The Impact of Globalisation and Rise of Protectionism on Retail

This report investigates the impact of globalisation and protectionism on the retail industry, using Marks and Spencer as a case study. It explores how globalisation affects business profitability and examines the factors leading to protectionism, including its effect on unemployment rates. The report includes a literature review of relevant concepts, research methodology involving surveys, data analysis, and a discussion of findings. The analysis considers the impact of globalisation on market share and profitability, and the effects of protectionist policies. The report concludes with recommendations and identifies limitations of the study, providing valuable insights into the interplay of these economic forces in the retail sector.

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..........................................................................17
REFERENCES..............................................................................................................................19
APPENDIX....................................................................................................................................22
Questionnaire........................................................................................................................22

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 economy. 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 can not 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
companies 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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Factors that lead to protectionism
There are several factors that have lead to increase in the protectionism in the
country. According to the view of Knudstorp and Christensen, (2017) one of the reason is it
protect the infant industry, this is the most traditional reason which is given by the
developing countries. They say that they have some sun-rising companies which have great
ability to transform in the international business and they need more time increase their
market share with that they need to train their employees and learn to manufacture goods
with the cost effective techniques. So that organisation need temporary protection from the
international companies which sell goods at the low price so the government put the tariff to
protect them. In the contradicting view of Haynes, (2016) other factor is government want to
protect jobs other than the sun-rise industries, there are also sun-set companies which is at
the decline stage, in such situation, the companies at the maturity stage but still they are
inefficient such as in the year 2002 when the President of the
have imposed 8 to 30 % of tariff on the steel industry in order to increase the steel mills, if it
would not have happened the country would have gone to the structural unemployment.
According to the view of Payne and Askeland, (2016) the other factor is revenue, in
the developing countries. It is very difficult for the government to earn the sufficient amount
of money from the corporation and income tax, the reason behind it is the high level of
unemployment and there is only few large scale industries. So the government impose some
tariff on the international products in order to increase the revenue such as it is shown in the
graph
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Illustration 1: Revenue from tariff
(Source: Reasons For Protectionism, 2009)
In the contradicting view of Luard, (2016) the other factor is national security, the
government of the country believe that they are not in the position of competitive advantage
in manufacture the products and serving the services, so different measures of protectionism
have been taken to secure the survival. Steel and agriculture industry which is most
significant for every country, when there was war in the UK, the government have made
tariff on the rice in order to protect the frames and they can grow more food.
According to the view of Baylis and Smith, (2017) The most important factor which
lead to the protectionism is to protect the consumer from the unsafe goods and services. It
is often made when the consumer are not aware about the safety and quality of the goods
that they consume. The government have acted as the agent to guaranteeing the consumer
about the safety of goods, the cars which have been imported must be done with the safety
inspection so the government made some tariff to protect the customers that the goods does
not harm them. In the contradicting view of Crane and Matten (2016) The one of the most
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important factor is unethical practice so of the countries impose trade restriction so that they
can encourage other countries to stop and take action against the unethical international
trade. According to the view of Hay and Marsh, (2016) the other factor is protected the
dumping the goods and services. Some countries try to earn more profits so they try to sell
large quantity of goods to the other countries. In the contradicting view of Enloe, (2016)
This is not the good act to sell large quality of goods where demand is less than supply and
people start purchasing them because of low cost, it is called as dumpling of products. So the
government make some import in order to protect this activity.
Unemployment rate during the Globalisation and during rise in Protectionism
Unemployment rate is the measurement of prevalence of unemployment which is
calculated by the number of unemployment people by the individual who are currently
working for any organisation or company.
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According to the view of Nayak, (2016) the globalisation have been introduced in the
year 1990, after that when it was introduced it has negative impact over the employment
rate, the unemployment rate has started increasing, the UK people were job less because the
citizen of the different countries started coming to the country and doing job. The UK citizen
were not finding the best job for them and they unemployment rate started increasing. In the
contradicting view of Breznitz and Etzkowitz, (2016) when such situation was found by the
government of the UK, they start tinkling and planning for the strategies which overcome
the problem and the globalisation will serve benefits not problem. In the year 1993, they
have planned for the Protectionism where they have made some tariff in order to protect the
job of citizen and after that the unemployment rate started decreasing.
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Chapter 3: RESEARCH METHODOLOGY
For the research methodology, onion ring style have been taken which explains the
different methods of research that are as follows:
Illustration 2: Onion ring research methodology
(Source: Onion ring research methodology, 2017)
Research philosophy- It is one of the significant part of the research methodology
There are three types of research philosophy which is Positivism and interpretivism and
realism (Baylis and Smith, 2017).
 When the Positivism is considered, it includes various theories, fact and findings
 When the interpretivism is considered the research will always include the major
objectives of the research.
 Realism research philosophy is the way to independence of the reality from the
human mind. This is based on the assumption of the scientific approach that is to
develop the knowledge.
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For this study, Realism research philosophy can applied to address some aims and
objectives of the study. With an assistance of realism philosophy the experts can have
analysis of Impact of Globalisation and Protectionism on the retail industry. It means the
factors relates with the globalisation can be identified effectively using realism philosophy.
Research approach: it is also a significant part of the research study which help to find the
valid and effective conclusion of the research study. With this the conclusion and solution is
being obtain from the theory or the hypothesis (Kraidy, 2017). There are two type of
research approach that are deductive and inductive.
 In the deductive approach hypothesis is made to find the research problem
 Inductive research approach is the study which move from specific to the general.
In this research project, deductive approach is being selected so that researcher can
draw conclusion from the different hypothesis. In this approach the null hypothesis has been
framed so that better outcome can be attained. On the basis of designed or framed values the
selection of methodology is being taken into account.
Research design: It is also the major part of the research methodology which help the
researcher to design the structure of the research. There are three types of research design
that are exploratory, descriptive and experimental (Crane and Matten, 2016) .
 Exploratory research design is used when the researcher use their own ideas and
imagination. It is based on the researcher personal interpretation and judgement
 Descriptive research design is when the researcher describe the particular situation or
problem in the deep manner.
 Experimental research design is mostly used with the natural science but it does not
include the social science. In this some variable is being tested with the help of
experiment to find the solution.
For this study, the researcher have chosen descriptive research design, this helps him
to find the valid and reliable result from the investigation in order to determine the objective
of the research analysis that is impact of globalisation and protectionism in the Marks and
Spencer. In this statics and further facts are being presented so that analysis can be
accomplished effectively.
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