves to updated service and process, but the organization consider the customer wants and need and they move to purchase the product and service from different area, then geographically every country they haven’t an entire resources, then the organization need a international support to achieve the market position.

Global customers are other important factors who determine the international business and globalization, earlier the customers are requires the local product, and their requirement was limited to local but today international organization and multinational organization makes the customer limit into global, then the organization makes the international business and covers global customers as well

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International channeling and communication is another factor that drive the globalization today, telecommunication services are developed in many factors that makes the globalization into more effective and efficient, basically telecommunication development makes the globalization into effective and efficient.

Technology

There are many powerful factors of demand changes but the preference factor is technology. Today world is technology world. Technology affects and makes the changes in entire sectors. When the technology will change or update then the less period the organization can evaluate the sign of demand changes. Day to day technology development makes the organization survival into more difficult, but the organization also includes the innovation and create new concept into the business

Strengths of market drivers

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Today a market driver makes the globalization into more effective and efficiency, there are many global areas, and business sector makes the process and business into standard. Specially banking industries, Soft drink industries, automobile industries, computer, aircraft industries are makes the market strength, and many industries uses the globalization to achieve the better position in the market as well.

Traditionally and Separate different national markets are merging into one huge global marketplace where the preferences tastes and purchasing behavior of consumers in different nations are starting to converge to some global model.

Cost drivers

Second major important sector that determine the globalization is cost drivers, basically organization provide more importance for two activities, which are income level and cost, organization used the globalization to increase the income level and reduces the cost.

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Global scale economics, production different, changing technology, production development cost are the major factors that affect the globalization. Competitive advantages, absolute advantages are mostly consider under the cost drivers.

Organization cost and scale of cost determines the globalization, firstly every organization consider the cost, and compare the cost, then the organization moves to less cost product and service, then the organization can increase the profit and income. Cost drivers are makes the activities and process into more better. Being lowers its overall costs by sourcing, manufacturing, and selling aircraft worldwide.

Government and environmental factors

Government and environmental factors that directly drive the globalization, trade policy is the main concern in the government sectors, every country that have a special government policies, and procedures, then the organization cannot freely provide the service to the market, then the organization must adopt to the government. government policies, and there economy policy decide the globalization activities as well.

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Government is another factors influence in the demand. Mostly government makes some changes and update in the country ongoing g process. Sometime country government directly influence in demand. Introduce new tariff, Tax holidays, newly product imports, increase or decrease Tax Government awareness programs, provide market ideas to citizen, political inflexible, Government budget deficit and etc. The above government intervention makes the changes in the demand and Government can make every changes so this is the more risky and powerful factors in demand changes

Government system and procedures changes are another impact of the globalization. System and procedures changes inform that culture of the organization is different from the others. When government every small changes will makes the system also to be change. Simply government system and procedures are depending in country policy and economy scale., changes in government procedures, include new system, reporting power change, authority structure change, new people arrivals and economy interest rate, inflation rate are the major changes occurs after influence government drivers of globalization.

Competitive drivers

Every sector face the problem of competition, many academic people argued that the competition is the best sign for the healthy marketing. Today business is customer based business and the customers are king. Organization avoid the customer needs mean that is the major risk to the company. Globalization strategy is the better strategy to faced the competition challenges, Organization faced many problems in the internal and external factors, every organization provide the close competition to the product and service, then the organization need to up-date the product and service, makes the innovation services are more important to the organization, then the organization expand its service and range by day to day and that makes the globalization into more effective and essentials.

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Advantages and disadvantages of globalization

Many years and decades that the above concept under the debates, because the organization and country were received the mixed results on globalization. Many development countries received the positive result from globalizations and developing countries failed to receive the positive result.

There are many impacts that occurred from the globalization as follows,

Globalization has positive side and negative side to both country and business as well. Specially economy that describes that income level increase, GDP and GNP level increase, market expansion, technology development, innovation and creativity activities, market trend increase, global standard products, quality of the product and service, and etc.

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But other side of the globalization that describes that country loss their own nature, and cultural impact, increase the poverty, market and resources are highly consumed, environmental impacts, social and individual attitude changes, and etc

Advantages of globalization

International Trade

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Today international trade and achieve the better market position are the main concern of international trade. International trade has become wider its possibility with the help of business process outsourcing, purchase and sale of product and service are not the only two transactions involved in international trade. International trade reduce the border of nation to nation and that makes the economy into more strength, specially international business process as well import and export are became huge growth, that impact to income per person and process.

GDP and GNP increase is the another milestone advantage to the country and net profit increase, gross profit and profit margin increases are another favourable aspects in the globalization, when international market reduce the tariff, release the tax and other government intervention, then many investors interest to increase the investment in the market.

Higher Sales

Once product, service or company gets on the radar screen of scenario, it increases chances that consumers will make a purchase. As knowledge becomes a truth, it is also the point where new customers start to extend the word, telling friends and family about this remarkable new product they exposed. Sales will steadily increase as spreads. Without employing marketing strategies, these sales may not have ever happened

Healthy Competition

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Marketing also foster an environment in the marketplace for strong completion. Marketing hard work get the word out on pricing of products and services, this not only reaches the future consumers, but also reaches other companies competing for the consumers’ business. As opposed to companies that have a control on products and services that can blame almost any price, marketing helps keep pricing competitive for a business to try to win over consumers before its competition does. Without competition, well known companies would continue to sell while lesser known companies or new companies would situate little possibility of ever becoming successful. Marketing facilitates the healthy competition that allows small businesses and new businesses to be successful enter and grow in the marketplace

Innovation and Intellectual Property

The strength of enterprise is able to be seen across the victory stories that characterize many of businesses. The will to be successful even with the chances is what drive to grow businesses from position up, globalization makes the business into more effective and makes the human resource into more effective, that makes the creativity thoughts and innovation.

Other favourable advantages of globalization as follows,

Channel Execution– system and implementation of recognized social media channels (Face book, Twitter, YouTube, Google+, Foursquare, YouTube, LinkedIn, Interest and more).

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Strategy Implementation– put into practice and personalizes your social marketing tactic – including designing, building and executing social media tactics.

Campaign activities– generate designs and a satisfied marketing strategy that correspond with a specific campaign or promotional materials.

Online Reputation Management– make the most of proactive discussion monitoring to assist brands to listen, understand and connect in conversations in social media.

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Event Integration– integrate social media into events, shows, and conference to increase alertness, word of mouth marketing and contribution

Communication

Communication and telecommunication development makes the organization process into effective. Today globalization makes the process and procedures into effective. Information technology has played a vital role in bringing the countries closer in terms of communication every single information is easily accessible from almost every corner of the world. The Internet has significantly affected the global economy, thereby providing direct access to information and products.

Disadvantages of globalization

Loss of Culture

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Every nation they have separate culture, and that recognize the country, After the globalization not impact on economy but also impact on culture, then that makes negative impact, and another economy cultures that directly influence on local country culture, and economy.. With large number of people migrate into and out of a country. They tend to follow the foreign culture more, forgetting their own roots. This can give rise to cultural conflicts.

Monopoly

Monopoly is a situation where in only one seller has a say in a particular product or products. It is possible that when a product is the leader in its field, the company may begin to exploit the consumers; the leader takes full advantage of the sale of its product, which may later lead to illegal and unethical practices being followed. Monopoly is disastrous as it widens the gap between the developed and developing countries.

Environmental issues

Every organization that entered to another economy and operate the business in different countries, then the globalization moves the capital into one place to another place then the organization starts the large investment, then the country or organization mislead the resources, that makes the process into defective.

Monopoly

Monopoly is a situation where in only one seller has a say in a particular product or products. It is possible that when a product is the leader in its field, the company may begin to exploit the consumers. As there exists no close competitors, the leader takes full advantage of the sale of its product, which may later lead to illegal and unethical practices being followed. Monopoly is disastrous as it widens the gap between the developed and developing countries.

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Developed countries can suppress development of undeveloped and under-developed countries, then the development countries uses the developing countries for only resource requirement, then the organization or developing countries are not interest in the globalization

Economic depression in one country can trigger adverse reaction across the globe.

It can increase spread of communicable diseases.

Companies face much greater competition. This can put smaller companies, at a disadvantage as they do not have resources to compete at global scale.

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