Globalization in the Fashion World

Globalization in the Fashion World

Tasfia Ahmed, Nina Iannone, Sheik Holbrook, Jordan Rodriguez

Differences

Global Trade

Globalization

Domestic Trade

the process by which businesses or other organizations develop international influence or start operating on an international scale

The following are the major differences between domestic trade vs. international trade:

Domestic Trade:

Free to move around factors of production like land, labor, capital and entrepreneurship from one state to another within the same country, Easier to move good without much restrictions. Same type of currency used, speak same language and practice same culture, limited market due to limits in population

International Trade:

Quite restricted, Restricted due to complicated custom procedures and trade barriers like tariff, quotas or embargo, different countries used different currencies, broader markets, Communication challenges due to language and cultural barriers

Difference between Global Trade vs. International Trade?

“Global” is a word that is used to refer to issues and concerns of the entire world while “international” is a term that is used to refer to issues and concerns of two or more countries.

International has a smaller scope encompassing only two or more countries while global has a much larger scope, which includes the whole world

Global companies have offices and branches as well as investments in other countries while international companies export their products and import the products of the country with which they have international trade relations but hold no investments in each other’s economies.

The exchange of goods within boundaries of a country

Examples: Wholesale and Retail

The exchange of goods between countries. Through trade countries are able to obtain goods they need from other countries. Countries can also earn money by selling good or services.

Example: The exporting and importing of goods and services is critical to U.S. economic growth and stability.

Similarities

International Trade

The exchange of capital goods and services across international borders or terrorizes

Similarities in Domestic and International Trade:

• Both involve exchanges of goods and services
• Objective is Profit Maximization
• Basis for Trade is Cost Advantage
• Both enhance consumer’s satisfaction by proving various goods and services

Work Cited

History on International Trade

• "World Investment Report 2013." United Nations Conference on Trade and Development (UNCTAD) World Investment Report (WIR) (2013): n. pag. Web.
• DATA TEAM. "Why Everyone Is so Keen to Agree New Trade Deals." The Economist. The Economist Newspaper, 06 Oct. 2015. Web. 23 Jan. 2017
• http://www.strategy-business.com/article/00298?gko=185c6
• http://www.polity.co.uk/global/whatisglobalization.asp
• http://www.investopedia.com/ask/answers/022615/what-effect-has-globalization-had-international-investments.asp

Trends: - Globalization has increased communication and awareness of business opportunities in many different parts of the globe.

- The growing extensity and intensity of trade has led to the increasing enmeshment of national economies with each other.

History (cont)

• The U.S. produced more than 60 percent of the world's output of manufactures in the late 1940's
• The U.S long term foreign asset and liability positions have both grown steadily at about 10 percent per year since 1950.
• This has resulted in an internationalization of investment over the same period in which the U.S. lost its dominant position in trade.
• The value of world merchandise exports rose form $2.03 trillion in 1980 to $18.26 trillion in 2011.
• Commercial services trade recorded even faster growth over the same period, advancing from $367 billion in 1980 to $4.17 trillion in 2011, or 8.2 percent per year

• Changes in prices and exchange rates were recorded as an increase of more than four fold between 1980 and 2011
• The most significant fact about world trade since 1980 is that it has grown much faster than world output for most of this period
• During the early 1980s, global output and trade grew at nearly the same rate, around 3 percent per year
• The end of the Cold War provided a "peace dividend" in developed economies, which allowed them to reduce military expenditures and boost investment in other areas
• Large developing economies such as China, Mexico and India embraces economic reform and initiated a process of catch up growth in which trade has played an important role

Challenges: - Although markets may be global, regulation remains largely national. Differences in regulation are causing international friction.

- Some business may be derailed due to a country having better economic growth than the other.

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