Evolution of Globalization Essay

The term globalization denotes globe as a single market.Product presence in different Markets of the world.Production base a evade the globe. gentleman being resources from all over the world.International investmentTransaction involving IPRs.The advent in ICI(information, communication and technology) Rapid economic liberalization of trade and investmentThe mobility of people and transactional movesThe endeavor of satellite channels, internet etc.CONCEPT OF globalizationIMF defines globalization as The growing economical interdependence of countries worldwide through increase in good deal and variety of cross border transactions in goods and services and of international capital flows and also through the more rapid and wide spread diffusion of technology Charles Hill defines globalization it is a shift towards more integrated and interdependent world economyIt has two components1. globalization of markets2. globalization of employmentGlobalization refers to the free cross bor der movements of goods and services, capital, information and people. It is the process of creating network connections among the actors of multinational distances mediated through a variety of flaws. Westernatization, wallmartization, Americanization, Mcdonalization, disnaffication, coco-colonizationFACTORS AFFECTING GLOBALIZATION/ DRIVERS OF GLOBALIZATION governing body of GATT(General Agreement of trade and tariff) and WTO regional integrationNAFTA, ASZN, European union, SAARC, OPEZ, European integration declining trade barriers-tarrifs and quotasgrowth in foreign direct investmentadvancement in technologyemergence of international monetary fund.COMPONENTS OF GLOBALIZATION1. Globalization of markets2. Globalization of production3. Globalization of investment4. Globalization of technologyGlobalization of markets integrating and integrate as the world market a s single market.FeaturesSize of the companyMarket for non-consumer goods, industrial goods and financial goods. Different strategies required for different marketsReasons for globalization of marketsLarge scale industrialization and mass productionTo reduce the risk and to diversify the portfolio.To increase the profitThe failure of domestic companiesAdverse business environmentGlobalization of productionReasonsCheap raw materials, cheap labour and high qualityImposition of restriction on importsReduce the cost of transportationGlobalization of technologyRevolution in telecommunication, information technology and transportation technologyADVANTAGES / DISADVANTAGES OF GLOBALIZATIONADVANTAGESFree flow of capital, tecnology etcIncrease in industrializationSpread of production facilitiesBalance development of world economicsIncrease in production and consumptionCommodities with lower price and high qualityCultural exchange choose for variety of productsIncrease in job and incomeHigh living standardsBalance human developmentEconomic liberalizationDISADVANTAGESIt kills domestic businessExploit human resourc esLeads to unemployment and under employmentDecline in incomeTransfer of natural resourcesNational sovereignty at country stake.Leads commercial and governmental colonizationThe divide mingled with the rich and the poorThe developing and under-developing countriesUnemployment and mass layoffAdverse balance of paymentVolatile of marketsLoss of cultural identityShift of power to multinationalsEffects of globalizationThe globalization may be defined as the process of integration and convergence of economic, financial, cultural and political system across the worldECONOMIC GLOBALIZATIONinternational trade, investments and capital flawsintegration of economicscross border movements of goods and services, technology and capital.FINANCIAL GLOBALIZATIONliberalization of capital movementderegulation of financial systemscross border capital flowslisting in international changes.CULTURAL GLOBALIZATIONIt is the convergence ofculurePOLITICAL GLOBALIZATIONAfter the world war 2, the convergence of the political system The response strategies to globalization forces for emerging companiesDEFENDERThe pressure to globalization is lowUnderstands the home market or the strength lies in deep brain of the market or their competition assets are customized to local market. The company should adopt defensive strategy that focuses on leveraging the local assets in the market ingredient where internationals are weak eg Videocon washing machine introduced semi automatic machineEXTENDERwhere the industrial pressure to globalization is low.They possess militant skills and assets that can be transferred foreign Companies can focus on expanding to markets similar to home basic using competencies developed at home. Ex haldiramDODGERwhere the industry pressure to globalization is really high.To compete in industries with globalization pressure is highly difficult situation for local companies.CONTENDERHigh pressure to globalize and transferrable abroad and competitive advantage that can be leveraged overseas by upgrading the capabilities and resources.