PRESENTATION ON

GLOBALIZATION

PREPARED BY :
RONAK BHANDARI
ROLL NO: 48
WORLD JOINING
HANDS AND
BECOMING
ONE……
 GLOBALIZATION MEANS

Ø Expanding actions concerning the whole

world in all aspects : political, economic,
cultural,(…)
Ø A situation where a producer may produce
anywhere in the world, sell wherever he
wants, use resources of any country and
have his headquarters anywhere in the
world
Ø It not only includes increased mobility of
persons, goods, capital, data and ideas but
also infections, diseases and pollution.
The Globalization of Markets:
The fact that in many industries historically
distinct and separate national markets are merging
into one huge global marketplace in which the tastes
and preferences of consumers in different nations are
beginning to converge upon some global norm.

Examples:
Sony Play station Citicorp credit cards
Coca-Cola McDonald's hamburgers
The Globalization of Production:
The tendency among many firms to source goods and
services from different locations around the globe in an
attempt to take advantage of national differences in the
cost and quality of factors of production (such as land,
labor, capital, and energy), thereby allowing them to
compete more effectively against their rivals.
Examples:
The Globalization of Technology:

w Lowering of trade barriers made

globalization possible;
w Technology has made it a
transforming movement
w For example food processing and
packaging are the one of the area
where new entrepreneurs can enter
into a big way.
THE EMERGENCE OF GLOBAL
INSTITUTIONS

Global institutions:

Ø help manage, and regulate, the global

market place
Ø
Ø promote the establishment of
multinational treaties to govern the global
business system
Examples of Global Institutions:
Ø World Trade Organization (WTO):
responsible for policing the world trading system
and ensuring that nations adhere to the rules
established in WTO treaties. In 2008, 151 nations
accounting for 97% of world trade were members
of the WTO.
Ø International Monetary Fund (IMF):
maintains order in the international monetary system
Ø World Bank: promotes economic development
Ø United Nations (UN): maintains international
peace and security, develops friendly relations among
nations, cooperates in solving international problems
and promotes respect for human rights, and is a
center for harmonizing the actions of nations
 Globalization and
Competitiveness
Competing in “an ever tougher world
marketplace”
Bill Clinton: each nation is “like a big
corporation competing in the global
marketplace”

Globalization shifts the nature of

competitiveness
Entire industries, rather than individual
firms, are competing against each other for
market share.
 Competitive
Advantage: Firms
Competitive advantage of a firm
Ø “competitive strategy is about taking
offensive or defensive action to
create a defendable position in an
industry, in order to cope
successfully with competitive forces
and generate a superior return on
investment”
Ø if a firm is not competitive, it will go
bankrupt
Ø Firm’s competitiveness can be
measured trough profits / return on
investment etc.
Competitive
Advantage:
Countries
Countries are not companies
Ø while firms based in different countries sell
products that compete with each other, in
the country-level there are mutual benefits
from trade .
Ø Success of one country is likely to benefit
other countries (more demand for imports).
 HOW GOVERNMENTS
INFLUENCE
COMPETITIVENESS
Ø “Governments can and do have an
important and even decisive role in
promoting their own national firms
in international markets”
Ø “A government can take a long-term
perspective and establish policies
that foster a favourable domestic
environment for those sectors most
likely to be competitive in
international markets”
 THE CHANGING
INTERNATIONAL
SCENE
Managing an international business (any
Managing an international business (any firm that
engages in international trade or investment) is
different from managing a domestic business because:

Ø countries differ
Ø managers face a greater and more complex range of
problems
Ø international companies must work within the limits
imposed by governmental intervention and the
global trading system
Ø international transactions require converting funds
and being susceptible to exchange rate changes
Ø In the early 1960s, the U.S. was the
world's dominant industrial power
accounting for about 40.3% of world
manufacturing output
Ø By 2007, the U.S. accounted for only
20.7%
Ø Other developed nations experienced
a similar decline
 MODERN
HISTORY OF
GLOBALIZATION
Ø Over the past decade FDI flows into India have averaged
around 0.5% of GDP against 5% for China 5.5% for Brazil.
§ FDI inflows into China now exceeds US $ 50
billion annually vs $4 bn in 2004-05
Ø · Consider global trade – India’s share of world
merchandise exports increased from .05% to .07% over the
past 20 years vs China’s share Which has tripled to almost
4%.
Ø · India’s share of global trade is similar to that of the
Philippines economy 6 times smaller according to IMF
estimates.
Ø India under trades by 70-80% given its size, proximity to
markets and labour cost advantages.
 GLOBAL
BUSINESS
PRACTICE
Multi-national
or trans-national
corporations
(MNCs or TNCs) –
businesses with
a headquarters
in one country but
with business
operations in a
number of others.
ADVANTAGES OF
GLOBALIZATION
Ø Free movement of people (f.e. tourism,
migration)
Ø Free exchange of goods (trade gains,
lower prices)
Ø Free exchange of ideas and information
Ø Quick dispersion of innovation
Ø International division of work
Ø Quicker economic increase
Ø Higher level of life
DISADVANTAGES
OF
GLOBALIZATION
Globalisation has also thrown up new challenges
Ø -growing inequality across and within nations,
Ø Another negative aspect of globalisation is that a
great majority of developing countries remain
removed from the process
 21st Century
Values
Ø Flexibility
Ø
Ø Speed to market
Ø
Ø Innovation

Ø Handling challenges from constantly changing

conditions
Ø
Ø Hyper competition
 CHALLENGES
Ø Understanding the current status of globalisation is necessary for
setting course for future.
Ø
Ø For all nations to reap the full benefits of globalisation it is essential
to create a level playing field.
Ø George Bush’s EX President have made recent proposal to eliminate
all tariffs on all manufactured goods by 2015 may exacerbate the
prevalent inequalities.
 THE
OPPORTUNITY
Ø India has ample opportunities to develop its financial system
further.
Ø The current round of reforms, which allow pension funds to invest
more in equities, will help spur market growth, as will the continued
privatization of state-owned enterprises.
Ø India has made remarkable economic progress since opening its
economy in 1991. To continue that growth, it must now focus on
developing its financial system
 GLOBALIZATION
IS HERE TO STAY!
Globalization does have problems and
negative effects, but it is not going to
disappear. So…

We need to learn how to reap its

benefits, and minimize its costs. To do
that, we must:

• Understand its impacts

• Work to remedy the problems
• Work to spread the benefits as widely
as possible
BE ONE……
 U ..
Y O
N K
HA
T