Economics of Globalization: Capilano's Expansion to France or South Korea

Running head: ECONOMICS OF GLOBALIZATION 1
Economics of globalization
Name
Institution

ECONOMICS OF GLOBALIZATION 2
Economics of globalization
The sensation of globalization is having a high impact on the food systems in global
trade. Forces exhibited by globalization, for instance, capital flow, urbanization, and trade
liberalization have not only transformed the nature of food systems by increasing affordability,
diversity and accessibility of food but also has changed its quality and nutritional value. Honey is
the most preferred natural sweetener is contributing billions of dollars each year to the global
trade. Owing to the diverse use of its productions, the universal consumption of honey is so
enormous that supply can hardly cope with demand. This occurrence has lured many
entrepreneurs into the business promising and lucrative margins. The phenomenon of open
economies across the world has mostly curtailed honey business operations which warrants an
analysis of the marketing setting in any particular country before launch. As for Capilano, the
market leader of honey business in Australia, the strategic decision on whether to expand to
either France or South Korea can only be made by studying the economic, political and business
environments in this area.
The economic environment is mainly constituted by external (macroeconomic) factors
that affect the buying habits of households and businesses, such as employment, income, interest
rates, inflation, wealth and productivity. Regarding economic freedom score, France has been
scored at 63.8, making its economy the 71st open in the 2018 Index (Europium Commission,
2018). Its overall score has improved by 0.6 points, with enhancements in the ratings for fiscal
health, investment liberty, and business freedom overshadowing reduction in property rights and
government integrity. France’s key economic policy challenges are to lower the stubbornly high

ECONOMICS OF GLOBALIZATION 3
unemployment rates, increase economic growth, improve public finances and bolster
competitiveness. On the other side, the economic freedom score of South Korea’s is 73.8,
making its economy the 27th open in the 2018 Index. Its overall rating has reduced by 0.5 points,
with a steep deterioration for the government integrity indicator overshadowing an improvement
in investment liberty (the Heritage Foundation., 2018). South Korea is placed 7th out of43 states
in the Asia–Pacific region. Additionally, the new South Korean government has embraced an
ambitious demand-driven economic policy agenda that stresses income-led growth and populist
spending through measures targeted at improving debt burdens for consumers, increasing the
minimum wage and raising taxes on the wealthiest and corporations.
Political environment entails government actions which influence the operations of a
business or a company. These activities may be on the domestic, regional, or international level.
Regarding political setting, France offers a moderately stable business setting to businesses
compared to South Korea. In connection with this, the GDP output of France is the 5th biggest in
the world, implying that France is a large consumption zone in itself (Startin, 2013). According
to the Heritage Foundation (2018), France is a top political force in the European Union and a
major international actor, a lasting affiliate of the UN Security Council. After the deliberate
economic stabilization (2017-2018), a stronger economic development might be predictable in
the country, further inspiring foreign direct investment inflows. South Korea on the other side is
not that stable. Since 2012, the economic growth of South Korea has been somewhat stagnant
because of both cyclical impacts and a steady weakening in the growth potential of the country
(EIU Digital Solutions, 2018). In 2017, economic constraints were emphasized by a worsening