impact of globalization on the future of international marketing

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   Ref: – International Business & Economics Research Journal

   There are five main areas affected by globalization: globalization of and by the economy, globalization of and by information/communication technology, globalization of and by politics, globalization of and by business, and globalization of and by education.

   Globalization Of And By The Economy : – The globalization of the world economy is reflected in many ways. The General Agreement on Tariffs and Trade (GATT) simulates free trade between countries by encouraging the reduction of tariff and non-tariff barriers (e.g. local content requirements, safety regulations, etc). This allows firms to more easily trade and move around the world. A result of this increased mobility is the increasingly large scope of money and capital markets and looser regulations on foreign direct investment. Multinationals now have more freedom and are more dominant in the international business environment then ever before. Adam Smith’s theory of the “invisible hand” is now a global reality.

   Globalization Of And By Information/Communication Technology : – The convergence of information and communication technologies has resulted in a lower cost for information, furthering globalization. Technological developments have also resulted in miniaturization and products have become smaller, weighing less. As a result transportation costs have dropped dramatically and global sourcing has become common practice. Every silver lining has a cloud. Technology typically conforms to the laws, regulations and style that prevail where it is developed. So a product which might be good for the USA might not be in India due to the cultural or educational differences (or different levels of economic development).

   Furthering global standardization, English is becoming the world language. Notwithstanding this, there remain important language barriers. For example, Chinese and Japanese users prefer software that is in their log language. Imagine how unsuccessful the World Wide Web would be in Western Europe if browsers only support the Chinese language. It is easy to understand the frustration of non-English speakers who wish to use information technology. Converging standards suggest cultural homogenization will continue.

   Globalization Of And By Politics: – In the recent past (1945-1990) the world was divided into three economic blocks: the first world (the free world), the second world (the communist block) and the third world (developing countries). The fall of the communist block ended this division. After 1990, everyone aspired to join the first world with its system of market economy and democracy. This has come to mean development in the image of the first world.
   Globalization implies that there are forces that are global, objective and universal which restrict not only
   diversity, but also the scope for national governments’ policy formulations.

   Globalization Of and By Business: – The globalization of markets is one of the most important developments of this century. Its impact on the economic transactions, processes, institutions, and players is dramatic and wide ranging. It challenges established norms and behavior and requires different mindsets. Yet, globalization creates opportunities for the well-prepared participants who are visionary and have insight. The globalization of markets reflects the growing interdependency among the economics of the world and the multinational nature of sourcing, manufacturing, trading, and investment activities. It also reflects the increasing frequency of cross -border transactions and financing and the heightened level of competition. These phenomena are fueled by advances in information, communication, and transportation technologies with increased global economic growth.

   Globalization Of And By Education: – In addition to implying a different nature to economic transactions and a diverse set of players, globalization of markets causes the individual firm to operate within a more complex political, legal -regulatory, and cultural context. To operate successfully in less familiar environments, managers must develop an understanding of the government sector, regulatory framework, and cultural idiosyncrasies of the markets where they wish to do business. Not only will management need to develop knowledge of country specific factors, but must also understand the interplay among these factors. Management needs local knowledge but also global knowledge of business, law, politics, and societies.
   Managers study the best practices of leading companies, not necessarily those in the same line of business , and then try to implement them in their own organizations. There are now consortia of firms who agree to facilitate benchmark studies at each other’s facilities. Often managers must further their formal education in order to keep up with and understand the new trends that are emerging with international business and globalization.

   Answer by Anup 546 days ago