Understanding Globalisation

Globalisation refers to the integration and interdependence of the world’s economies. This integration is driven by the increasing connectivity and mobility of goods, services, capital, and knowledge.
Drivers of globalisation include advancements in transportation, communication technology, deregulation and liberalisation of economic policies, and the growth of transnational corporations.
Benefits of globalisation may include access to new markets, availability of new resources and inputs, increased competition leading to innovation, and the diffusion of technology and culture.
Criticisms of globalisation often centre around income inequality, job insecurity due to offshoring, infringement on national sovereignty, and environmental degradation.

Key Concepts in Globalisation

Absolute advantage refers to a country’s ability to produce a good or deliver a service more efficiently than another country.
Comparative advantage is when a country can produce a good or service at a lower opportunity cost compared to another country.
A multinational company (MNC) is a firm that operates in more than one country. MNCs play a key role in driving globalisation.
Offshoring is when a firm relocates a part of its operations to another country to reduce costs. This is often a direct consequence of globalisation.

Global market niches are specific, often narrow, customer groups spread across multiple nations with specific product or service needs.
A standardised approach to marketing means offering the same product, using the same marketing strategy and mix, in every market, irrespective of geographical and cultural differences.
An adapted approach to international marketing tailors the product or service, and the accompanying marketing strategy, to suit the unique needs of each international market.
Global brands leverage their recognition, reputation, and standardised customer perception across nations to maximise market share.

Global strategic alliances are partnerships between businesses across borders to share resources, experience, and expertise. These can take the form of joint ventures, franchising, or licensing agreements.
A global strategy involves a coordinated approach to international operations across multiple countries. Decisions about marketing, human resources, production, and distribution are integrated across nations.
Ethical considerations in international business cover a wide range of practices including employee rights, environmental standards, and corruption and bribery.
The global supply chain must consider factors such as logistics, country-specific regulations, local market conditions, and environmental impact.

Exchange rate fluctuations can impact the competitiveness of a firm’s products in international markets and the costs of importing goods and services.
Country-specific factors such as political stability, legal regulations, cultural differences, and economic conditions can greatly impact the international operations of a business.
Globalisation has seen the rise of international regulatory bodies such as the World Trade Organisation (WTO) that govern trade agreements, fair competition, and economic regulations between countries.
The impact of cultural differences on business operations can be significant, affecting areas such as consumer behaviour, human resource management, negotiation styles, and marketing strategies.