Impact of Globalization on Multinational Companies: A Study on ALDI Group

This research study explores the impact of globalization on multinational companies, focusing on ALDI Group. It examines the challenges faced by companies in the global market and provides recommendations to overcome them.

RESEARCH PROJECT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Research topic.............................................................................................................................1
Research background..................................................................................................................1
Overview of company ALDI......................................................................................................2
Aim and Objective......................................................................................................................2
Research questions......................................................................................................................3
Rationale.....................................................................................................................................3
LITERATURE REVIEW................................................................................................................3
RESEARCH METHODOLOGY.....................................................................................................5
DATA ANALYSIS..........................................................................................................................8
Reflection and effectiveness of research methods.........................................................................14
Lessons learnt and alternative research methodology as well As recommendation......................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Globalization increased at large scale across the globe. With passage of time period more
countries are opening gates for international trade by reducing trade barriers. It is globalization
which make easy for firms to open their branches in the foreign nations. In past couple of years
large number of companies enter in to the UK market especially in the retail sector. Earlier there
were only two firms namely Tesco and Sainsbury but due to globalization two new firms namely
Lidl and Aldi also enter into the market. These two firms disrupt industry because of their low-
cost model. Aldi is the company on which research is carried out in the present research study.
Mentioned firm make available product at very low price in the market because it purchases
items from those retailers whose products are not so popular in the market and are of good
quality. In such kind of deal there is benefit of both entities. This is because for small size firms
whose products are not so popular it is hard to generate sales in the market. Aldi directly make
purchase of items from these small firms due to which latter entity earn good amount of revenue
on regular basis. On other hand, Aldi due to purchase of product at low price make available its
items at price less then Tesco and Sainsbury charged. This help firm to make its business stable
in the UK. In other words it can be said that due to low cost strategy firm today is giving tough
competition to the Tesco and Sainsbury.
Research topic
The impact of globalization on large multinational companies and challenges face by the
companies.
Research background
The research is all about impact of globalization. The globalization is concept in which
two companies with different geographical area trade with each other across geographical
boundaries. The activity of globalization undertakes different types of companies with their
resources, products, services, government, etc. with one company across the world. The process
of globalization includes transfer of technology, data, capital along with products and services
from one country to other.
The research report will lay emphasis on globalization impact on multinational
companies when they deal in global market. Also, the impact of globalization on their working
will also explained in this research. The report will also evaluate various challenges which are
facing by the company by opting for globalization. The study will also have emphasized on ways
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to overcome these challenges. The globalization impact directly to the whole world as many
companies are now indulging in the trend of globalization by buying and selling their products
along with services in many countries of the world across their geographical boundaries.
Overview of company ALDI
The present case of research will lay focus on ALDI group plc of UK. The ALDI is the
largest supermarket chain in United Kingdom (Oosten dorp, 2019). The company has almost
16.9% market share among supermarket. ALDI is the public limited company which is dealing in
retail business (ALDI business model in nutshell., 2019). The company has their headquarters in
Germany. The company is founded by Karl in the year 1946 (Sundaram, Schwank, and von
Arnim, 2018). The company deals in grocery stores, super market, etc.
The ALDI believes to earn short term gain at relatively low and affordable cost. For this
the company created their image as a brand of affordable price of their products in the global
market. There are almost 10000 supermarkets of ALDI in different countries of the world
( Baskerville, and Hay, 2016). In current time period Aldi is giving tough competition to the
competitors due to its low-cost model. Mentioned firm start procuring products from the
companies that are not so popular and produce good quality of products. Thus, Aldi start selling
its product at low price in the market which make it very popular among people. At fast rate firm
grab market share and comes in position from where it can challenge its rivals. In today time
period Aldi have high market share and is in good position. Other than Aldi there is another
German company in UK which is giving stiff challenge to mentioned company. That company
name is Lidl. Lidl is also following same business model and under this it is also making
available product at very low price in the market.
Aim and Objective
Aim
“To understand the impact of globalization on large multinational companies and
challenges face by the companies. A study on ALDI group”
Objective
 To analyse the impact of globalisation on multi national companies.
 To comprehend the trend of globalisation on companies.
 To evaluate the challenges face by the companies while dealing in global market.
 To recommend ways by which company can overcome the challenges.
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Research questions
1. What is the impact of globalization on multinational companies while dealing in global
market?
2. How these impact of globalization affects companies working and operations?
3. What are the various types of challenges which face by the company by globalization?
4. What are the measures which company can opt for in order to minimize challenges they
face and improve working of the company?
Rationale
The research is conducted on impact of Globalization on multinational companies. The
globalization is chosen as research topic as due to this trend of globalization more technical
development and advancement been evolved that is provided too many opportunities for the
company. The companies expanded their working and provide different varieties of goods and
services. Due to globalization the international trade in different companies are operated which
have increased the economy of a country. This will also enhance standard of living of natives
living in country by developing of ample amount of opportunities of employment for them.
It is very important to increase their knowledge about Globalization as this is the current
prevailing trend flow in the market. The GDP of country and profits earned by business and the
country attracts one to execute their research of globalization.
LITERATURE REVIEW
Theme 1: Analysis of the impact of globalisation on multi national company
In the view of Sundaram, Schwank, and von Arnim (2018) The globalisation lead to
increase in competition among international market. The customers in global market has
bargaining power. The high competition in the global market directly impacts market share as
well as profitability of the multinational companies.
In accordance with Sengenberger (2015) Trading in global market, multinational
companies able to transfer their expensive and valuable resources from their country to another.
The company also able to share crucial information with the company prevailing in different
country in no time. This helps the companies to develop technologies in their country. Also,
sharing on information quickly reflects an effective decision making.
In the view point of Marden (2017) the global expansion of the companies increases
opportunities of joint ventures, merger, etc. The cost which is associated with these mergers on
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local basis is not that than cost need to bear by the company in global market. But by merging
with the company of different country enables the company of home country to enter into market
of different geographical area.
On the other hand, Baskerville, and Hay (2016) argued that multinational corporation
lead to damage of environment. The multinational companies use natural resources in form of
fossil fuel in transportation. Also, in increase in pollution directly impacts to climatic change.
Therefore, the threat of humanity is there by the increase in Multinational Corporation and the
companies who planned to follow the trend of globalisation.
Theme 2: The trend of globalization on companies.
In accordance with Dabija, Pop, and Postelnicu (2016) the process of globalisation is
used for an exchange of knowledge, capital technology, goods and services. It creates an
opportunity for business to increase in revenue by market expansion and wider network access of
resources.
In the view point of Mah (2017) the globalisation affects nation’s economy. The
companies in order to trading outside the geographical boundary able to develop economies of
their home country. The presence may able to create by them in global market attain reputation
along with profitability.
In addition to this Saraiva (2016) the globalisation trends is very popular among
companies. Companies are executing their activities of business outside the geographical
boundary of their country to expand their market share. Also, by dealing in different countries
companies able to get rid of domestic competition they are facing by dealing in current local
market.
In accordance with Stark (2017) perception of shared their view point that Government
formulates various policies which offer the companies to trade freely in different countries
around the globe. Also, the companies by execution in trend of globalisation contributes a lot to
economy of their home country. The government shows their support by developing such
policies in order to earn revenue from the companies.
Theme 3: The challenges face by the companies while dealing in global market.
In accordance with Pérez Llantada (2018) the challenges faced by corporations is from
the satisfaction among employees and workers. The employees feel not satisfied working with
multinational companies because they face mobility in their job. The workers who work with the
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company face several difficulties such as the company hires labors from the country which is
developing or under developing for which the country in which the company operating their
working face lack of employment opportunities. This lead to increase in satisfaction of
employees and which affects directly to working of multinational companies.
In addition to this Oosten dorp (2019) says that the companies operating in global market
also face challenges regarding complexities in taxation. Different countries has different policies
of taxation and their rates of taxes are also varied. Therefore, businesses need to manage their
operations in countries by managing different tax rates of every country properly.
In supporting to the argument Bassiouni, ed. (2015) the companies lost their identity in
diverse market they trade. The companies are not able to maintain a particular culture in their
organisation for which people of different language, culture working. These diversity in culture
creates communication gap and chaos in the company. The multinational companies are facing
huge challenges by this diversity of different culture of their employees and also customers
choices varied from different culture of countries.
RESEARCH METHODOLOGY
The methodology of research is used for collection of information and data in making
decisions of businesses. The research methodology includes secondary data, participant’s
observations, research survey, research publications, etc.
Research Approach – A research plan and procedure is consisting of steps which
assumes data collection methods, interpretation and analysis. The research approach is mainly
are of three types. Abductive, deductive and inductive research approach (Kinabo, 2016). The
Abductive research approach is associated with surprising facts, figures which is emerging at
time of research encounter by an empirical phenomenon. It is very important to combine
cognitive and numerical reasoning both in order to access success. A deductive approach is far
different from that of an abductive approach, as in deductive approach hypothesis is usually
developed and these are based on existing theories. The research design and strategies are
formulated after this hypothesis formulation (Woods, 2019). But on the other hand, inductive
approach does not concern with any hypothesis formulation. The questions, objectives and aims
of research are wholly based on wants and needs which can be attain during the research process.
The research of impact of globalization is executed in inductive approach.
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Research design – A research design is procedures and methods which is using in data
collection and analyzing measures for a research problem. The research design is created to
achieve answers of problem of research. The types of research design are Conclusive and
Exploratory (Oosten dorp, 2019). The conclusive research design is executed by following
proper procedure of data collection. But in Exploratory no such procedure of data collection is
undertaken. In exploratory design explores research area which have some aspect. The research
design for research topic of impact of globalization are using exploratory design as this is free for
any set procedures.
Research philosophy – The philosophy of research deal with source, nature and
development of knowledge. There are four types of research philosophy. Pragmatism, realism,
interpretivism and positivism. The pragmatism is combination of interpretivism as well as
positivism (Alston, 2017). The realism is depended upon independence in reality by human
mind. The instruments, language, consciousness and shared meaning are included in the research
philosophy (Pérez Llantada, 2018) . The positivism is collection of large sample data which is all
different from other philosophies. Positivism research philosophy is used in order to analyses
impact of globalization on multinational corporation.
Sampling – The sampling is selected from the huge population needs which is included
in executing research. The sampling can be done in two ways, profitability and non-profitability.
The profitability sampling is divided into many sub division such as stratified, systematic, simple
and cluster method (Bassiouni, ed., 2015). While non-profitability is method which has sub
divisions mainly consist of snow ball, quota, convenience and purposive sampling method. In
order to implement the research of impact of globalization are using systematic probability
sampling method.
Data analysis – The analysis of data involves pattern identification that are common for
a specific purpose (Kinabo, 2016). The data analysis is executed in two ways, they are qualitative
data analysis and quantitative data analysis. The qualitative data includes analysis through focus
group, interview and experiments (Sengen berger, 2015). The reason behind the figures are
attached with the data analysis. The quantitative data analysis is executed by involvement of
figures and facts. The qualitative data analysis is executed for generating a proper analysis of
data in the research.
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Data collection – The data collection is process of collecting data from different relevant
sources to find answers of topic of research. The data for the research is collected through broad
two ways, they are primary data collection and secondary data collection. The primary data is
collected through the basis on a particular research and these are original. Data is gathered from
interview, questionnaire, etc (Sundaram, Schwank, and von Arnim, 2018). There are two types
from which primary data can be collected. One is qualitative and other is quantitative. The
qualitative is comprises of mathematical and numerical data while qualitative consist of color,
emotion, sounds, words, etc. There are mainly those data which cannot be able to express
numerically. The secondary data is data which is already published in journals, books,
magazines, etc. and these data is extracted from primary data which was collected for their
research. In this research of globalization, impact of the globalization is studied by conducting
secondary research.
Validity & Reliability - The research includes methods of requirement of research in
scientific manner and are followed in process of preparing findings of research. The reliability of
research is proven by analyzing the same instruments in numerous time (Dabija, Pop, and
Postelnicu, 2016). The research of impact of globalization on multinational companies are
executed and properly analyzed more than one time. This research is highly reliable. Also, the
appropriate methodology is used in research which enable research topic of globalization to
become valid (Bassiouni, ed., 2015). The sample of this research are chosen in research report
are generating outcomes of specific topic of this research.
Ethical consideration – The ethical consideration is a crucial element which must be
undertake by every research. The ethics of research must be properly addressed while executing
research
. The standards and norms are properly taken into consideration. Attempt is made to ensures
safety of recipients and also maintain secrecy after the research (Pérez Llantada, 2018). It is
ensured that data provided by respondents is safe and is not accessible to outsiders. In this regard
data will be kept on google drive not in PC so that it can be ensured that preventive measure will
prove effective. The research of generating impact of globalization is executed in ethical manner.
The research is not at all misrepresenting.
Research limitations – While conducting research several problems are faced in respect
to preparing this research report. It was difficult to gather relevant data for research as topic
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which is globalization impact on multinational companies is quite complicated (Dabija, Pop, and
Postelnicu, 2016). The sample size for generating impact of globalization is very huge therefore,
it become complex at the time of research.
DATA ANALYSIS
Questionnaire:
1.Do you agree that Multinational companies are getting affected by globalization?
5. Strongly agree
6. Agree
7. Strongly Disagree
8. Disagree
2.From the following, What could be the impact of globalization on Multinational companies?
 Increasing profitability
 Capturing larger marker share
 Generating strong brand value
 Increasing productivity
3. From the following, How the trend of globalization comprehends the companies?
 Contribution towards expansion of businesses
 Global networking
 Advancement in technology
 All of the above
4. From the given, what could be benefit to the company by doing business in the global
market?
 Contribution to economy
 High profit earning
 Increasing sales
 None of above
5. What are the challenges faced by the company doing business internationally?.
Unfamiliar cultures
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 Organizational communication
 Unfamiliar culture
 Tariffs and export fees
 Political factors
6. Provide recommendation in order to overcome the challenges faced by them while doing
business internationally?
…..............................
Theme 1: Multinational companies are getting affected by globalization
1.Do you agree that Multinational companies are getting affected by globalization?
Strongly agree 14
Agree 10
Strongly Disagree 5
Disagree 1
Strongly agree Agree Strongly Disagree Disagree
0
2
4
6
8
10
12
14
16
14
10
5
1
Column B
Interpretation:
From the above table and graph can be interpreted that most of the population from
sample size of 30 has strongly agreed that the glocalization has largely affected the Multinational
companies in long run. Whereas the only 1 respondent is disagreeing with the statement.10
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number of population have agreed with the statements and it can b depicted from graph that
major population has contributed and strongly agreed that globalisation have largely affect the
multinational companies in different ways.
Theme:2 the impact of globalization on Multinational companies
2.From the following, what could be the impact of globalization on Multinational companies?
Increasing profitability 12
Capturing larger marker share 8
Generating strong brand value 6
Increasing productivity 4
Interpretation:
From the above graph it can be clearly identified that major of the respondent have
contributed towards increasing profitability an also capturing of larger share of market as
positive impact of globalization on multinational companies and least respondent is towards the
increasing productivity. It is clear from above graph and table that globalization contributes to
companies in increasing their operations and working and operating at international level
10
Increasing profitability
Capturing larger marker share
Generating strong brand value
Increasing productivity
0
2
4
6
8
10
12
14
12
8
6
4
Column B

enhance them to produce the quality goods which will, help them in attracting more and more
customers and also in retention of the customers for long.
The attraction and retention of customers will leads in increasing profitability of the
business and also helps them in capturing the larger share of the market which ultimately helps
the company in generating of the powerful and strong brand value among different nations.
Hence globalization helps the business in achieving their organizational goals and objective
effectively and efficiently,
Theme:3 the trend of globalization comprehend the companies?
3. From the following, How the trend of globalization comprehends the companies?
Contribution towards expansion of businesses 6
Global networking 8
Advancement in technology 3
All of the above 13
Contribution towards expansion of businesses
Advancement in technology
0
2
4
6
8
10
12
14
6
8
3
13
Column B
Interpretation:
From the above graph it can clearly identified that major proportion of the population is
contributed towards the option which is including all type options that is contribution of
globalization towards the expansion of business, Advancement in technology and global
networking all are the factors which responsible for comprehending the globalization trend in the
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companies as this all factors contribute toward the achievement of organizational goal directly or
directly. Global business leads to expansion of business to different nations also which further
facilitates the effective global network'
Theme:4 benefit to the company by doing business in the global market
4. From the given, what could be benefit to the company by doing business in the global
market?
Contribution to economy 10
High profit earning 13
Increasing sales 6
None of above 1
Contribution to economy
High profit earning
Increasing sales
None of above
0
2
4
6
8
10
12
14
10
13
6
1
Column B
Interpretation:
The above graph depicts that higher number of respondent has contributes for the High
profit earning option as according to them globalization has many befits which are ascertain by
the companies but the most beneficial advantage which companies can obtain through
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globalization is earning of higher profit and generation of higher revenue by capturing larger
share of the market and having strong brand value creates an opportunity for the company to
charge more fro the brand they hold which ultimately helps them in increasing their profit
margin and achievement of organizational goal effectively.
Theme:5 challenges faced by the company doing business internationally
5. What are the challenges faced by the company doing business internationally?
Organizational communication 6
Unfamiliar culture 10
Tariffs and export fees 7
Political factors 7
Organizational communication
Unfamiliar culture
Tariffs and export fees
Political factors
0
2
4
6
8
10
12
6
10
7 7
Column B
Interpretation:
The above table and graph interpreting that there are different challenges which are faced
by the company while doing business s globally and large number of respondent has voted for
the unfamiliar culture that means organization working global in different nations must need to
have sufficient human resources who lead them in arrangement and organization f all other
resources. From effective communication it is required that every human understand what is
communicated.
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Doing business global create the problem of cultural difference among the employees
which leads less understanding of language, beliefs and opinions and result in failure of unit and
non-achievement of organizational culture. Thus, unfamiliar culture is considered to the most
difficult challenge which is faced by the multinational companies while doing the business at
global level.
Reflection and effectiveness of research methods
I being a researcher of this report which lay emphasis on impact of globalization trend on
the multinational companies. I choose this topic of research for increase my knowledge and
experience in the field of trend associated in the market for companies. I have collected data for
executing this research from various secondary sources. Also, I analysis the data on the basis of
questionnaire which reflects that most of the recipients feel that multinational companies affects
a lot by globalization. Therefore, they expect that the impact of globalization are in line with
increasing profitability for the multinational corporations. Also, from the study of this research
data I have analyzed that this approach of globalization is best to attract and retain customers
towards the companies.
From analyzing the whole study, I have concluded that my understanding towards trend
of globalization is that they are contributing towards business expansion and to establish global
network. Also, it leads to the technological advancement. The companies who are dealing in
global market face challenges in accordance with my study by organizational communication,
export and tariff fee, political, and most of the common challenge the multinational company
faces is the unfamiliar culture in their work place.
It can be seen from above research methodology section that inductive research approach
is used and interpretivism philosophy is taken into account. Use of inductive approach help a lot
in carrying out present research study because by using this approach by analyzing data a theory
is developed. Use of this approach help me a lot in carrying out present research study in a
systematic way. By considering approach I choose Interpretivism philosophy on basis of which I
use thematic analysis approach. Use of this method help me a lot in understanding opinion of
people in proper manner. It is broad understanding developed through use of research tool which
assist me in concluding entire research work. Thus, I can say that research approach and
philosophy I choose help me a lot in carrying out research study.
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Probability sampling method is used which basically is simple random sampling method. All
these proved effective for undertaken research study. Current research study is not scientific in
nature and attempt is not made to prove specific hypothesis, due to this reason inductive
approach is used. As mentioned research is not scientific and because of this interpretivism
philosophy is used. Globalization is common topic and most of people know about its impact on
the world. Hence, randomly sample units are taken in the research study. I learned from the
research study that globalization not only affect companies, it also affects entire world. This is
because due to globalization now entire world become global village and due to this reason if in
any part of world there is problem then it affects other nations of the world. I meet research
objectives by preparing questionnaire and distributing it among target audience. Thereafter,
gathered data is analyzed and finally conclusion section is prepared. Hence, referring qualitative
investigation and doing thematic analysis impact of globalization on multi-national companies
are assessed. Thus, selected research tools and techniques are highly effectual because concerned
issue can be evaluated from theoretical perspective.
Lessons learnt and alternative research methodology as well As
recommendation
I learnt that multinational companies are affected by globalization. These affects are
positive as results indicate that after becoming globalized firms observed increased amount of
profitability in their business. After globalization technology advancement happened, networking
improved and business also expand. However, cultural factors and communication among
people reside in varied nations are two factors that create a lot of problems for the firms that
globalized their business. Thus, there are both benefits and challenges of doing business globally.
As part of alternate methodology deductive approach and interpretivism philosophy can be taken
in to account. Under this one can prepare hypothesis and can test it by doing data analysis. Such
kind of approach can make current research study better than before. The companies by
operating in global market must analyses current trends before executing their products in market
of different country (Oosten dorp, 2019). The knowledge of trends prevailing in the new market
segment helps the multinational company to enhance their sales as well as profitability.
Also, the company must analyze the activities of competitor’s companies which can
affect their market as well as sales (Bassiouni, ed., 2015). The company by executing a keen eye
on activities of competitors may able to generate more revenue by taking appropriate actions.
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CONCLUSION
This report was all about project of research for the impact of globalisation on
multinational companies in global market. The report begun with research topic along with
description of background of research. After this overview of the company ALDI group plc was
disclosed in this research. Then comes aim and objectives of the research report which was
concerned with impact of globalisation on multinational corporations. Then the research
questions were formulated on which research was carried out. After this rationale behind this
research was expressed. Then comes literature review of the research which was cited with
various authors. After that research methodologies were explained and evaluated. At last
reflection of individual experience and knowledge I learned from the research was explained
along with recommendations of some measures to overcome the challenges face by multinational
companies by trading in global market.
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Online
ALDI business model in nutshell., 2019. [Online]. Available through:<
https://fourweekmba.com/aldi-business-model/>.
<https://www.about.ALDIs.co.uk>.
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