Solution
Soumi answered on
May 17 2020
MANAGING ACROSS BORDERS
(TOPIC 2)
Executive Summary
The topic of discussion in this assignment is business across the globe. The initial part of the assignment deals with the impact of globalisation on the business. The steps that are required to be taken for attaining the competitive edge follow it. The contribution of offshoring and outsourcing has been discussed after that. The opportunities and the challenges that the firm faces that have been discussed in the later part of the assignment. Recommendations to cope up with the challenges and exploit the opportunities have been discusses in the later part of the assignment. The risk of imitation, fierce competition and similar challenges are faced by the organisation. The recommendation include imparting training to the employee and providing flexibility in managing the stores.
Table of Contents
Introduction 4
Globalisation’s impact on business 5
Steps to be taken by international managers to beat the competition 6
Contribution of Outsourcing and Offshoring to Globalisation 7
Challenges and opportunities imposed by Globalisation 8
Recommendations 9
Conclusions 10
References 11
Appendix 1 13
Appendix 2 14
Introduction
The opening up of the economy for the international market for attaining competitiveness can be refe
ed to as globalisation. Globalisation help in removing trade ba
iers among nations by ensuring free flow of technology and capital across the globe. Globalisation is the reason behind the existence of multinationals. It paves the way for the domestic firms to operate across the globe. Firms such as Amazon, Walmart and similar firms have operations across continents. The same has been made possible due to the globalisation.
There is a significant impact of globalisation on a firm. According to Buckley et al. (2017), there seems to be an a
upt rise in the competition once a domestic economy is opened for multinationals. The change in technology is also fast that leads to the overall improvement of technology and infrastructure. The market dynamics tend has changed after globalisation. Firm that were market leaders before globalisation have ceased to exist after globalisation. This was because they were unable to sustain the tough competition in the market. Globalisation helps in development of under-developed as well as developing economies. The management needs to understand the taxation laws, labour laws and such laws of the nation in which it wishes to operate. There is a difference in the skills and availability of labour across different regions of the globe (Buteau et al. 2016). The firms need to adjust their production process or impart training to the employees to ensure efficient utilisation of labour and other resources. An organisation operating at global level is bound to face a number of issues such as labour issues, taxation issues, reporting issues and similar issues.
The firm that has been chosen here is Walmart. It is a retail giant, which owns a chain of departmental stores, hypermarkets ad grocery stores. The operational efficiency of Walmart is one of the best across the globe. The unique point of the firm is huge variety combined with low price. Across various countries, it faces competition from different types of firm. Some are domestic and some are multinationals. Recently, there have been some issues with Walmart in the state of China. As per the views of Cantwell et al. (2014), cultural differences and such issues are common for multinationals and firms need to deal with such sensitive issues with utmost care and proficiency. Majority of the supporting operations such as transportation, logistics and others are outsources by the firm. Bulk procurement is done to increase the bargaining power that helps the firm in getting attractive discounts and passing the same on to the customers. The challenges of globalisation for a firm have been mentioned in this assignment. Few recommendations have also been provided for dealing with the challenges that the firm faces.
Globalisation’s impact on business
Globalisation has had a deep impact on the business. It has led to increase in competition, faster objection of technology and lower margins for producers. The effects of globalisation are both negative and positive and it depends upon the environment in which the firm operates. In the past, domestic sellers dominated the market but after the advent of globalisation, the competition for such sellers has increased rapidly. The margins have been cut as firms try to gain market share by lowering price to remain in the market. Multinationals enjoy the advantage of economies of scale,
anding and such benefits.
On the other hand, local players enjoy the advantage of knowing the market better than multinationals. The idea of requirement is better in case of domestic companies over multinationals. As the competition increases, the benefits of the ultimate consumer increase. According to Caraway (2016), the quality improves and along with that, the price decreases. All firm try to sell a product or service that is a value for money. In the past firms were concerned with the products or services that they need to deliver to meet the requirement of the consumer. However, after globalisation, the competition has increases so significantly that the firms are required to keep an eye on the strategies of the competitors also. Before globalisation, the major factor was margin but at present times the marketer focus on increasing market share. This is done by providing quality products at a lower price. This has led to shrinkage of margins.
Globalisation has led to improvement of technology that is used for producing goods and services. In order to produce quality products at a cheaper cost, technology plays an important role. After globalisation, the firm can procure machines form anywhere across the globe. This was not possible in earlier days due to which the firms had to rely on domestic technology. It has also paved the way for the development of e-commerce. As per the views of Cavusgil et al. (2014), after the globalisation, even the local players have started opting for high-end technology to match the quality requirements of the multinationals. The market size has increased significantly after globalisation as the rural areas are tapped by multinationals to improve the market share.
The employment level has also increases substantially after globalisation. Attempts are made by firms to reduce the employee turnover up to a great extent. Due to globalisation, similar products are sold by a variety of consumers. Therefore, in addition to products the firms have to concentrate on service also. This helps in distinguishing the product of a seller from that of other seller. The variety available to a customer has increases therefore; the customer retention has also decreased. Any issue in the product or service may lead to the customers opting for the product of competitor. Therefore, the...