drivers of globalization in the business sector

drivers of globalization in the business sector

Globalization is defined as the movement of goods and services, people, information, and technologies freely across the borders of all nations without any interference. It aims to make markets more efficient, increase competition limits military conflicts and ensures equal distribution of wealth hence benefiting individual economies around the world. Its major drivers include; market drivers, technological drivers, cost drivers, government drivers and competitive drivers. Therefore this discussion is based on the drivers of globalization in the business sector today to determine how it is useful to the nations, industries and consumers.

Market drivers are significant factors that have enhanced globalization. They are the major forces that drive consumers to purchase products and services. One aspect of market drivers to globalization is the constant availability of customer needs. Due to the increasing demand for similar goods and services by consumers from different nations, opportunities for standardized marketing products arise. Global consumers are considered under the market as a driver to globalization. Some large industries always demand the same quantity and quality of products and would be ready to purchase them irrespective of where they are found or offered. In most industries, global distribution channels are emerged to the satisfactory of an increasingly global customer base, resulting in more demand by customers. Lastly, as consumption patterns become more comparable, branding and marketing of the global industry become very crucial to the industry’s success. The saturation of domestic markets day by day has led to limited opportunities for the growth of enterprises. Therefore most organizations tend to overcome this unhealthy situation by joining the expanding global market. The typical consumer needs and the opportunity to use global marketing channels, together with the availability of a transferable market, also provide some reasons as to why other organizations choose international trade. For instance, due to the demand for Toyota products in the global market, the company in the past few years has constructed several factories in other countries to increase production and meet consumer demand. They have also embraced the joint ventures with nations such as the United States Australia Zimbabwe etc. All these dealings lead to the improvement of the globalization industry.

Technology is one of the critical factors of the improvement of incomes and standards of living in the world today. It has framed and placed the foundation for modern globalization. Technological use has helped in conquering the vital barriers of both globalization and international trade. These barriers include the cost of transportation, absence of proper ethical standards, trade barriers and language barriers, and many other factors. Therefore it’s through the rapid growth of global markets that technology spreads to other parts of the world. Technological advancement as really helped in facilitating the growth of globalization, though, through globalization, this advancement has been realized by other nations. Today many markets have developed into the global at a fast rate, as stated by several kinds of trade expanded to foreign countries. Inventions and innovations in a host country are often taken up by MNC(s) based in one country but have expanded to other countries due to technological advancement through FDI. Most industries in the world have developed due to the use of newly invented and innovated machines. The use of computers with installed communication systems in these companies has helped in the reduction of communication cost .the production in these companies majorly is doneh by newly invented machines, thereby increasing the rate of production and the quality of products taken to global markets. For instance, the rapid growth of the internet has led to the creation of global business and e-commerce. Through e-commerce, consumers can view and choose their preferences, online make an order and wait for the delivery to their preferred destination.

Government drivers is another factor that has led to the improvement of the globalization scale. It includes factors such as trade policies, whether favourable or not, technical standards, political rules and regulations, cultural values and preferences and government-operated or the consumers. These factors affect the most bit of the global strategy and, therefore, are very significant in shaping the globally competitive business surroundings for industries. In recent years, multinationals used the negotiation method with the governments to enhance better rules and regulations for worldwide completion. The negotiation system s since changed today as the multinational companies pay more attention to the non-market dimensions of their global approaches aimed at shaping the global competitive environment to their advantage. Therefore, due to these favourable policies and standards, underdeveloped countries have gained some development brought by other developed countries either by FDI or through subsidiaries. Entry into these markets becomes more natural when all government factors are favourable to other firms. For instance, the American coca cola company is a multinational corporation that as its branches in many nations. the entry into these countries has been more accessible due to the favourable trade rules set by these countries. The introduction of Coca Cola Company into these markets as brought about the satisfaction of consumers and improvement of the standards of living to the citizens, i.e. provides employment opportunities.

Competitive drivers have also brought a significant impact in the globalization industry. Competitors from different continents, the interdependence of countries, competitive diversity and high exports and imports have increased the ability of the globalization industry. The sales in the global market are determined by export and import volume, variety of competitors and the extent to which the market has been globalized. Every organization that presents its products and services to the global market as its characteristics. Therefore companies that produce the same goods or rather substitute goods must always be keen on each other’s ways of production. In case of a change in the globalization industry, competitors must respond to the transition to enhance and safeguard their competitive advantage.

To some extent, this has resulted in the acceleration of the globalization industry. The competitive factor has also enhanced the release of better quantity and quality of goods and services, thereby increasing the demand by consumers. For instance, toothpaste is one of the products offered in the global market by different companies. The Colgate Company and the Close up company, for example, must always ensure that they respond very quickly to the changes in the industry to maintain their competitive advantage.

In conclusion, the above drivers have played a significant role in the improvement of the globalization industry. The industry has brought relief to consumers who were being exploited by monopoly markets. It has let to standardized ethical standards and rules and regulations that govern the global market, leaving no room to the exploiters. It has also lead to the growth and development of both small and large companies that sell their products. Therefore all companies that have not joined should consider doing so for the betterment of their organization.