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Evolution of Globalization Essay

The term globalization denotes “globe” as a single market.

Product presence in different Markets of the world.
Production base across the globe.
Human resources from all over the world.
International investment
Transaction involving IPRs.
The advent in ICI(information, communication and technology) Rapid economic liberalization of trade and investment
The mobility of people and transactional moves
The reach of satellite channels, internet etc.


IMF defines globalization as “ The growing economical interdependence of countries worldwide through increase in volume and variety of cross border transactions in goods and services and of international capital flows and also through the more rapid and wide spread diffusion of technology” Charles Hill defines globalization “it is a shift towards more integrated and interdependent world economy”

It has two components

1. Globalization of markets
2. Globalization of production

Globalization refers to the free cross border movements of goods and services, capital, information and people. It is the process of creating network connections among the actors of multinational distances mediated through a variety of flaws. Westernatization, wallmartization, Americanization, Mcdonalization, disnaffication, coco-colonization


establishment of GATT(General Agreement of trade and tariff) and WTO regional integration
NAFTA, ASZN, European union, SAARC, OPEZ, European integration declining trade barriers-tarrifs and quotas

growth in foreign direct investment
advancement in technology
emergence of international monetary fund.

1. Globalization of markets
2. Globalization of production
3. Globalization of investment
4. Globalization of technology

Globalization of markets: integrating and merging as the world market a s single market.

Size of the company
Market for non-consumer goods, industrial goods and financial goods. Different strategies required for different markets
Reasons for globalization of markets
Large scale industrialization and mass production
To reduce the risk and to diversify the portfolio.
To increase the profit
The failure of domestic companies
Adverse business environment
Globalization of production:
Cheap raw materials, cheap labour and high quality
Imposition of restriction on imports
Reduce the cost of transportation

Globalization of technology:

Revolution in telecommunication, information technology and transportation technology



Free flow of capital, tecnology etc
Increase in industrialization
Spread of production facilities
Balance development of world economics
Increase in production and consumption
Commodities with lower price and high quality
Cultural exchange
Demand for variety of products
Increase in job and income
High living standards
Balance human development
Economic liberalization


It kills domestic business
Exploit human resources
Leads to unemployment and under employment
Decline in income
Transfer of natural resources
National sovereignty at country stake.
Leads commercial and political colonization
The divide between the rich and the poor
The developing and under-developing countries
Unemployment and mass layoff
Adverse balance of payment
Volatile of markets
Loss of cultural identity
Shift of power to multinationals
Effects of globalization
The globalization may be defined as the process of integration and convergence of economic, financial, cultural and political system across the world


international trade, investments and capital flaws
integration of economics
cross border movements of goods and services, technology and capital.


liberalization of capital movement
deregulation of financial systems
cross border capital flows
listing in international changes.


It is the convergence ofculure


After the world war 2, the convergence of the political system The response strategies to globalization forces for emerging companies


The pressure to globalization is low

Understands the home market or the strength lies in deep understanding of the market or their competition assets are customized to local market. The company should adopt defensive strategy that focuses on leveraging the local assets in the market segment where internationals are weak eg: Videocon washing machine introduced semi automatic machine


where the industrial pressure to globalization is low.
They possess competitive skills and assets that can be transferred abroad Companies can focus on expanding to markets similar to home basic using competencies developed at home. Ex: haldiram


where the industry pressure to globalization is very high.
To compete in industries with globalization pressure is highly difficult situation for local companies.


High pressure to globalize and transferrable abroad and competitive advantage that can be leveraged overseas by upgrading the capabilities and resources.

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