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Dimensions of Market Globalization
Transcript of Dimensions of Market Globalization
Integration and Interdependence of National Economies
Firms engage in operations across multiple countries. Trade, investment, geographic dispersal of company resources, and integration and coordination of value-chain activities are among the operations of international firms.
Growth of Global Investment and Financial Flows
The globalization of capital is facilitating the interconnection of economies across the world. Banking, commercial and investment, are universal industries. International communications has allowed for global financial transactions and also the integration of national markets.
The Government has lowered barrier to international trade and investment, which has helped to integrate fiscal and monetary policies within trade blocs.
Globalization of Services
Services is a major industry that has been taking advantage of globalization. Industries including retail, banking, and hospitality are becoming more internationalized. Businesses are also outsourcing their business processes abroad. Furthermore, people have recently started going abroad to take advantage of lower costs of services.
The World Bank, International Monetary Fund, World Trade Organization also contribute to reduction in barriers among trade and investment.
Rise of Regional Economic Integration Blocks
Regional economic integration blocs (also known as trade blocs) have been emerging since the 1950s. The North American Free Trade Agreement area (NAFTA), the Asia Pacific Economic Cooperation zone (APEC), and Mercosur in Latin America are all blocs that have made trade and investment easier by reducing barriers.
Convergence of Consumer Lifestyles and Preferences
Globally, consumers are becoming more similar. Shoppers in different parts of the world demand similar electronics, automobiles, and clothes. In industrial markets, buyers have been buying parts that are more standardized . The convergence of lifestyles and preferences can cause individual countries to lose their traditions and values.
Globalization of Production
Companies are constantly looking for ways to reduce the costs associated with production and marketing. Through economies of scale, firms are able to lower costs by standardizing what they sell and outsourcing manufacturing to other locations abroad with inexpensive labor.
Cavusgil, S. Tamer., Gary A. Knight, and John R. Riesenberger. International Business: The New Realities. Upper Saddle River, NJ: Prentice Hall/Pearson, 2012. Print.