Globalization According to the Levin Institute, the term globalization refers to the increasing connections people, companies and states are forming around the world. The process of forming social and economic ties across vast distances is nothing new historically; however, technological improvements and liberal trade agreements have increased these connections greatly in contemporary times. Market Drivers One of the primary drivers of globalization has been in respect to market forces, whereby many consumer goods and services are now universally available, no matter one’s geographic location or social setting. As a result of international marketing campaigns and corporate brand promotions, consumer desires and lifestyles around the world are increasingly converging.
Wow, two brain-tickling hours of input from some brilliant speakers. My colleague Alison Bass will soon fill you in on Paul Saffo’s and Martin Wolf’s talks, but let me just clear up one mistake I made in my last post. Wolf’s talk was not the sanguine-sounding 'Why Globalization Can Work,' but rather 'How Globalization Works,' a much more astringent dose of reality! What a difference a few words can make. With loads of charts and graphs, Wolf talked about the five drivers of globalization, and the five threats to globalization, the latter all coming under the umbrella of 'the human capacity to screw up,' which in his fine British delivery he called 'nigh on infinite.' Saffo talked about the art of forecasting, exhorting listeners to not just absorb passively what professional forecasters put forth, but to start doing their own forecasting.
One bit of advice that was funny and true and backed up by historical example: 'Most ideas take 20 years to become an overnight success.' So, if you want to know what the next big wave might be, look for something that’s been stuggling to gain foothold for a couple of decades.
Be sure to adopt the - and beware the. Get the latest on digital transformation.
The Major Globalization Drivers Include
Stay tuned for more detail from the sessions and wisdom gleaned from hallway conversations. And, stay tuned in the coming weeks as we think we’ll be able to offer podcasts of the talks by Saffo and Wolf.Sandy Kendall.
There are many drivers to the political, social, economic,technological and linguistic phenomenon of globalization. Theseinclude the global standardization of business, products andconsumer expectations from multinational corporations.
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There havealso been the elimination of political borders and barriers such asthrough the European Union and liberalization of visa regimesthroughout the world. Also the internet, English language, andAmericanization altogether remains continuing forces behindglobalization. Exchange rates are a very important part of what is referred to as 'comprehensive income.' Firms are required to recognize exchange rate gains and losses in their financial statements both under Generally Accepted Accounting Principles and International Financial Reporting Standards. In firms that do business in the multi-national arena, these gains and losses can have a significant on cash flow; perhaps more importantly, these gains and losses suggest how well a firm manages its foreign contracts, and how well it understands the economies in which it operates.
As a practical matter, exchange rates impact the Cost of Goods Sold of a firm. Assume for the sake of argument that a firm enters into a long term contract to buy raw materials from a foreign supplier at a fixed price; now assume that the value of the dollar erodes relative to the foreign currency by 10%. The net result is an erosion of the economic value of the contract of 10%. INTERNATIONAL FIRM - simply do import and export - operates in foreign countries through licensing and franchising - managed by nationals of home country - concentrates in some countries or regions. GLOBAL FIRM - invests and is present in many countries - has affiliates, subsidiaries and branches in many countries - draws resources such as labor,capital and materials from a global pool - pursues global business strategy.
Drivers Of Globalization
An International firm can become a global firm by pursuing global business strategy. There are two forces that are driving the outsourcing of goods,services, and target market demographics. The first regardsmacroeconomic industrial restructuring under globalization.
Thishas involved the outsourcing from Western economies to thedeveloping and rising economies. Specifically these have been inthe context of the BRIC (Brazil, Russia, India and China) states.The second force has been seeking decreases in labor cost, throughshifting production to these economies for export. Marketing hascorresponded to these shifts by focusing on these new and emergingmarkets.
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Table of contents 1 Introduction 2 Drivers of Globalization 3 Theories and Models of Gobalization and International Trade 3.1 From mercantilism to Smith and Ricardo 3.2 Ricardo to the next step: Factor Proportions Theory and the Leontief Paradox 3.3 Vernon Life-Cycle Theory 3.4 Porter’s Diamond Approach 3.5 Monopolistic Advantage Strategy 3.6 Eclectic Theory 4. Discussion of Theories and Drivers 4.1 Ricardo-Mill and outsourcing 4.2 Dunning, Cantwell and the influence of technology 5 Bibliography 1 Introduction 'Globalization is not something we can hold off or turn off. It is the economic equivalent of a force of nature - like wind or water.' Bill Clinton (American 42nd US president (1993-2001)) The first part of this research paper will define the major drivers of globalization and then introduce some of the basic and advanced theories of international trade and business. Network marketing tips in hindi pdf.
Main Drivers Of Globalization
With this foundations it will then try to integrate theories and drivers and compare them to the actual situation and discuss if they are appropriately describing what we are seeing today. 2 Drivers of Globalization The media and almost every book on globalization and international business speak about different drivers of globalization and they can basically be separated into five different groups: 1) Technological drivers Technology shaped and set the foundation for modern globalization. Innovations in the transportation technology revolutionized the industry.
The most important developments among these are the commercial jet aircraft and the concept of containerisation in the late 1970s and 1980s. Inventions in the area of microprocessors and telecommunications enabled highly effective computing and communication at a low-cost level.
Finally the rapid growth of the Internet 1 is the latest technological driver that created global e-business and e-commerce. 2) Political drivers Liberalized trading rules and deregulated markets lead to lowered tariffs and allowed foreign direct investments in almost all over the world. The institution of GATT (General Agreement on Tariffs and Trade) 1947 and the WTO (World Trade Organization) 1995 as well as the ongoing opening and privatization in Eastern Europe are only some examples of latest developments. 3) Market drivers As domestic markets become more and more saturated, the opportunities for growth are limited and global expanding is a way most organizations choose to overcome this situation. Common customer needs and the opportunity to use global marketing channels and transfer marketing to some extent are also incentives to choose internationalization. (Ferrier, 2004) 4) Cost drivers Sourcing efficiency and costs vary from country to country and global firms can take advantage of this fact. Other cost drivers to globalization are the opportunity to build global scale economies and the high product development costs nowadays.
(Ferrier, 2004) 5) Competitive drivers With the global market, global inter-firm competition increases and organizations are forced to “play” international. Strong interdependences among countries and high two-way trades and FDI actions also support this driver. 3 Theories and Models of Gobalization and International Trade Theories of International Trade extend to the 15th century and the age of mercantilism. This next paragraph will provide a brief summary of the most important theories and also cover two less popular theories, the monopolistic advantage theory (Kindleberger / Hymer) and the integrated eclectic theory (Dunning). 1 evolved from the military ARPA (Advanced Research Projects Agency) network 1969, which was extended to an university network 1986 and finally became public as the world wide web in 1990, due to Tim Berners-Lee at the CERN institution (Wikipedia, 2005). About GRIN GRIN Publishing, located in Munich, Germany, has specialized since its foundation in 1998 in the publication of academic ebooks and books.
The publishing website GRIN.com offer students, graduates and university professors the ideal platform for the presentation of scientific papers, such as research projects, theses, dissertations, and academic essays to a wide audience. Free Publication of your term paper, essay, interpretation, bachelor's thesis, master's thesis, dissertation or textbook.
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