Contemporary Business Issues: Globalisation Impact on Businesses

This report examines the multifaceted impacts of globalisation on individuals, businesses, and countries, focusing on the UK-based retail company, Next PLC. The report delves into how globalisation influences various aspects of life, including religion, transport, clothing, and food, while also acknowledging the disparities in its effects based on factors like income, education, and social class. It highlights the challenges faced by local businesses in the face of global competition and the evolving nature of business operations due to globalisation. The report also explores the positive and negative impacts of globalisation, such as Foreign Direct Investment, technological innovation, and economies of scale, while also discussing the external environmental factors that affect businesses. The analysis includes economic, social-cultural, technological, and environmental factors that influence globalisation strategies. The report concludes by emphasizing the need for businesses like Next PLC to adopt new strategies to thrive in a competitive global market, considering the complex interplay of these factors.

CONTEMPORARY
BUSINESS ISSUES

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
A perennial challenge is faced by all world’s countries, in regardless of their level of
economic growth, gaining financing stability, higher living standards and many more
(Barrientos, Gereffi and Rossi, 2011). There are different paths which has been considered by
organisation to achieve their business objectives. This assignment has focus on how globalisation
is impacting on individuals and country or region. Along with this; external environmental
factors are listed below which has severe impact on organisation. For this, Next plc company is
taken which is largest and most profitable fashionable retail company in UK.
TASK
Globalisation is historical process which results in the form of human innovation and
technological evolution. It is refers to increasing integration of economies around world and
particularly with the help of movement in goods, capital, services across the border. It also
discusses the things such as trade between world-wide companies and most of people considered
that it has impacting on their life standards.
Globalisation has effect on every individual’s life which includes religion, transport,
clothing, food. However, it impacts on individual’s life differently but they are wisely depending
upon the number of factors such as income, education, social class etc. It has been criticised for
widening up the gap between rich and poor person (Black, Calitz and Steenkamp, 2015). Many
people are belonging from developing nations and giving disadvantage to poor people if it is
compared with developed nations. It also exploited cheap labour without using new
technologies. But for those, who have access, they are not unable to use internet but they are
having capability to read, write and make contribution in achieving business objective and
improve economic conditions. On local level, globalisation has drastically change the nature of
business. Small and local companies are struggling to beat their competitors at domestic level
only. It results in consumers are purchasing cheaper products which are offering by retail
companies and they are manufacturing products with the help of using cheap foreign labour.
However, it also affecting local culture of people because traditional customs are replaced by
new culture. Globalisation is affected to poor people because they are less educated but having
skills to improve economic condition of country. But their lifestyle has been completely changed
after globalisation because many companies are offering products and services at cheaper rate.
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Moreover, this also improved their quality of life so companies are not leaving their skilled
workers.
The result of globalisation on existing life of people are also increasing international
scale. The domestic companies are emerging and expanding their business at international level
with the help of using new technologies. According to Linden, Dedrick and Kraemer (2011),
there are many people who are travelling from foreign countries to another and culture are being
exchanged with sharing global identity. The local people are also going to another country for
doing job because due to negative impact of globalisation on companies are not offering job
opportunities to them properly.
On other side, globalisation has also impacted upon different factors in improvement of
economic growth. Globalisation is that process which is based on international strategies, where
aim of organisation is to expand their business operation on worldwide level. Most of economist
are agreed upon that globalisation has provide net benefit to individuals around the world, by
making market more efficient, increasing number of competition which also spreading wealth
around the world. Their are some advantage of globalisation which has given positive impact on
country.
Foreign Direct Investment - It tends to increase in growth rate in world trade and
helping to countries in boosting new technologies, restructuring industrial and development at
international level (Lysonski and Durvasula, 2013). Those investments which are made by
companies in form of either establishing their business operation or acquiring other business
assets to maintain strong position in global market.
Technological innovation – Globalisation helps to organisation in stimulating new
technological development, which also improves economic condition of country by making
processes more effective. With the use of up gradation, domestic companies will be able to
expand their activities in other countries.
Economies of scale - In this, it will reduce price and cost of goods and services which
are offered by companies which will support in economic growth of country.
There are some complements of globalisation which includes gross domestic product,
Human development Index and industrialisation. Through this financial condition of companies
are improving at national and international level. As these are providing new opportunities for
developing countries. They largely impact on globalisation to attract foreign investors and
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capital. It also increase living standard of people and companies can also assess into new
markets, there is also decreased in employment for skilled workers.
In contrast to retail industry, grocery sector is dominated by local players in most of the
countries. The retail companies are having option to increase their business in other countries
with the help of franchise, joint ventures and many more (Mowforth and Munt, 2015). For
example, impact of globalisation on Next Plc store, have succeed by adopting new strategies and
found all new paths to attain their objectives at national and international level. But there are
many factors which are impacting on organisation objectives i.e. external factor. It is
responsibility of authority to analyse these factor on regular basis which also help them to
identify both positive and negative impact of globalisation on company.
Economic factor – There are number of economic factor which are included in
globalisation with aim of growing and developing trade in other country. Globalisation has
impact on changing pattern of labour of Next plc. The highly increased in number of skilled
labour are benefiting to organisation in terms of accessibility of internet uses. Families are
splitting up and separating from own countries due to immigration of unskilled workers which
have heavily impact on restricted nations.
Social culture factor – The rising in globalisation is also meant for people so that they
can meat with other different culture background person. It will help them in increasing cultural
and social valued of other people (Spence, 2011). The services which are provided by Next Plc is
according to culture of people which also satisfied their needs accordingly. For some people, it
has given positive impact to understand other culture of people.
Technological factor – In modern era, there is innovation in technologies which are
impacted on organisation. International companies are coming in domestic country and operating
their business and introducing new technologies which can also use by Next plc company in
order to provide quality of services and goods to customers. Nowadays, communication
technology has been emerged with globalisation. It become more easy for organisation to interact
with their customers with the help of using social media sites. Their is also development in
transport technology which have played major role in globalisation.
Environmental factor – Globalisation has impacted on this factor also in utilising the
resources in limited manner. In economy, there are scare number of resources, so organisation
have to utilise resources in appropriate manner (Zajda, 2015). Through this they can preserve
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resources for future use also. Globalisation has featured extensively impact on environmentalism
and green activist which is highlighting effect on surroundings.
The following are some factors which are influencing on retail sectors while adopting
globalisation strategies or entering into foreign market.
Retailers are facing barriers to get entry into foreign market – It is becoming tough for
retailers to enter into other country. Even well established market are making trouble for retailers
to do their business. So it is equally difficult for Next Plc to emerge with new markets.
Foreign entrants have to take on incumbents that operating their exclusively business in
one country – The organisation have to understand needs of local people which are offering by
them. On other side, they have to respond if there is large variation in shopping habits of
customers which are directly impacting on their sales.
The Next plc have to differentiate their products and services from their competitors so
that they can attract new customers also. Through this, they will get benefit from international
expansion of business. Mostly 70% of sales are originating from local producers. Retailers needs
to think carefully about their customers to get entry into new market (Retail Doesn’t Cross
Borders: Here’s Why and What to Do About It, 2016). The higher authorities have to utilise their
time in proper manner which help them to adopt new strategies and retain in market for a long
period of time. There are number of retailer stores who are operating their business at
international level and getting success also.
CONCLUSION
It has been concluded from above report that globalisation has impacted on individual,
organisation and countries in both ways. There are number of countries who operates retail stores
at international level and they also attaining their goals and objectives in time period. Further,
analyses of external factor, Next Plc can smoothly run their business in competitive market. They
have to adopt new strategies to run their business in other country. Globalisation mostly operates
in the interest of richest people in order to continue their business. They are imposing some new
policies and rules which do not impact on culture of other people.
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REFERENCES
Books and journals
Barrientos, S., Gereffi, G. and Rossi, A., 2011. Economic and social upgrading in global
production networks: A new paradigm for a changing world. International Labour
Review. 150(3‐4). pp.319-340.
Black, P., Calitz, E. and Steenkamp, T., 2015. Public economics. OUP Catalogue.
Davidson, R. K., and et. al., 2012. The impact of globalisation on the distribution of
Echinococcus multilocularis. Trends in parasitology. 28(6). pp.239-247.
Linden, G., Dedrick, J. and Kraemer, K. L., 2011. Innovation and job creation in a global
economy: The case of Apple's iPod. J. Int'l Com. & Econ. 3. p.223.
Lysonski, S. and Durvasula, S., 2013. Consumer decision making styles in retailing: evolution of
mindsets and psychological impacts. Journal of Consumer Marketing. 30(1). pp.75-87.
Mowforth, M. and Munt, I., 2015. Tourism and sustainability: Development, globalisation and
new tourism in the third world. Routledge.
Spence, M., 2011. The impact of globalization on income and employment: The downside of
integrating markets. Foreign Affairs. pp.28-41.
Zajda, J., 2015. Globalisation and its impact on education and policy. In Second International
Handbook on Globalisation, Education and Policy Research (pp. 105-125). Springer
Netherlands.
Online
Retail Doesn’t Cross Borders: Here’s Why and What to Do About It. 2016. [Online]. Available
through: <https://hbr.org/2012/04/retail-doesnt-cross-borders-heres-why-and-what-to-
do-about-it>. [Accessed on 17th July 2017].
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