Impact of Globalisation and Rise of Protectionism

IMPACT OF THE
GLOBALISATION AND
RISE OF
PROTECTIONISM

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
CHAPTER 2- LITERATURE REVIEW.........................................................................................2
Concept of Globalisation........................................................................................................2
Impact of Globalisation process makes the running a business or increases its Profitability.2
Concept of Protectionism.......................................................................................................4
Factors that lead to protectionism...........................................................................................5
Unemployment rate during the Globalisation and during rise in Protectionism....................7
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................9
CHAPTER 4: DATA ANALYSIS................................................................................................10
CONCLUSION AND RECOMMENDATIONS..........................................................................19
REFERENCES..............................................................................................................................20

INTRODUCTION
Globalisation is the process where the different market of the global economy
integrate together to sell and purchase goods and services. It is the inter-connection between
the different national economies. The market where the globalisation is generally includes
that commodity, insurance, money, credit, capital and financial market which includes
coffee, tin, electronics, gold and oil. In the 21st century, the entertainment and sport is also
part of globalisation. Protectionism is the policy made by the country in order to limits the
unfair competition from the different foreign industries. It is generally act made by the
government which make policies and take action to restrain the international trade in order to
protect the local business and job in the global competition. These two factors have the great
impact over the different industries in terms of market share and profitability. For this
project report Marks and Spencer have been selected which is listed in the London stock
exchange and specialised in selling the home products, clothing, food and luxury goods. It is
the first British retailer to make pre-tax profit of more than £1 billion.
Aim
To analyse the Impact of Globalisation and Protectionism on the retail industry: A case study
on Marks and Spencer.
Objective:
 To evaluate the impact of Globalisation process complicates running a business or
increases its Profitability.
 To access the factors lead to rise of protectionism
 To evaluate unemployment rate during the Globalisation and during rise in
Protectionism
Rational
Globalisation is the very important aspect for every organisation to enhance their market
share and profitability. All companies need to sell their products and services to the
international market so that they can compete with the different global firms in order to
increase their quality and customer satisfaction.
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CHAPTER 2- LITERATURE REVIEW
Concept of Globalisation
According to the view of Baylis and Smith, (2017) globalisation is the process from
which regional and national culture, economies and societies are integrated with the help of
international network of transportation, communication, immigration and trade. In the recent
years, globalisation is focusing on the economic side of the world such as international
capital inflow and outflow, foreign direct and indirect investment and trade. More recently it
has been expanded to the technology, media, biological factors, political, socio-cultural and
media. It has been increased by the World War II in the year 1990 and the trade in
international alone have increased from the estimate 100 times from the $95 billion to the
$12 trillion in the last 50 years from the year 1995. In the contradicting view of Crane and
Matten (2016) it is the process of enabling the investment and financial market to operate in
the global market and it is the result of the enhanced communication. It has make the simple
process of doing the business and run the financial market in the international market. It is
the modern communication that have made it possible, for the retail organisation, to deal
with the client in the proper way, call centre have helped them lot. It is the grater trade in the
products and services between the different region and nation. It enhances the transfer of
fund or capital with the help of foreign direct and indirect investment and the Tarns-national
organisation. It helps the global brands to serve their products in the different lower and
higher income countries as well as helps the employees to migrate from one country to other
for higher income. It is fast shifting of the balance of financial and economic power form the
developed to the developing market and economies. It enhances the expenditure on
innovation, infrastructure and investment in all the parts of the world.
Impact of Globalisation process makes the running a business or increases its Profitability.
According to the view of Kraidy, (2017) Globalisation have become the most leading
factor which have become the important concept for every business organisation from the
last few decades. It affects the society, environment, economy and business in several ways
and mostly all the firms have been affected by these changes. These have mostly enhanced
the competition and have rapid change in the data transfer and information technology. In
the contradicting view of Crane and Kawasaki, (2016) Globalisation have leads to increase
in the competition level which can be in terms of products, services, price, cost, technology
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adoption, fast production and feedback, target market etc. it is very significant for every
business to find the need of globalisation. The business need to make the effective and
efficient strategies so that they can promote their products and services to the different
foreign market as well as in the home countries. For the different organisation, it is
significant to understand the various needs and demand of the different customers around the
world in order to creates the global marketing mix of product, price, place and promotion to
serve the products and services to the specific country wants.
According to the view of Hay and Marsh, (2016) an organisation cannot think that
there are competitors only in the domestic market, there are large number of rivalries that are
appearing all time in the international market. Many organisations can increase their
profitability by making their higher margin of products, expanding the market and
exchanging the different products and services to the different market and companies. In the
contradicting view of Enloe, (2016) there are different factors that leads to profit from which
cost is the important one, if the organisation purchase the raw material from the different
and international vendors, the cost of procurement will be reduced and they will able to
manufacture the products at the low cost. It will enhance the profit margin of the
organisation and they will able to earn large profit. Other than that the important factor is
market share and customer satisfaction. Due to introduction of globalisation, domestic
companies have made different types of alliances with the international organisation which
help them to sell their products and services to the global companies. This will help them to
increase in the target market and they will render large goods and services which enhance
the profitability of the organisation.
According to the view of Nayak, (2016) the companies who are in the search to gain
competitive advantage in the global market, they need to gain international brand name and
information system. It is difficult for them to build their brand name that sounds exciting in
many languages and is offensive in none. The strategies of the firms should be customised in
order to have the best knock for the buck. The perfect use of globalisation is depended on the
company’s contract with the international organisation, their products, suppliers, partners
and customers. In the contradicting view of Breznitz and Etzkowitz, (2016) there are various
factors which leads to increase in the profitability through globalisation that are the product
line have become broader, they will able to serve the additional international markets which
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will reduce the cost of manufacturing, there is increase in the assets of the organisation with
the help of economies of scale, new equipment such as Information technology and proper
relationship with the global customers and suppliers.
Concept of Protectionism
According to the view of Milanovic, (2016) Protectionism is the policies and actions
that are made by the government in order to protect the international trade with the intention
to protect the competition of the local jobs and business. The common method of the doing
the protectionism is doing the tariff quotes on the import of the goods and services as well as
subsidies or tax cuts granted to local businesses. The key motive of the protectionism is to
create the localised business and organisation more the competitive by enhancing the price
and limiting the quantity of the importing in the territory. In the contradicting view of Gill,
(2016) argues that it is the type of policy and practices which limits the unfair trade
competition from the different foreign companies. There are four ways by which the
government can do protectionism is they immediately increase the price of the imported
products and services. By that it has become the low competitive which it is compared to the
local brand, other than that government make the subsidies the local companies which can
be in the form of tax credit or the direct payment. The third method of doing the
protectionism is to impose the quotas on the products and services that is being imported.
And the forth way is to lower down the currency value which create the export cheaper and
competitive at the large basis.
According to the view of Coleman, (2016) Protectionism is the governmental laws
which have key motive to protect the fragile economy and the critical sector from the low
quality and cheaper import of goods and services by imposing several duties which is called
as tariff and non-tariff barriers, quotes and quality regulations. All the counties implement
the protectionism in one or the other form. In the contradicting view of Martell, (2016) it the
laws which is made by the political party or government in order to restrict the trade between
the two countries to import goods and services. Due to this the competition between the local
business increases as well as unemployment rate decreases in the short run. But when it is
made for the long run, the competition in the international trade will reduce.
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