Impact of Globalization in Today’s Business

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Globalization has risk and benefits as well when it comes to crossing the boundaries of a nation and has a huge impact on the overall profitability and productivity of the business. It can be beneficial for the companies as it can bring new technologies and also helpful in the overall economy as it brings job opportunities. This has led to an increased standard of living. The main purpose of globalization is to enhance individual’s economy, increasing the competition by entering into new markets, lowering the military conflicts and expanding the economic wealth of the nation. Moreover, globalization has positive as well as negative impact on the today’s business. It can be noted that doing business internationally can be offensive as well as defensive play. Further, globalization can enhance the marketplace of the business and helps in reaching majority of customers abroad. Therefore, this ultimately helps in increasing the revenue. Globalization has negative impact as well. In today’s business, there is high competition and if the business is not able to satisfy the customers, then the competitors will take the advantage and establish the brand loyalty. Also, the companies have following impact of globalization: Technology, Knowledge, Consumer Demand.

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RUNNING HEAD: GLOBALIZATION 0
Globalization
Student’s Details-
AUGUST 31, 2019

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GLOBALIZATION 1
Impact of Globalization in Today’s Business
Globalization has risk and benefits as well when it comes it comes to crossing the boundaries of
a nation and has a huge impact on the overall profitability and productivity of the buisness (Hirst,
et al., 2015). It can be beneficial for the companies as it can bring new technologies and also
helpful in the overall economy as it brings job opportunities. This has led to an increased
standard of living. The main purpose of globalization is to enhance individual’s economy,
increasing the competition by entering into new markets, lowering the military conflicts and
expanding the economic wealth of the nation (Kuepper, 2019).
Moreover, globalization has positive as well as negative impact on the today’s business. It can be
noted that doing business internationally can be offensive as well as defensive play. Further,
globalization can enhance the marketplace of the business and helps in reaching majority of
customers abroad. Therefore, this ultimately helps in increasing the revenue. Globalization has
negative impact as well. In today’s business, there is high competition and if the business is not
able to satisfy the customers, then the competitors will take the advantage and establish the brand
loyalty. Also, the companies have following impact of globalization:
Technology
In today’s business technology has a major role when the companies are going for the
globalization. It leads to gaining of new technology which can help in taping of new
opportunities (Nikolova, et al., 2017). Technology brings new ways of doing business which can
benefit the company in many ways. By taking the case situation of Rio Tinto which is the one of
the largest mining companies of Australia, the company has made outsourcing partnership with
CGI group. This has given huge opportunity for the company to take digital transformation
initiatives. As a result of the partnership, the company updated their technologies and also
integrated their management perspectives.
Knowledge
Globalization has led to exchange of knowledge from one country to another. Globalizing the
products helps in getting knowledge required for expanding the business. Knowledge regarding
the trends, the latest techniques and operating processes are required by the business to be ahead
of the competition (Oshri, et al., 2015). Similarly, Rio Tinto had outsourced their services with
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GLOBALIZATION 2
CPA global for the purpose of saving legal cost of the company. CPA global has provided legal
services to Rio Tinto during the global crisis under the agreement. Thus, it had proved that the
company got knowledge of legal proceedings and formalities that could help the company in
future.
Consumer Demand
Globalization facilitates the businesses to meet consumer demand and has huge impact on the
profitability of the firm. Nowadays customers are moving towards the brand and have
preferences of the established brand name which has global operations.
However, globalization can provide opportunity overcome the competition. Outsourcing can help
in the globalization. Today, companies are highly benefitted by the outsourcing as it provides an
opportunity to share manpower, management and technology. It helps in overcoming
competition and supporting each other through combined capabilities. Moreover, the
globalization has many challenges into the market. Today, the companies can face problems due
to changes in the environment and also changes in the policy structure of the government. This
can be a very risky situation for the company when they globalize their business as it can directly
impact their profits. Similarly, Rio Trio has faced many challenges in the process of
globalization of Iron Ore in the mining industry. Due to changes in the business environment, the
demand of iron ore increased faster than the supply and ultimately the company was compelled
to increase the prices (Bhattacharyya & Deepak, 2012). Therefore, it can be said that
globalization has many benefits but it is risky approach for reaching the global trends and has
huge impact on the today’s business.
References
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GLOBALIZATION 3
Bhattacharyya, S. & Deepak, P., 2012. Comprehending the changing global iron ore trade
service system and the dynamics of pricing. International Journal of Business and Globalisation,
9(1), pp. 70-89.
Hirst, P., Thompson, G. & Bromley, S., 2015. Globalization in question. s.l.:John Wiley & Sons.
Kuepper, J., 2019. The Impact of Globalization on Economic Growth. [Online]
Available at: https://www.thebalance.com/globalization-and-its-impact-on-economic-growth-
1978843
[Accessed 31 August 2019].
Nikolova, L., Rodionov, D. & Afanasyeva, N., 2017. Impact of globalization on innovation
project risks estimation. European Research Studies, 20(2), p. 396.
Oshri, I., Kotlarsky, J. & Willcocks, L., 2015. The Handbook of Global Outsourcing and
Offshoring 3rd Edition. s.l.:Springer.
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