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Globalization

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Kelly Liman

on 30 September 2013

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Transcript of Globalization


GLOBALIZATION

design by Dóri Sirály for Prezi
Act or process in which the people, companies and governments of different countries relate and integrate.

Derived from international trading and investment with the help of IT.

Multiple effects:
environment
culture
political systems
economic development and prosperity
human physical well-being or health
Factors Affecting Globalization
Technological Change
Internet
• Most efficient way to communicate.
• Consumers purchase products.
• Easy transfer of data.

Effects of Globalization on Business Activities
Globalization is nothing but the functioning of a business on a global level. When you practice business from a place different than your local market, you globalize your business.
Business Strategies
Types of Globalization
Financial
• Interconnection of the world’s financial systems
• Between large cities than of nations
Economic
• Permits easy movement of goods, production, capital, and resources worldwide.
Technological
• Connection through technology
• Now available to the poor.


Political
• countries adopt similar political policies and styles of government to facilitate other forms of globalization
Cultural
• Merging of the world’s cultures
• Destructive of local culture

Ecological
• seeing the Earth as a single ecosystem because there are so many global problems

Sociological
• Belief that we are all global citizens and all have the same rights and standards.

Potential Problems of Expansion
Lack of experience and knowledge
Lack of brand recognition in overseas market
Cost of transportation
High prices
Limitation to overseas transfer and business control
Wrong decisions
Legal restriction
Cultural difference may be created
Political and economic factors
Communication problem
Lack of business marketing
Delay the work of business.
Multinational Companies/Corporations
• organization that operates in two or more countries
• aka transnational corporation/multinational companies
• usually established in developed countries
• difference: multinational – head office at home country
transnational – regional head offices
Advantages
Access to employment and new skills
The population will have more money to spend
Improvement of infrastructures
Increase in the quality of life
Population will gain access to cheaper goods
Increased customer base to increase sales
Increase recognition
Economies of scale
Avoid protectionist policies
Cheaper production cost (inexpensive labor)
Spread risks
Globalization of markets

Disadvantages
For Host Country:
Create jobs
Boost Gross Domestic Product
Boost export earnings
Technology transfer
More competition
High management positions may go to foreign employees
Use of child labor
No special loyalty to a specific nation
Native company will not be able to compete with the investing TNC in the area
Working class in the area may not be able to afford the product that’s produced by the TNC
Threat to domestic business that are unable to compete
Domestic business forced to reduce price.

Cost of Transportation
• Cost of transportation has fallen.
• Revolution of containerized transport.
• First container – 1950’s
• “90% of all non-bulk cargoes worldwide are moved by container.”

Cost of Communication
• Cost of communication has fallen.
• Revolution of internet.

Deregulation
• Privatized business throughout the world.
• Increased ability of foreign businesses to operate globally.

The Liberalization of Trade
• Trade protection has been reduced.
• World Trade Organization (WTO)
Consumer Tastes
• Consumer tastes have changed overtime.
• They are willing to buy foreign products compared to their own.

Emerging Markets
• New markets have opened up in countries.
• Growth in their national income.

Pros:
Increase of Market, Prospects, and Opportunities.
Entire world as customer
Increase profit margins
Investment in foreign markets
Give countries potential to develop
Stability in global financial relations
Sharing of technological advances
Better technology -> Better output -> Better profit
Cons:
Doesn't necessarily create employment in local market
Increase dependability of one country to another
Countries became affected by financial situation across the globe
Labor is paid differently in different countries by the same company
Leads to strikes, less employee retention, and problems with the unions
Forest and Agricultural fields destroyed due to expansion
Globalization, if done in the right way, is most profitable for any kind of business.


• Examining the management’s assumption and perception about the market.
• Determining the competition (rival) status.
• Evaluating new opportunities in the market.

Market Strategies

• Identifying and adapting new technologies to meet the needs/wants of the customers
• Attuning the products/services to meet the psychological needs of the clients/customers
• Making improvements of technologies
• Expand and upgrade the product and technical expertise of the employees.
• Determining and developing the company’s strength.

Products and Services Strategies
Establishing clear job descriptions
Create a system whereby the responsibilities and authority of each position are clear to all the workers
Evaluating the effectiveness of the systems in the company


Organization Strategies



Determining if the company is exploring and taking advantage of every conceivable source of finance
Evaluating whether it improves the business growth or not.
Evaluating how the company can organize financial information as a positive instrument for tracking and monitoring performance on key activities.
Keep expenditure within or below budgeted levels.

Financial Strategies

http://www.buzzle.com/articles/globalization-issues-in-business.html
http://schoolworkhelper.net/types-of-globalization/

Resources
Full transcript