Globalization of Markets and Its Impact on Business Expansion: A Case Study of East Coast Limited

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Financial Markets and Economic principles
Name
Institution

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Introduction
Globalization of markets has revolutionized the world of business in this century. It has
positively affected the economic processes, transactions, and investors in a broad
perspective. Despite its diverse opportunities, it objects the usual norms and behavior thus
requires a different mindset. According to Zou (2001) was in a dilemma of whether global
marketing affects the organization's overall performance.
Globalization marketing is the act of an organization with an aim of focusing its
operations and resources on the global market in order to harvest the opportunities
attached in the international marketing arena (Zou, 2001). East Cost Limited has realized
these kinds of opportunities and now they have the plan of not only exporting their
products but also to establish another production base in an overseas country. According to
Gillespie (2007), nowadays nearly every organization should compete in the international
marketplace to gain a competitive advantage.
Expansion is the ideal goal for any business organization. A business initially starts with a
small production index due to inconveniences such as little start-up capital and minimal
knowledge about the market. Like in the case of ECC, it was limited in capital thereby
relying on shares from board members and private investors. With the drive of stable
management, it prospered greatly in the coal production industry which made them acquire
two extra mines, therefore, expanding their empire in the region.
As a result of a prosperous regional expansion, ECC started exporting coal to foreign
countries which had to be transported to the shipping facilities. This was a positive trend

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though it was faced by a number of challenges. Transporting tons of coal to the offshore
became more expensive due to government interference on imposing a tax.
With a concern ongoing international, ECC has two options; to purchase a coal mine in
Indonesia or to diversify its resource production by merging with a gas production
company based in Australia (Cho and Kang, 2001). These two considerations are briefly
discussed in this paper.
Acquiring a coal mine in Indonesia v/s Partnership with a Gas Company
A mechanism that can see into rapid development of a company in the global market isby
forming relationships with the other companies in different countries (Aaker, 2010)
although globalization is associated with the following issues.
Issues in global markets
There is non-specification of countries. Globalization is viewed from a broad perspective.
You will hear someone saying I am shifting to Africa; the problem is they don't say which
country in particular. The advantage ECC has is that it already knows the specific country
it has to operate from (Indonesia). Expanding into other countries builds customer
confidence since it’s very difficult for it to collapse (Chae, 2000). For this reason, the
company will maintain both local and international customers hence inviting more
investors to finance its operations although one has to know specifically where he/she is
going to set the business.
Even though globalization will make a company be able to negotiate contracts using a
common currency (USD) that is very difficult to fluctuate as demonstrated by Sheth