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 specially 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. Theresearchreportwilllayemphasisonglobalizationimpactonmultinational 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 1
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. 2
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Research questions 1.What is the impact of globalisation on multi national companies while dealing in global market? 2.How these impact of globalisation affects companies working and operations? 3.What are the various types of challenges which face by the company by globalisation? 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 Globalisation on multi national companies. The globalisation is chosen as research topic as due to this trend of globalisation 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 globalisation 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 toincrease their knowledge about Globalisation 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 : 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 multi national companies. for which the companies face InaccordancewithSengenberger(2015)Tradinginglobalmarket,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. 3
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 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 : 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 : The challenges face by the companies while dealing in global market. 4
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 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.Whatarethechallengesfacedbythecompanydoingbusinessinternationally?. 8
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Unfamiliar cultures 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 agree14 Agree10 Strongly Disagree5 Disagree1 Strongly agreeAgreeStrongly DisagreeDisagree 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 9
companies in long run. Whereas the only 1 respondent is disagreeing with the statement.10 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 profitability12 Capturing larger marker share8 Generating strong brand value6 Increasing productivity4 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 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
companies in increasing their operations and working and operating at international level 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 businesses6 Global networking8 Advancement in technology3 All of the above13 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 globalizationtowardstheexpansionofbusiness,Advancementintechnologyandglobal 11
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networking all are the factors which responsible for comprehending the globalization trend in the 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 economy10 High profit earning13 Increasing sales6 None of above1 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 12
thecompaniesbutthemostbeneficialadvantagewhichcompaniescanobtainthrough globalization is earning of higher profit and generation of higher revenue by capturinglarger 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 communication6 Unfamiliar culture10 Tariffs and export fees7 Political factors7 Organizational communication Unfamiliar culture Tariffs and export fees Political factors 0 2 4 6 8 10 12 6 10 77 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 13
resources. From effective communication it is required that every human understand what is communicated. 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. 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. 14
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LessonslearntandalternativeresearchmethodologyaswellAs 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,culturalfactorsandcommunicationamong 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 more 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. CONCLUSION Thisreportwasallaboutprojectofresearchfortheimpactofglobalisationon 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 concernedwithimpactofglobalisationonmultinationalcorporations.Thentheresearch questions were formulatedon 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. 15