Due to the invention of highly developed technology the current world has more and more become an integrated community and as a consequence global business is the present form of trade in this 21st century. Also due to globalization concept there has been immense disregard to countrywide boundaries, the governments of many countries have had lower hand in domineering the stream of their economies and Multi-National Corporations are now not limited to only one particular nation as it was prior to the birth of globalization.
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Considering the ongoing analysis, globalization does not just involve intensification of worldwide interdependence precipitated by technological advancement and market forces. Rather, it is a global view modeled by modern managers and predominant power that envisions establishing a global system that in the process serves the interest of their firms. International marketing has an inbound tendency of globalizing. There are several ways of entering new markets and firms must evaluate the factors inherent in such opportunities in order to identify the appropriate methods of entry. Managers should carry out constant marketing research in order to keep in pace with the impacts brought about by the concept of globalization thus formulating strategies that will aid their firms in accomplishing the set goals. Therefore, firms involved in the activities of international marketing should recruit competent staff that can formulate such strategies thus gains a position in the competitive market.
Modern businesses are forced to build economic and political connections that usually take the form of transfer of funds, goods, and people across state boundaries. This feature of linkages has also seen joint sharing of concepts and philosophies which have led to an enhancement in the pace of change, ambiguity, disbelief, and unpredictability in the ordinary course of the business. Therefore this paper will focus on organizations that responded to globalization as a result of its international marketing practices.
Statement of the Problem
This paper seeks to identify the impact of globalization in international business and how companies can fully utilize the concept in order to attain their objectives. There should be a clear distinction between globalization and international marketing since the former facilitates the latter if utilized by firms. Research indicates that various companies use such a strategy as a misleading strategy to scare away their rivals who may wish to enter into various markets. Globalization has brought about benefits as well as impoverishment to different countries depending on the magnitude of its impact in such nations. Companies have fully utilized this concept of globalization through their international marketing strategies thus attaining a relatively large market share when compared to their rivals in the specified market. Such firms benefit from workforce diversity, availability of raw materials, new markets and technological advancements among other benefits.
However, such firms in the process of globalization have caused a lot of suffering that is impoverishing the host countries for example by exploiting such nations e.g. dominating local markets thus local companies belonging to the same industry declining or collapsing, production of low-quality products and breaking of industry norms since they have well built financial bases.
Objectives of the Study
The main objective of this study is to find out the impact of globalization in the contemporary world more specifically its merits and demerits to both the company and the surrounding the communities. The paper will also try to examine the various ways of international marketing or going international and how fully it can be utilized to reap maximum benefits
Some of the research questions this study will aim to answer include;
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- Does the concept play any role in the success of international marketing globalization?
- Does globalization through utilization of international marketing bring out prosperity to the host nations?
- Does globalization bring impoverishment to the host nations?
- What are the best strategies for entering global markets?
- What are the main problems faced by firms associated with the strategies of going international?
Critical Literature Review
The global environment and expansion of globalization have incited a range of reactions and opinions all over the world. In the recent past anti-globalization objections have always emerged to be among the most controversial issues all over the world. Nonetheless, anti-globalization activists frequently gain from the globalization aspect and yet they are against it e.g. from the use of internet innovation, global markets and worldwide interdependence. (United Nations, 2001)
Raskin and others (2002) assert that globalization is understood as a complex concept that has brought many controversies worldwide. Over the last two decades, some significant changes in the global system have precipitated globalization. One is the changes in power distribution on a global level where any nation could have emerged as the sole superpower. However, in this regard, globalization is perceived as a United States-dominated setup. In addition, it implies that if another superpower emerged, then the process would be reversed. globalization in businesses involves the following services; Direct exporting involves the direct contact between the manufacturer and the consumer while indirect exporting allows the manufacture to sell his products globally with fewer risks. Apart from the above mentioned there are other processes that a manufacturer can use to get his products to the market this process is referred to as a relationship-based partnership which includes venturing Jointly which involves the coming together of many companies to sell their products. The entry method presents an opportunity to entering markets that may have been otherwise closed to exports and also it will not require any company to have substantial capital investments in the host market horizon.
FDI is another method that usually standards for Foreign Direct Investment which entails setting up manufacturing facilities although it requires heavy capital and management dedication, although direct investment method is expensive and difficult to start should it succeed the company will enjoy good returns and will establish strong market base in its new market. (O’Rourke and Williamson, 2000)
Multi-National Corporations such as BAT Company have increasingly utilized such advancements and thus in the process become a major player in international marketing. The enactments of agreements like those of the European Union, North American Free Trade Agreement and World trade organizations agreements have fostered international business for example through relaxation of tariffs and barriers to carrying out global business interactions. As it can be noted from the literature review that globalization has become the common and most successful way of carrying out business, therefore this paper will test whether this concept of globalization has a had an influence on the growth and success of international business. The role of globalization regarding the success of international trade is quite significant and it is for this reason that players such as BAT Company must acknowledge and fully comprehend the concept of globalization before going international in order to be successful. (Lee and Carter, 2005)
Methodology and Methods
This study was an exploratory research since it attempted to identify the effects of globalization on international marketing activities by different firms. Since this study was a tentative research it was based on; desired activities and time-based plans, research questions, selection of sources and types of information required, outline of procedures for every research activity to be carried out and also it was based on the framework that specified the relationships among the samples identified for this research rationale.
Probabilistic kind of sampling method was an ideal technique since the sample identified was required to give each and every respondent a known likelihood of being included in the sample chosen. Hence, the research project was carried out using simple random method of collecting data since it was hard to reach all the participants in the target population. Such scenario gave the selected individuals in the sample equal opportunity to fully participate in the research study.
The main population targeted were employees from various firms particularly those with the responsibilities of carrying out market research on international marketing strategies of the firm e.g. marketing managers. Also the common people living near the location of the company’s branches were incorporated in order to give their views on benefits and disadvantages of existence of global firms in their communities. Therefore the researcher administered questionnaires to fifteen employees from different companies and ten people living next to those companies; thus giving a total figure of thirty-five respondents which is reasonable for this study.
Methods of Data Collection
Because a sample of the population was identified the researcher utilized both open and closed questionnaires to gather the necessary information from the respondents selected from such sample identified. This technique was found effective and competent by the researcher since he was required to drop the questionnaires to the respondents and collect them at an identified future date. The main motive for selecting both open and closed questionnaires to be administered to the respondents was to present to the respondents a chance to answer liberally to the set of questionnaires administered to them during the study.
Methods for Data Analysis
Data acquired from the respondents were analyzed using various techniques. The researcher was expected to tabulate the results and particularly use percentages to analyze the data before making explanations or deductions. However, at some other instances the researcher was required to categorically use graphs and more specifically pie charts in order to clearly show the results attained.
Discussions that were arrived at reflected the data analyzed by the researcher and therefore most emphases were to know if really globalization has brought about prosperity or impoverishment to the key players in international market. The research questions posed by the researcher were answered in the discussion and therefore the researcher was required to submit his/her analysis based on the responses without any alteration in order to maintain the validity of the research study.
Significance of Proposed Research
This study will not only benefit specific companies since the results to be obtained may apply universally to all firms particularly the MNC’s who wish to go international by utilizing the advancements brought about by globalization. This study therefore is intended to shed more light on issues faced by firms when going international for example the issues faced when certain modes of market entry are selected.
Time was the biggest constraint since international activities encompass a lot of activities; therefore in order to determine the common and the most exact trend of globalization was examining different markets for a longer period of time for example one year. Also the verifiability of the answers from the questionnaires administered to respondents did not reflect the actual results regarding the impact of globalization and the entry strategies to go international; for example firms may not wish to disclose information about their marketing strategies to their rivals.
Conclusion and Recommendation
Research indicates that there are many activities that a firm does but it should always concentrate on what it can produce best. Distinctive competencies are things that give a company an advantage over similar businesses in the same industry. Research also indicates that no matter how attractive an opportunity may be the business must have the competencies to capitalize on it. Therefore firms should fully utilize the concept of marketing research in identifying its strengths, weaknesses, opportunities and threats thus aiding the company to remain both competitive and international in its scope.
Friedman, T. & Ramonet, I (1999): Duelling Globalizations, in R. Mansbach & E. Rhodes: Global Politics in a Changing World.
Hill C. (2005): Global business today. 4th Edition New York, McGraw/Irwin.
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Lee, K and Carter, S., (2005): Global Marketing: Changes, New Challenges and Strategies. 1st Edition, Oxford Press.
O’Rourke, K. and Williamson, J. (2000): Globalization and History: – The Evolution of the Nineteenth Century Atlantic Economy. Cambridge, Mass.
Raskin, P., Gallopin, P. Gutman, A. Hammond, R. & Schwartz, R. (2002): The Great Transition: The Promise and the Lure of the Times Ahead-Tellus Institute, Boston.
United Nations (2001); Global impact: – Corporate leadership in the world economy. United Nations office, New York.