Running Header: GLOBALIZATION

Globalization

Globalization

Introduction

The contemporary business environment can be ideally defined as a highly competitive entity. The companies in this environment are no longer bound to function in limited geographic regions, where they have to compete on a global scale. Globalization has made possible several innovations and technological advancements, however it has also created several challenges for the organizations. The customers in this environment have become highly empowered, and their purchasing decision is now more complex. These customers have access to limitless information, and they can choose to select any product that they want, from a wide range of brands. The concepts of customer loyalty have become very uncommon, as they customers now tend to purchase the product of any brand that they desire. Hence the companies no longer have the advantage of having a stable and well established customer base. The concepts such as online stores and e shopping have enabled these customers to select any product that they want, regardless of the brand. In order to able to achieve sustainable development in this environment, the companies have to make drastic changes to their organizational structures. If these companies are able to make the necessary changes and develop their structures and policies as per the business environment, they can achieve several competitive advantages which can help the company enhance the customer base.

The globalization of business has presented several opportunities for the worldwide corporate community (Amin & Thrift, 1995, pp. 107). If these companies have the ability to adequately asses the environment and make strategic decisions, they can experience exponential growth. The globalization process has presented to the organizations a vast global market present in various countries, and this resource can be used to help the company diversify its operations. The operations of the companies in multiple global markets, allows them to diversify their risk; as they are not dependant on the business environment of a specific company. In the modern environment the global forces have several impacts on the organizations, and if these companies manage to cope with these forces; they can achieve several competitive advantages.

Discussion

Outsourcing: Resources and Functions

One of the greatest advantages of the process of globalization is that the companies can look to attain resources from several different countries. In the developed countries the cost of the resources is generally very high; hence the companies are forced to purchase these raw materials at generally higher costs, and eventually increase the cost of production. The phenomenon of globalization has opened several opportunities for these companies, as they can now look to purchase low cost resources from the developing countries (Grossman & Helpman, 2005, pp. 149). This allows the company to drastically decrease the cost of the production process, and hence enable it to offer low cost products to the market. The company can also seek to expand its customer base by offering the products in to the vast emerging markets. The developing countries also benefit from this process as they are able to increase their trade function and attain ...