HI5016: International Trade and Globalization Effects Report

This report examines the impact of globalization on international trade, focusing on how it affects various industries, particularly retail and manufacturing. It delves into the positive aspects, such as increased market expansion, access to new technologies, and improved standards of living, alongside the negative aspects, including increased competition, wage stagnation, and job losses due to outsourcing and offshoring. The report analyzes specific examples, such as the contrasting experiences of Woolworths and Coles in the Australian market, and provides a comprehensive overview of the complexities of globalization and its effects on businesses and economies, supported by facts and figures from various sources.

Running Head: International trade 0
International Trade

International Trade 1
Executive Summary
International trade is vital to the procedure of globalization. Over many years,
administrations in many countries have gradually opened their markets to global trade,
whether through the multilateral trading framework, improved regional association or as part
of national reform programmes. Exchange and globalization more commonly have brought
vast benefits to many companies, countries, and citizens. Globalization has upraised
productivity, maintaining the spread of awareness and new technologies, and developed the
range of varieties available to customers. It has profited from economic strategies favouring
deregulation and the decrease or eradication of restrictions on global trade, foreign
investment, and monetary transactions. Further points have been discussed as of how it has
affected companies and their positive and negative effects.

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Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Globalization Affect industries..................................................................................................3
Positive aspects..........................................................................................................................4
Negative aspects.........................................................................................................................5
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction
Globalisation is the procedure of interaction and reconciliation between people,
organization, and governments of different nations around the world. It is a procedure
determined by international trade and investment assisted by information technology.
Globalization has developed due to advances in communication technology and
transportation (Yirmibeşoğlu, 2015). With expanded global interactions comes the
development of international trade, thoughts, and culture. The advancement of digital
communication has opened up independent companies to an international market that they
can reach through online platforms, mobile marketing campaigns, and website contents. In
the following report, an effort has been made to discuss the countries affected by it, positive
and negative aspects, and relate it with real-life examples (Baylis, Smith & Owens, 2017).
Globalization Affect industries
Globalization is affecting the retail industry in relation to competition, culture, and
outsourcing. Every marketplace has immensely different demands, guidelines, culture, and
customers’ perceptions and interests. The worldwide retailers should appreciate the
customers’ tastes and their benefits; therefore, they are capable to expand worldwide
emerging markets. The worldwide retailers should discover the competitive benefits .The
successful worldwide retailers should comprehend their potential customers and deliberate
how to against the competitors from diverse countries. Resourcing is becoming a worldwide
trend that the global retailers have more intended for transferring evidence and
communication. It is also distressing the manufacturing industry as Free Trade Settlements
help to generate equal and open entrance to markets for the customers in participating
countries. Such contracts are also meant to help all countries elaborate by creating greater
monetary opportunities for exporters, manufacturers, and material suppliers (Jensen, Quinn &
Weymouth, 2017). It continues to make conceivable the global exchange of new
technologies, finished goods and even new concepts. Retail industry as Coles business, which
is persisting in Australia market that has a positive or negative effect on the undertakings. It
is the substantial way to advance the Coles reliability in the market. Indeed, globalization is
the procedure of abroad amalgamation from interchanges of perspectives, ideas, products and
other aspects of the culture. Worldwide retail and customer service organization have started

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a business in Australia market that influenced Coles sales volume and business model
(Morgan, 2015).
Globalization has also affect Woolworths sales growth, margin expansion, M & A and
capital management. They have enhanced concentration on the customer, integrated,
technology to an associated retail experience. Globalization has conveyed about more
prospects for trade, and countries that opened their doors to these overseas investments are
able to earn more revenue. In this way, globalization affects industries in pursuit of market
expansion (Weebly, 2018).
Positive aspects
Globalization has created and prolonged foreign trade in the world through these
countries can transfer their goods to other countries and control the trade activities of the
nations in the world so to have fair trade. It has benefited to retail industry as opening of trade
with evolving nations produced a new era of reasonable manufacturing created on the low
wages paid in those nations. The tremendous development in offshore manufacturing assisted
to increase the standard of living in evolving nations, generating a new customer market for
U.S. brand-name vendors and emerging businesses (Grimmer, Miles & Grimmer, 2015). As
Woolworths have crushed, Coles with a 15 percent hike in profit for the first off the back of
robust supermarket sales development that again exceeded its archrival, Coles. Since the
second quarter of 2016/17, Woolworths’ sales have been increasing at a quicker pace than
Coles and this contributes a main sign it is winning consumers over after sheeting down more
than $1 billion into lowering costs and boosting client services (Barendse, Basson, Petersen
& Sink, 2018).
With the assistance of globalization, delivers benefits to manufacturing industry as
well. It aids to improve a country’s balance of payments. In turn, this external orientation
often supports domestic companies become more aware of global opportunities. They also
encountered a substantial flow of FDI, technological inflow, and the chance to serve a
considerable customer base in the business. It has permitted accessing new markets, which
prompted an increase in manufacturing and employment. It nurtures international trade and
aid in an expansion of GDP that helped a sizable portion of the populace to join the positions
of the middle class (Thorlakson, Hainmueller & Lambin, 2018).

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Negative aspects
Globalization is a fault of the world's joblessness condition though it brought a few
jobs prospects. There are negative aspects in the retail industry as it could upturn competition
in the market between the foreign and domestic companies. This reduced the market share,
profitability, and earning. Economical labour offshore has also had a diminishing effect on
earnings in the U.S., providing consumers less money to devote on retail items, which
energies them to the retail chains that can deal lower prices than can small autonomous
stores. Coles have not enjoyed the benefits of globalization as their financial earning fell from
13 percent to $1.6 billion as it has expended more than 200 million cutting costs to contend
Woolworths. As the main reason was wage stagnation in which the wages of individuals
belonging to the lower-income group and the white collar class did not expressively increase
over the most recent few decades as some of their occupations have been progressively under
threat of being outsourced (Garefalakis, Dimitras & Lemonakis, 2017).
There are negative aspects in manufacturing industries, as it does not protect the
labours from exploitation while empowering employment opportunities and wage increments
among the labours in the middle class and lower-income sets. The loss of employment is
because of offshoring and outsourcing that has considered in the last few decades which
needs to be stopped or overturned for globalization and international trade to be
governmentally popular among the public (Daly, Pouder & McNeil, 2017).
Conclusion
According to the scenario Globalisation recommends a world in which all goods and
services could be suddenly supplied from one country to another. The vast mainstream of
economic exchanges takes place within national limitations. International trade is a small
amount of world trade which is created and consumed within the country. It has been
contended that globalization has become an influential source and has a major effect on
companies’ market expansion and profitability. It is also asserted that Woolworths have
gained and Coles have not enjoyed the benefits of globalization. The challenge of the period
is to make globalization work towards worldwide prosperity through disaggregate
improvement.

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References
Barendse, J., Basson, J., Petersen, S. L., & Sink, K. J. (2018). The sustainable seafood
movement viewed as a maturing social-ecological issue using a South African case-
study. Ocean & Coastal Management, 151, 178-192
Baylis, J., Smith, S., & Owens, P. (2017). The globalization of world politics: an introduction
to international relations (7th Ed.). U.K: Oxford University Press.
Daly, J. P., Pouder, R. W., & McNeil, C. R. (2017). Effects of explanations communicated in
announcements of alleged labour abuses on valuation of a firm’s stock. Corporate
Communications: An International Journal, 22(1), 93-112
Garefalakis, A., Dimitras, A., & Lemonakis, C. (2017). The effect of Corporate Governance
Information (CGI) on Banks’ reporting performance. Investment Management and
Financial Innovations, 14(2).
Grimmer, L., Miles, M. P., & Grimmer, M. (2015). A research note on the effect of
entrepreneurial orientation on small retailer performance: a resource-advantage
perspective. International Entrepreneurship and Management Journal, 11(2), 409-
424
Jensen, J. B., Quinn, D. P., & Weymouth, S. (2017). Winners and losers in international
trade: The effects on US presidential voting. International Organization, 71(3), 423-
457
Morgan, R. (2015). The ALDI effect: Australia’s changing supermarket scene. Retrieved
from: http://www.roymorgan.com/findings/6297-aldi-effect-australias-changing-
supermarket-scene-201506220132
Thorlakson, T., Hainmueller, J., & Lambin, E. F. (2018). Improving environmental practices
in agricultural supply chains: the role of company-led standards. Global
Environmental Change, 48, 32-42
Weebly. (2018). The Australian Food Industry –Retail Sector: Woolworths. Retrieved from:
https://retailsector-woolworths.weebly.com/impact-on-the-economy.html

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Yirmibeşoğlu, G. (2015). Globalization and international trade. International Journal of
Social Sciences and Education Research, 3(5), 1787-1796