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Impact of Globalization in Business Context


Impact of Globalization in business context

Word Count 3109


Executive Summary

Task one

Drivers of globalization and the influence of regional economic corporations and global/regional trade agreements on globalization

Why do desirable and salutary products contribute to sustainability in the global markets?

How have invention and innovation in global marketing become an essential component of global marketing plans?

Impact of culture in the multi-domestic approach to global marketing.

Task Two

Internationalization of McDonalds

How the company made use of innovation and cultural management for sustainability

McDonalds, the Challenges and recommendations


Additional information


Executive Summary

The world is currently evolving at an unimaginable rate. The consumer overall is becoming more similar, and more alike, with needs that evolve along with this in a rapid rate. The previous barriers to business such as geographical boundaries, are currently redundant. There a powerful force at work, that is driving the world towards a phase of a corporate reality where the needs and wants of the global consumer is converged. Levitt (1993) defines this as technology.
This report will take an in depth look at how the drivers of globalization have evolved from 1993 to the current context, discussing factors such as regional corporation, innovation, sustainability and culture. The report will go on to take a more analytical look at the drivers of globalization from an organizational perspective, using the global fast phenomena, McDonalds as an example.

Task one

Drivers of globalization and the influence of regional economic corporations and global/regional trade agreements on globalization

Bang and Markeset (2011) offers two distinct definitions of globalization. One is the view of globalization as a process, where integration of global economies is accelerated. The second definition revolves around defining globalization as a means of competition, where Porters forces of competition is used as a base to define globalization as a phenomenon that expands an industry rivalry from its industry to the entirety of its value chain.
In identifying the drivers of globalization, the lowering of communication and transportation costs as well as the development of technology are identified as key defining drivers (Bang and Markset, 2011). Evolving from the silk route to the 24- hour online delivery mechanism, the sheer impact of communication and technology on driving globalization are evident.
Another key driver identified is the lowering of trade barriers. The IMF states that a lowering of trade barriers to expand world trade is a core element of globalization. This is simply not limited to the lowering of tariffs but an attachment of national economies to global trade in a manner in which international investments, knowledge sharing, and collaborative working are encouraged (IMF, 2017).
Sideri (1997) redefines globalization as process, that is mainly driven by economic forces. This would mean that instead of access to an open market, it’s a process which looks at reorganizing a product to suit global tastes, international trade to get this across to the global market and in the ability to integrate this trade into a financial market. The aspect of international trade and an international financial market, is driven by regional economic corporations and trade agreements such as EU, SAARC, WTO and SAPTA (Buckley and Ghauri, 2004). Regional economic integration such as these trade agreements and corporations are seen to increasingly become drivers of integrating the goods and service markets at a regional level (Chapman, 1999; Raines and Wishlade, 1999). However, the labor markets, which is yet another key market in driving globalization and is as equally important as the goods and services and financial markets are still nationally driven and are not regionally integrated (Buckley et al, 2001). This is an area of focus that is not covered by these trade agreements.
Trade agreements and measures for regional corporation has allowed for the free flow of goods and services, as well as information and talent in a globalized context. For example, the EU allowed for the members of the union to have access to a wider and more diverse market, opening a larger market base to businesses. Lack of barriers in terms of transportation enabled for the delivery of goods and services in an immediate manner leading to the satisfaction of the immediate gratification economy (Buckley and Ghauri, 2004). This has enabled the development of ecommerce-based business models such as ebay and Alibaba, which are amongst the largest organizations in the world. In short, trade agreements and regional corporations have allowed for globalization to accelerate in a phenomenal manner by facilitating the free flow of goods, services and personnel amongst predefined geographical boundaries.