Globalization and International Marketing - Essay Example

Globalization and international marketing affiliation Introduction Globalization is seen as a phenomenon with great opportunities. Its pursuance ought to be done with close reflection to its costs and opportunities. It takes several forms, yet it is mostly defined within its economic scope due to its powerful impact ad contemporary prominence. In economy, globalization entails deep interaction and interdependence of the world market because of its increased mobility of services, goods, communications and capital (Levitt 2008, pp.92–102). Fig. 1. Integration of globalization and several factors (Hopkins 2002) Several factors such as advancements in technology and deliberate policies of neo-liberalists drive globalization. Globalization is not new, yet the modern globalization is different in scale. It penetrates more people and interior areas than ever recorded before. Globalization has come with many benefits such as rapid growth in the economy, reduction of poverty among other benefits. On the other hand, on economies of domestic scale must be allowed to adapt and the global economy, on the other hand, must be managed on a worldwide scale. Interdependence in economy and its global advances leads to a democratic and safer world. The globalization forces have been set in motion and are not reversible; hence, the world must act to recognize globalization as inevitable, and work hard towards reaping its benefits (Hopkins 2002, pp.765-987). Features of globalization Opening and planning to expand business throughout the globe Erasing the difference existing between the market existing domestically and internationally (foreign) Buying and selling of goods to any of the countries globally Locating the production and other physical facilities on a consideration of the global business dynamics, irrespective of national consideration Globalization today Globalization is an encompassing word that takes several forms. It describes the vast economic, social, political, and cultural changes that are arising as a result of integration and interaction of people, governments, and institutions of various states. Due to its contemporary influence, globalization is defined within economic scope. This process is driven by the global financial system of investments and trading. Globalization entails transnational movement of goods, services, and capital, spreading of ideas, information, and people through the increasing mobility of communications; all these are enhanced significantly by changes in information technology. These give rise to interdependent global markets (Yücel 2009, pp.93–104). Globalization is hardly a “natural” process because of the advancement in science, but rather the result of strong policies of neo-liberalists and the structural measures. Following the post-world war era, the reforms of the neo-liberals became commonplace international policies of economy. They adapted to facilitate coordination and growth of economies as well as being emblematic in the agreement on trade and tariffs in the year 1947. Today’s globalization has several characteristics, which are unprecedented. The current wave of globalization, which gained rapid force in the mid and late 1990s, can be seen as primitive extension. The huge difference that modern globalization come along with is its scale of operation. With modern technological advances penetrating more lives in a cheaper and faster way, globalization takes such advantage to penetrate even deeper into the society. Globalization today is more individual with the use of internet acting as an instant and an almost costless system that enables personal consumption and production of goods and services. Today, Multinational Corporations are acting as the backbone and a force behind the rapid globalization. The numbers of multinational corporations are increasing dramatically since 1970s making the quantitative scale of globalization enormous thus opening huge opportunities that need to be pursued with great caution (Keohane & Nye  Jr. 2000, pp.104–119). Fig. 2. Globalization today and global market (Keohne & Nye 2000) Internationalization Companies must be able to internationalize in order to be successful in terms of time to market, effectiveness of costs and satisfaction of customers. The companies must plan and develop for the international market from the products conception. Norms and behavior established by challenges of globalization require different mindset. However, globalization helps in creating opportunities for those participants who are well prepared, futuristic and possess great insight. In addition, it also increases the frequency of cross-border financing, transactions and increasing levels of competition ( Wind 2008, pp.23–26). The multinational companies are on scrutiny for impacts that can be potentially damaging to the host country’s environment. Citizens, as well as the environmental groups, are becoming vocal on issues dealing with the environment. Perhaps, the most important lesson from market globalization is that the skills and education of the working force and managers are the firms’ main weapon for competition. Individual enterprise should be given consideration in the internationalization context. The product system of internationalization is seen to be accelerating as the numbers of multinational companies from different countries are taking advantage of the development of technology to outsource their production. The role that multinational companies are playing in the international trade may suggest that it might be interesting to put cross-border transactions from the ownership point of view rather than residence into consideration (Bird & Fang 2009, pp.139–143). Impact of globalization Globalization is an interesting phenomenon because it is so obvious that the world has been going through change process towards an increasing financial, cultural, social, political and economic market, and interdependence in environment among nations. Virtually, this process affects every individual. Given the changes brought by globalization throughout the globe, it leads to the creation of a world without borders. Globalization is driving individuals to change their ways of living, prompt business firms to make changes to their ways of conducting businesses, and, motivate establishment of new national policies by nations. Several events that are taking place in different sections of the world have consequences, which are dramatic to other parts of the globe at a faster pace than any person could imagine in the past (Thoumrungroje 2004, pp.143-564). Fig. 3. Globalization and economic growth of countries (Thoumrungroje 2004) Globalization enables businesses and firms to find as well as outsource customers around the world. The operations of globalization and production benefits firms through realization of economies of scale and scope. Thus, no one can stand to deny that globalization has changed the perspective and was through which business is being conducted today. Even though globalization is a phenomenon taking place globally, the extent to which every country has been globalized in not same. Each nation has taken different steps to achieve its length of globalization (Deardorff & Stern 2002, pp.404–423). The threats and opportunities globalization has evoked caused several firms to adapt their organizational strategies and structures accordingly. Firms that have been able to respond to these global trends have recorded a great improvement in their performance. This has been made possible through the opportunities that have been presented by the global market enabling firms to access resources worldwide and expand further into several new markets overseas; thus, creating high performances in firms (Bouzigard 2011, pp.537–539). Globalization simply implies an increase in trade thus lowering of tariffs, using higher technological means and increase in economic integration. All these factors have been attributed to increasing growth in a country’s economy; consequently increase in gross domestic product (GDP). This is evident since in a normal sample; it is higher than of globalization did not take place. Even though globalization sometimes affects some people and groups, it positively increases the gross domestic product of all the countries involved. Fig. 4. Growth rate of real Per Capita GDP (Dollar nd Kraay 2001) What it means for international marketing In the past years, marketers have been able to capitalize on the demands coming from the regions of the world, which are developed such as Europe, North America, Australia, and Asia. Demands in these markets remain strong to date. However, the market growth has slowed. Today, international marketers are now turning to developing regions of the world where there lies huge potential for growth of the market. The emerging market having the highest potential for growth is found in Africa, South America, Asia, and the eastern side of Europe. Most significantly, the international marketers are now putting much of their efforts on gaining entry into these areas (Tan & Lui 2002, pp.799–804). Fig. 5. Emerging markets of globalization (Tan and Lui 2002) Globalization has been having an increased significant impact on international marketing. Several markets are becoming open to international organizations is the cost, and the complexities of overseas operations are reduced by the introduction of globalization. One of the major drivers of increasing international marketing is the reduction in the costs because of globalization. In this case, several organizations are in a position to have access to cheaper resources and materials in countries that are developing. This not only allows these organizations to price their products at lower price, but also helps them open broader market to the people on the available income at the disposal to buy more services and goods (Abdelal & Segal 2007, pp.103–114). The new and improved communication of technology is spreading throughout the world. This allows international campaigns in marketing to be coordinated from a domestic base. The introduction of mobile phones and internet on the market has dramatically opened up new international industries having potentials that re endless. Globalization has come with numerous changes such as the way people are shopping. The consumers of products can do shopping around the globe for deals that are good and are prepared to buying from overseas shops without even viewing the products at first (Basu 2006, pp.1361–1373). Globalization has played a huge role in increasing global market competition for products and goods. In turn, this led to increasing importance of effective marketing in the international market. Several global organizations cannot rely on the fact that they are the only key players in a domestic market that has long been held. There is emergence of new competitors in the market and they appear all the time. The distributions, as well as the transport system, are more efficient than ever before, making it easy, fast, and cheap for organizations to conduct their businesses to get their goods and products reach h their customers in the shortest time possible. The use of electronic means of transfer has made making and receiving of payment internationally faster and secure. Today, finance appears to be more readily available to both the organizations and consumers due to globalization of several providers of finance. Investors are developing interest in spreading their investments throughout a wider range of markets in order for them to reduce overall risk level. It is through an increased capital availability for organizations to finance their international marketing efforts (Robinson 2001, pp.157–200). Globalization enables formation and development of wide-scale economic opportunities in the world. The increase mobility created by globalization leading to the formation of a broad and diverse international environment of the economy that enables dramatic and rapid growth. Through the reduction of trade barriers, all participants wealth are lifted as economies engaged in specialized and efficient means of production and trading in international as well as foreign markets. Trade helps economies obtain raw materials that are required for the process of production. International investment has decreased dramatically due to the advancement in information technology and the capital mobility. Actors of economies have wider, instant accessibility to markets, with modern tools for identifying and pursuing economic interests. As global markets are continuously becoming interconnected and interdependent, globalization can no longer be pursued unilaterally. It requires the presence of international as well as regional institutions in promoting access to markets, risk prevention and ensuring the greatest benefit for all. Into the future, it is projected that globalization will be able to bring more sellers and buyers in the market. Those organizations, which will be able to make most out of the opportunities coming along with globalization, will stand the best chance of succeeding in the international market (Stremersch & Verhoef 2005, pp.585–594). Conclusion Globalization taking place within the strata of the economy is a phenomenon possessing a myriad of opportunities. It creates an increase in mobility of goods and service, services, ideas and capitals. This creates an economic environment conducive to large economic growth, improvement in the standards of living and general welfare in the countries that are developing. The interdependence and interconnectedness of markets reduce conflict incentive, increases democracies and peace in countries. To reap the benefits of globalization, domestic markets need to readjust and manage risks on a cooperative basis. It is paramount for domestic markets to pursue globalization in all corners of the world so that they can such for cheaper resources to enhance their capability of production as well as selling to the buyers (Cooper 2008, pp.155–156). CEO Briefing It is recommended that you do further readings in the following scholarly work: Bank of International Settlements, 2008. BIS Papers Financial globalisation and emerging market capital flows. BIS Papers, pp.363–388. Bank of International Settlements (2008) indicates that several things lead to globalization. If the technology were the only factor action as the driving force behind globalization, then the world would not have seen a series of continuous advancement over the last two centuries. Nineteenth century marked an upsurge in economic growth. The negotiations to the epitome of the economic growth was quite easy but was soon brought down by the world wars, and there came a massive depression. It was then followed by another era of increasing globalization, international economic integration, in the last half century Scott, A., 2010. Market and Society: The Great Transformation Today. Journal of Cultural Economy, 3, pp.403–405. Scott (2010) argues that the changes seen over the course of the years, neither the production factors nor the markets for goods and services are integrated today than ever before. There is no more integration of capital in developed countries despite the critical changes seen in the composition flow of capital and less labor integration (Scott 2010). Scholte, J.A., 2008. Defining globalisation. In World Economy. pp. 1471–1502. According to Schole (2008), if the technology has consistently been increasing the potential for global trade, which is not, in fact, what has happened in the global market its explanation must be found in a matter of policy. As it appears, globalization is chosen more than it is destined to be. The answers must, therefore, be derived from the policies of trade and what happened to these policies towards mobility of capital and control of movement of people (Scholte 2008). Tausch, A., 2010. Globalisation and development: The relevance of classical “dependency” theory for the world today. International Social Science Journal, 61, pp.467–488. The domination role of multinational companies in organizing today’s production and exchange structures has played a huge part in releasing the rate of globalization. The rise of the multinational companies in service and manufacturing reflects many vital changes in the economy of the past century (Tausch 2010). Betrán, C. & Pons, M.A., 2011. Labour market response to globalisation: Spain, 1880-1913. Explorations in Economic History, 48, pp.169–188. It is indicted in Betrán & Pons (2011)that the rise of global institutions has seen a dramatic improvement in globalization. Compared to multinational companies organizing private exchange, global institutions do organize and discipline the international face of national policies. These institutions do consolidate commitments that aim at liberalization of international trade and market by forming a unilateral policy. References Read More