The process by which the lives of all people around the planet become increasingly interconnected in economic, cultural, political, and environmental terms, along with our awareness of such interconnections is known as globalization (Appelbaum, 2001). Globalization has pushed the world into the revolution of information. The planet has become connected through technological renovations and the interdependence of economic expansion. Nations have formed one agenda, one unit, and with it, emerges the concept of winners and losers.
Globalization has increased the gap between rich and poor. As we form one world, the level of inequality rises, the strong nations get richer, and the weak nations get poorer. The retail business is revolutionizing due to globalization, yet inequality seems to be the intimidating factor that comes with it.
Globalization is being driven by five major factors: customers, markets, technology, competition, and costs. The global marketplace exposes retailers to an unprecedented number of customers. The relaxation of trade barriers, creation of trade blocs, and opening of new markets has presented the world’s retailers with the option of going global. Outsourcing has made it possible for domestic companies in the United States and worldwide to increase profits by using “cheap labor” to produce the goods that consumers demand at a much lower price.
“Minorities” from countries like Mexico, Guatemala, and parts of Asia are exploited in the “global assembly line” in order for companies to gain prestige through outstanding economic efficiency. The dependency theory suggests that the poverty of low-income countries is the immediate consequence of their exploitation by the wealthy countries on which they are economically dependent (Appelbaum and Chambliss, 173). Third world countries are exploited in order for first world countries to get ahead in the national economic arena.
Peasants work in international factories because it is the only way out of starvation; to choose to work is not a luxury of the poor, it is a means of survival. Like the social stratification that occurs within the US, the systematic inequalities will continue as we globalize, only the discriminated will now be the new foreign laborers. They become the losers in the game headed my national corporations. The winners are top executives of corporations like Gap Inc, Nike, Guess, Adidas, and all the other major corporations in the world.
Technology is a key facilitator, and the Internet is the great enabler. Technology has enabled retailers to shrink distances, integrate and connect value chains, and provide a rapidly increasing amount of information for storage, transfer, and use. Meanwhile, the Internet serves as a global channel, and provides retailers with unique opportunities, as well as challenges, for conducting business with both consumers and other businesses.
As domestic markets become increasingly saturated, globalization represents a unique opportunity to attain competitive advantage, leveraging economic benefits such as improved economies of scale and increased bargaining power with many suppliers. The supporters of globalization claim that it leads to higher employment and therefore greater prosperity, whereas opponents believe that globalization, in its current form, only serves to widen the gap between rich and poor.
Economies of scale, pooling production and taking advantage of lower factor costs mean that business on a global scale can be cheaper; and lower costs give retailers more strategic options. Companies that do not necessarily want to support sweatshops feel pressure because of competition, competition that could offer lower prices and abundant amounts of production.
Therefore, the way that we can promote change is by being educated consumers, and supporting companies that risk losing, for morality sake. Globalization is a double-edged sword; it is a game of win or lose. Though it provides an economic dependence of national manpower, many nations exploit each other in order to achieve profit and get ahead of the worldwide competition.
Courtney from Study Moose
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