Impact of Globalisation on International Businesses and Consumers

Running head: INTERNATIONAL BUSINESS ENVIRONMENT
PGBM04 International Business Environment
Student’s name:
Name of the university:
Author’s note:

1INTERNATIONAL BUSINESS ENVIRONMENT
Table of Contents
Introduction......................................................................................................................................3
Concept of globalisation in business...............................................................................................3
Theories of globalisation and internationalisation...........................................................................4
Globalisation means for societies and for government....................................................................7
Critically evaluate the impact of globalisation on international businesses....................................8
Features of international businesses:...........................................................................................8
Reasons behind the MNEs internationalisation...........................................................................9
Modes of internationalisation....................................................................................................11
Critically evaluating the impact of globalisation on consumers....................................................12
Conclusions....................................................................................................................................14
Reference List................................................................................................................................15

2INTERNATIONAL BUSINESS ENVIRONMENT
Introduction
Globalisation has brought greater interconnectedness among the markets and it has also
increased the awareness and communication of business opportunities in foreign countries. As
stated by Law et al. (2015), investors now have the investment opportunities in greater distances
and globalisation has opened up for the profit opportunities for small and large business by
improving the communication technologies. Globalisation has made it possible to make better
international relations to unify the economies through increased trade and investment. The
purpose of the paper is to explore the impact of globalisation on international businesses and
consumers in developed and emerging economies. In the first part of the paper, theories of
globalisation and international business are explained to show the process of doing the business
in foreign markets. In the following part, this paper critically evaluates the influence of
globalisation on international business along with showing the reasons behind business want to
do business in international market and modes of entry in the international market are also
shown. This paper is also discussed about the impact of globalisation on business in both
developed and emerging economies.
Concept of globalisation in business
According to Mowforth and Munt (2015), globalisation is about deepening and
increasing the interactions between the individuals and organisations across the world. Products
and services in previous time were available within just one country; however, the organisations
go new market outside the country. Globalisation has affected the business by increasing the
competition and companies have now broadened the target market by expanding the local areas
apart from the home countries (Coker 2014). Globalisation has made possible to market the

3INTERNATIONAL BUSINESS ENVIRONMENT
products and services to different countries and the companies need to fight strong competitors in
the foreign market as well. The companies also do the outsourcing and the companies also seek
for the production locations and the many of the international businesses make partner with new
ventures as well. Globalisation has induced improved technologies and efficiency in the
business. As stated by Wright (2016), globalisation has pushed the business to create the better
system to measure and track the international trade and the businesses. Technological innovation
makes it easier to do the business in an efficient environment and technology empowers global
trade. In the international market, globalisation represents the integration of the investment,
trade, information, cultures and technologies. The international businesses must follow the
government policies which are designed to open the foreign economies to boost the improvement
of the poor economies and raise the standard.
Theories of globalisation and internationalisation
Vernon’s Product lifecycle
Raymond Vernon discussed Product Life Cycle Theory to explain the pattern of
international trade. Product life cycle theory applies mainly on the labour saving and capital
using products which mainly cater to the international market to high-income groups. In product
lifecycle theory, there are five stages and location of production mainly depends on the stage of
the cycle.
In the international market, the company introduces the new product in the foreign
market and the customers are not aware of the products. In order to create demand, the
management promotes the products to stimulate the sale.