Globalization

Presented To:
PROF. CH. Abdul Khaliq
Presented By:
Muhammad Umer MC16-264
Talha Tayyab Sultan MC16-263
Tahir Naveed MC16-274

Globalization Definition
• - “Processes by which
goods, services, capital,
people, information, and ideas
flow across national borders.”

Globalization Involving Us All
• Nearly 23 trillion dollars
accounts for the total value
of imports/exports that cross
national borders each year.
• Your Everyday Life:
– Wake up to a GE alarm clock
made in China
– Slip on Adidas sandals made in
Indonesia
– Put your American Eagle clothes
on from Mexico
– Unplug your Nokia phone made in
the U.S. and Taiwan
– Hop into your Toyota made in
Kentucky
– Listen to Coldplay from England
– Grap a Starbuck’s coffee with
beans harvested in Columbia
Wild, J., Wild, K., & Han, J. (2008). International Business: The Challenges of Globalization. Upper Saddle River, NJ: Pearson PrenticeHall.

Globalization (Continued)
Two Characteristics: Two Forces:
Falling Barriers
to Trade/
Investment
• GATT
• WTO
Technological
Innovation
• Internet
• Communication
• Transportation
Denationalization- national
boundaries becoming less
relevant.
Internationalization- entities
cooperating across national
borders.
Wild, J., Wild, K., & Han, J. (2008). International Business: The Challenges of Globalization. Upper Saddle River, NJ: Pearson PrenticeHall.

Globalization (Continued)
Top Ten Globalized Countries
Series1
Wild, J., Wild, K., & Han, J. (2008). International Business: The Challenges of Globalization. Upper Saddle River, NJ: Pearson PrenticeHall.

Key Players:
They are-
• Multinational firms which carry out business across
the national borders.
• The World Trade Organization (WTO)through which
international Trade agreements are Negotiated &
enforced.
• The World Bank & International Monetary Fund (IMF)
are means to assist Govt .in achieving development
aims through the provision of loans, technical
assistance.

STAGES IN GLOBALIZATION
• Domestic company links with dealer & distributor.
• Company does the activities on its own. Company
begins to carryout its own manufacturing , marketing
& sales in the foreign markets.
• Company starts full-fledged operations including
business systems and R&D. At this stage the
managers are expected to perform the tasks which
they were doing in domestic markets to replicate
them in foreign markets.

Conditions for globalization
• Business Freedom-No unnecessary Government
restrictions like restriction, restrictions on sourcing
of funds and other factors from abroad. Hence the
liberalization is the 1st step towards facilitating
globalization.
• Facilitators-Infrastructure facilitation available at
home country an help entrepreneurs go globally.
• Government support –Government support available
in the form of policy & procedure reform encourage
globalization

Continue…
• Resources-Resources is an important factor which
decides the ability of affirm to globalize. They include
finance ,technology, brand image, company’s image,
managerial expertise etc.
• Competitors- This is an important factor which
company’s success in global market bank on. The
factors like low costs& price, product quality, product
differentiation, technological superiority. After sales
service, market strengths etc. are few to name.

The Difference Between
Competing Internationally & Competing
Globally
A company will start to compete internationally by
entering just one or maybe a select few foreign
markets. Competing on a truly global scale comes
later , after a company has established operations
on several continents & is racing against rivals for
global market leadership.

Causes of Globalization:
1. Improved Communications
• The development of communication
technologies such as internet, email and mobile
phones have been vital to the growth of
globalization because they help MNCs to
operate throughout the world.
• The development of satellite TV channels such
as Sky and CNN have also provided worldwide
marketing avenues for the concept and
products of globalization.

2. Improved Transport
The development of refrigerated and container
transport, bulk shipping and improved air
transport has allowed the easy mass movement
of goods throughout the world. This assists
globalization.

3. Free Trade Agreements
• MNCs and rich capitalist countries have always
promoted global free trade as a way of
increasing their own wealth and influence.
• International organizations such as the World
Trade Organization and the IMF also promote
free trade.

4. Global Banking
• Modern communication technologies allow vast
amounts of capital to flow freely and instantly
throughout the world.
• The equivalent of up to $US1.3 trillion is traded each
day through international stock exchanges in cities
such as New York, London and Tokyo.

5. The Growth of MNCs
• The rapid growth of big MNCs such as Microsoft, McDonalds
and Nike is a cause as well as a consequence of globalization.
• The investment of MNCs in farms, mines and factories across
the world is a major part of globalization.
• Globalization allows MNCs to produce goods and services and
to sell products on a massive scale throughout the world.

The Effects of Globalization:
1. Changed Food Supply
Food supply is no longer tied to the seasons. We
can buy food anywhere in the world at any time
of the year.

2. Division of Labor
Because MNCs search for the cheapest locations to
manufacture and assemble components, production
processes may be moved from developed to developing
countries where costs are lower.

3. Less Job Security
• In the global economy jobs are becoming more
temporary and insecure.
• A survey of American workers showed that people
now hold 7 to 10 jobs over their working life.

4. Damage to the Environment
• More trade means more transport
which uses more fossil fuels and
causes pollution.
• Climate change is a serious
threat to our future.

5. Cultural Impact
Websites such as YouTube connect people across the
planet. As the world becomes more unified, diverse
cultures are being ignored. MNCs can create a
monoculture as they remove local competition and
thereby force local firms to close
Replacing

Globalization and Marketing
• Expands the market in
which consumers buy
from
– Access EBay sellers from
across the globe.
• Two Strategies for
Businesses:
– Global Strategy
• Reduce marketing costs by
standardizing product and
marketing strategy
– Multi-National Strategy
• Adapt products and
marketing strategies in
each national market to
suit local preferences
Wild, J., Wild, K., & Han, J. (2008). International Business: The Challenges of
Globalization. Upper Saddle River, NJ: Pearson PrenticeHall.