HI5013 Group Assignment: Globalization's Impact on Organizations

This report delves into the multifaceted impact of globalization on businesses, exploring its influence on competition, technology, and knowledge transfer. It examines various international marketing strategies employed by managers, including international, multi-domestic, global, and transnational ...Read More

Running head: GLOBALIZATION
GLOBALIZATION
Name of Student
Name of the university
Author Note

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Executive Summary
Globalization refers to the process by which different cultures, economies and trade and other
activities happen across the borders. It refers to the integration and interaction among different
people, businesses and other factors globally. Globalization has a huge impact in the operations
of the organizations and provides various advantages and disadvantages to the organizations such
as- increased competition, technology change, and knowledge transfer and also provides various
opportunities to the organizations. There are different international marketing strategies used by
the international managers to become successful. The main aim of the paper is to show the
impact of globalization on the organizations. The paper will discuss about- the way
globalizations impacts businesses, the challenges and opportunities provided by globalization,
the various strategies adopted by the international managers to become successful and others.

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
The way in which globalization impacts the business.....................................................................2
Strategies adopted by international mangers in the international market to become successful and
top gain a competitive advantage....................................................................................................5
The ways in which outsourcing and offshoring contribute to globalization...................................7
The problems, challenges and opportunities placed by globalization for all the organizations......9
Challenges........................................................................................................................................9
Another major challenge in case of international business is that it needs extensive capital and it
also demanded the establishment of Specific strategic businesses................................................10
Opportunities.................................................................................................................................10
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

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Introduction
Globalization refers to all the activities carried out businesses or organization in order to
create an international influence or to carry out activities on an international scale. It is the
process through which people belonging to the world interact with each other. Globalization has
a direct impact on the businesses through increasing the competition and this competition can be
related to the cost, products, services and other facilities (Nikolova, Rodionov and Afanasyeva
2017). All those organizations which are able to carry out their activities with reduced cost can
help in occupying an increasing share in the market place. Globalization creates different
opportunities for all the managers because they can expand their operations through the sane
similarly globalization also beings a lot of competition for all the mangers and therefore it is
necessary for the managers to carry out different activities in order to attain an advantageous
position in the global market (Adekola and Sergi 2016). The main aim of the paper is to show the
impact of globalization on businesses. The paper discuses about the ways in which the
globalization impacts the businesses and the way in which they can take an advantageous
position over their competitors through their competitive advantages. The role of outsourcing
and offshoring in globalization and the paper also discusses about all the problems and
challenges being faced by organization due to globalization.
Discussion
The way in which globalization impacts the business
There are various changes brought in the businesses as a result of globalization and some
of these are- increasing competition, changes in technology, information sharing, cultural
diversity and many others (Cunningham and Ferrell 2015).

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Competition
Increased competition is a result of globalization. A company is able to gain a market
share in the global market through reduction of its cost and as a result sales increases. The
competition among the businesses may be due to various reasons- price and cost, technology,
target market and various others. Through globalization, the customers have been able to get a
wider range of choices in goods and services and various other facilities. This in turn has
influenced their behaviors and these days customers do not want to wait and they make quicker
purchase decisions. Moreover their demands over the decade have also changed due to
globalization such as they are better quality at lower prices (Madhani 2016). The companies are
required to meet6 all the changing needs of the customers or they will lose their market share and
profitability. The global market requires the organizations to meet all the requirements of the
customers such as products and services, prices and others (Djelic and Quack 2018).
Technology change
One of the most important changes brought about by globalization is that of changes in
technology that is basically used by all the entrepreneur organizations in order to take advantage
of the opportunities existing in the market place. E-commerce and Internet holds various
opportunities for all these organization to take advantage of the opportunities (Procházka 2018).
Technology helps in reducing the cost of the goods whole increasing the quality of the goods,
and moreover it can also be used as a source of competitive advantage by the organizations.
However it acts as a costly source for the countries because of the have investments needed in
technologies to take advantage of changing technology (Erixon 2018). It is necessary for the
organizations to make use of latest technology to improve quality and sales of goods and

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services. Globalization helped in improving technology and transfer of technology. Those
organizations that are existing in the capital intensive markets are required to carry out the
changes in their offering to the customers and they can carry out the same with the help of
technology. Therefore it is important for organization to have a research and development
department and others (Hamilton and Webster 2018).
Knowledge transfer
Information can be transferred from one country to another and from one company to
other and it is also one of the most important resources of the environment (Solberg and Durrieu
2015). It is possible to carry out changes and adapt to all those global changes easily if a
company has knowledge and carries out knowledge sharing (Picciotto and Mayne 2016).
An example to show the impact of globalization on the businesses is that of McDonald’s.
Globalization for businesses includes taking a big step with the help of many strategies to enter
the global market. The company recognized the opportunities being offered by the global market
and therefore decided to expand its operations in countries worldwide and therefore it started
about 34000 restaurants worldwide that are offering their services across many countries. The
company also recognized the cultural aspects of different countries and therefore offers a
customized menu for different cultures. For instance the company recently introduced their veg
mac for many locations in India (Lasserre 2017). Moreover the company took the risk of offering
is services worldwide and became successful in the industry. Some of the major competitors of
the company in the global market are subway, burger king and others. However the company
manages to maintain its position through innovation, quality and various other factors.

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Globalization helps the organization in acquisition of resources more efficiently, it helps in
reducing the risk factors and others (Deresky 2017).
Strategies adopted by international mangers in the international market to become
successful and top gain a competitive advantage
In order to become successful in the international markets, the international managers
undertake various strategies and these includes- international strategies, multi-domestic
strategies, global strategies and transnational strategy. International managers may decide to
internationalize their business by exporting their products and services and importing different
goods and services from different nations. Companies that undertake the advantage of such
strategies have their headquarters in one action and they carry out activities overseas in other
countries through investing in employees in other nations. These companies are engaged in
importing exclusive resources from manufacturers in different nations. Organizations can carry
out this strategy at the minimum cost and moreover many strategies can be carried out by the
organizations such that they can see how each strategy works and other factors. A company for
instance may export its goods and services to trust how their products work in the international
markets. For this the organization is required to prepare strategies that can be accepted at a
global platform and therefore carry out its manufacturing and selling activities properly
(Brustbauer 2016). A multi domestic strategy can be used by international managers through
ensuring its presence in the global market and also provide customized products and services for
its customers. These managers are required to reposition themselves aiming the foreign
customers by making adjustments to their products to meet the cultural expectation of the foreign
customers, follow their traditions and others. These companies have their headquarters in the
place of their origin and also have a headquarters in the foreign countries known as the

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subsidiaries that can help in meeting the needs of the people in better way. These companies
carry out activities in the other countries such as manufacturing activities, sales operations and
other activities in those countries. These strategies are basically adopted by all those companies
that are engaged in food and beverage industry. For instance the Kraft Heinz Company prepares
customized versions of their ketchup in countries like India in order to meet the culinary
preferences of the countrymen through a blend of different spices that is preferred by them.
However there are many risks related to the same because a lot of money is invested in carrying
out such innovation before launching the products and it is not known how the product will sell
in the countries (Miles and Miozzo 2015). These strategies are basically carried out in a few
countries because of the risks involved.
A global strategy is used by the international managers when they wish to expand their
customer base and to sell their products in the international market. For this purpose, the
company adopts this strategy such that they can take advantage of economies of scale, and can
expand their revenue and reach. These companies adopt a homogeneous approach such that they
can provide similar products on a worldwide basis and they do not have to incur more costs and
can reach a wider market. These companies have their headquarters in the country of their origin
and these companies carry out operations in different nations. While entering the international
market, the organizations should ensure that small scale changes have been made in the goods
and services irrespective of the fact that homogenous goods are being offered by such
companies. For instance some companies that are dealing in the fast food industry may either
add, remove or cancel out certain items from their food items depending upon the cultural
aspects of the country in which they are offering their food and beverage. Another example is
software companies need to change the computer language (Brewster et al. 2016). This will help

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such organizations in winning a better acceptance from the local customers in the international
markets. Another strategy that can be adopted by the international managers is that of
transnational strategy. It is one of the intricate strategies that international managers can use
when expanding their operations at a global scale. It involves a combination of the multi-
domestic a d global strategies. This strategy helps the managers to carry out their core activities
in the place of origin and they keep their headquarters in the country of origin (Khan and Bashar
2016). However this strategy also allows the company to carry out its activities on a large scale
in other countries. The sakes, production and decision-making activities are given to individuals
in different nations and different markets whereas the most important activities of research and
development, separate marketing activities and others in the country of origin such that they can
meet the needs of the customers. Those international managers who are adopting this strategy
need to spend some time determining all those management tactics that can help in improving
the economies of scale and improved efficiency of operations. Instances of companies who have
adopted the strategy of transnational strategy are- Toyota and general electric. These companies
are therefore able to make investment in research and development for its offering in the foreign
markets, and these nations carry out activities of production, manufacturing, marketing division,
sales and others in the foreign countries and therefore has time for making investment in research
and development.
For example Apple company adopt various international marketing strategies to enter
new market such as its distribution network, using customized items for improving customer
experience and taking use of localization to popularise the brand. The company follows a best
buy approach under which third party retailers sell the gadgets to the end consumers. This
strategy is used in markets where the consumers have prior knowledge about the product and

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also its price range. The company was successful in entering the Chinese markets through
customised items, The main objective is to have a radical localization for these international
markets. The company is famous for targeting its customers properly no matter what background
they come from they will come out of an apple store having the same impression as any other
consumers. Therefore it aims at providing a consistent customer experience. This strategy has
also helped them in entering the international markets.
The ways in which outsourcing and offshoring contribute to globalization
Outsourcing has been a part of the international market since a long time because earlier
it was used in the textile industry. However since globalization it has become even more relevant
in the business processes and therefore the concept of offshore outsourcing has been introduced.
Outsourcing in fact has become one of the most successful products of globalization.
Outsourcing and globalization is used to refer to describe the world as a global village. The
present world is different from that it was a few years ago because of the fact that there has been
development in the communication, availability of information, global networks, logistics and
transportation and others. Marketing with the help of media is continuously engaged in giving us
information about outsourcing and globalization which makes the people feel claustrophobic.
According to all the information that is available to us through internet, television, and others the
planet has become small and therefore the people are concerned about their role in this small
world. Globalizations growth can be seen in many business functions (Nosova 2017). Therefore
techniques such as offshoring outsourcing have been introduced. The outsourcing was initially
used in the info tech sector such as software management and data analytical. Therefore it can be
said that outsourcing is an important result of globalization. Offshoring outsourcing helps the
organizations to innovate their goods and services because other activities of the organization

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such as sales, marketing and others is given for outsourcing therefore leaving the organization
with sufficient time to spend on the research and development activities. Moreover it helps in
directing the nations towards development. It has actually helped in reducing the wars between
the countries by improving their relationship through outsourcing. Globalization mobility has
been made possible with the help of offshore outsourcing. Globalization helps in improving the
unity between all the actions. Initially globalization referred to improvement in the technologies
and communication sectors and has led to transculturation. Outsourcing helps in improving the
mobility of the globalization. The influence of offshore outsourcing can be seen on the global
market through different signs that shows that impact on the globalization. It has helped in
increasing flow of capital due to free flow of services and goods. It therefore helps in promoting
multi-cultural and therefore supports diversity of culture. There are more cultural exchanges in
case of employees of an organization that is dealing in international business. It helps in
developing the global infrastructure. Therefore it helps in improving the relationship between all
the nations engaged in international business.
In order to take advantages of globalization through outsourcing and also to reduce
prices, the company has decided to outsource its manufacturing activities. These initiatives are
also expected to improve the manufacturing abilities of the company and the operational
activities. The company decided that in order to improve the flexibility and efficiency of
operations of the manufacturing activities, the final assembly of components is being moved to
different countries. In fact there has been an increase in the gross profit margins due to the
outsourcing efforts of the company. Apple has also been able to innovate two new models whose
design were created in California because of the fact that it has outsourced its manufacturing

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process and therefore it is able to give time to research and development and innovate products
for the price conscious customers.
The problems, challenges and opportunities placed by globalization for all the
organizations
Challenges
When businesses enter the market there are numerous problems that are faced by them in
carrying out their operations smoothly in other nations.
Unfair business practices
Unfair business practices usually in areas of labor, product safety, corruption, and
regulatory practices that needs to be complied with and others. All these factors have been
responsible for determining the failure or success of global players. For instance the brand image
of Nike was hurt when it was found out that they made use of low wage workers and utilized
sweatshops in developing countries. There are many companies that make use of bribery and
other unethical practices for the purpose of carrying out their work properly.
Organizational Structure
Another major challenge in case of international business is that it needs extensive capital
and it also demanded the establishment of Specific strategic businesses.
Public relations
Creating good public relation is important for the purpose of creating a good image of the
company in front of the public.

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Legal and other regulatory challenges
In order to enter foreign business market, it is necessary to understand the rules and
regulations of the nations and for this it is necessary for the organizations to have legal experts.
Apple is facing many challenges related to increasing its operations in developing
nations. For instance the prices offered by the company are high and therefor it is beyond the
reach of common man and as a result its demand is also continuously falling in developing
countries. The demand for apple products in many developing nations is not so high because of
their premium pricing and also because smart phones that are technologically advanced is being
offered in the country at a much lower price. The time by which the company decided to enter
these countries, it has already lost a major portion of the market share because it is already
occupied by existing companies that are offering tech goods at a much lower price (Milewska
2018). Moreover the company is not presently focusing on innovation and therefore it is failing
to attract the tech savvy customers.
Opportunities
Innovation and Creativity
Globalization can create innovation and creativity in order to overcome the competition.
Therefore these innovations can be driven with the desire to produce high quality goods at a
lower price (Chalaby 2018).
Reduced cost of goods and services
With the use of technology, there can be introduction of blower cost of goods and
services that can further lead to various advantages.

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Improvement in the standards of living
There can be improvement in the standards of living for the customers through
innovation of goods at lower price and of a good quality (Paluch and Płonka 2016).
The company Apple has been able to increase its market share and profit due to its global
presence and since it makes use of new technology and innovation.
Figure 1: Use of apple products worldwide
Source: (D O'Rourke 2018)
From the above pie chart it can be understood that with globalization, the company has
been able to achieve better market share.
Conclusion
From the above discussion, it can be concluded that Globalization is important not only
for the business but also economies because the gender pay gap and all forms of discrimination

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have been avoided since the introduction of globalization. It has helped in the spread of
technology and other activities that has helped the economies in becoming more productive and
efficient. There are many advantages that are offered by the globalization to businesses such as a
global market in which they can carry out their operations and therefore take advantage of
internationalization. Similarly there are various disadvantages that are created by the
globalization on the businesses such that there in unnecessary competition among organization
that can sometimes have a negative impact on the customers and various others. The paper
discusses about the ways in which the globalization influences the businesses today, how the
international managers can take advantage of the global marketing opportunities in order to take
a competitive advantage over their competitors. The paper also discusses about how offshoring
and outsourcing are contributing to globalization and also the various challenges and
disadvantages being faced by organizations due to globalization. The paper also discusses about
the various opportunities placed by globalization over business due to such on
internationalization. Some of the major opportunities available to the organizations as a result of
globalization increased innovation, mobility, more resources and others. The company case study
chosen for the purpose of this study is Apple Company outsourcing.

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Brustbauer, J., 2016. Enterprise risk management in SMEs: Towards a structural
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