Globalization

Globalization

Student’s Name

University Affiliation

Question 1:   Are you for or against globalization? Why

I support globalization of a business

My support is because of various reasons like:

i.    Growth Opportunities

Companies are searching for ways to expand their businesses, but a saturation in the local markets leads to globalization. Globalization helps in full utilization human and capital resources such as machinery and technology.

ii.    Economies of Scale

In the modern world, companies must seek economies of scale to attain higher levels of production spread over the massive fixed overheads to lower the cost of production per unit. They also want to maximize the use of their manufacturing machinery and distribute the costs of research and development over the product life cycle. Hence investing in globalization helps an organization enjoy economies of scale.

iii.    Resource access and cost saving

 A company should invest in globalization to access the resources at lower cost. Globalization means going near the source of raw materials. Organizations can locate themselves in the zones that have adequate raw material cost and an enormous and cheap labour supply. Moving abroad save a company a lot of expenses in the form of taxes.

iv.    Diversified Markets

Due to the technological advances in the world, the culture of the customers is becoming harmonized. By entering the international market, the business can acquire more clients hence expanding its customer base. Offering commodities and services to new customers bring up continued business building brand reputation on a global scale. Involvement in world trade protects a firm from shifts in the consumption pattern during an economic crisis.

Question 2

My recommendation is for the company to go global because it is associated with plenty of advantages like;

1.    Free trade agreements

Countries worldwide have reduced the barriers like tariffs, value added taxes, and subsidies to allow more companies to come and do business in their nation. It allows companies to do business easily in various countries. Free trade areas include the European Union, North American Free Trade Agreement and the Mercosur countries of South America.

2.    Technological Advancements

Technological growth is at every level from the widespread of internet access to the standardization of transportation containers is a key driver of globalization.  Integration of manufacturing processes makes it possible for a company to serve a global size market. The Internet provides the customers with a 24/7 access to products from any location.

3.    Capital mobility

Money movement across borders is making it easier for companies to secure finances from a variety of sources even internationally. It increases the companies’ pool of funds making it easier for a company to expand into any market without the fear of the source of financing.