GROUP 6

Presented by:
Escobido, Monica
Mendoza, Allysa Mae
Necerio, Nika
Norada, Margie
Panaglima, Kristine
Quijano, Jan Cleo
Endencio, Kyra Mae

GLOBALIZATION
AND INTERNATIONAL BUSINESS

CONTENTS
 DIFFERRENCES OF GLOBAL AND INTERNATIONAL
 GLOBALIZATION
 INTERNATIONAL BUSINESS
 BENEFITS AND CHALLENGES OF GLOBALIZATION
 FACTORS AFFECTING GLOBALIZATION
 REASONS FOR INTERNATIONAL BUSINESS EXPANSION
 DRIVERS OF MARKET GLOBALIZATION
 INTERNATIONAL V/S DOMESTIC BUSINESS

Understanding International and Global let’s check out their differences.

Global

 Global is a word that is used to refer to issues and concern of the entire world.
 It has a larger scope.
 Means all-encompassing and worldwide.
 Global companies have offices and branches as well as investment in other countries.

International

 International is a term that is used to refer to issues and concern of two or more countries.
 It has smaller scope.
 means foreign or multinational
 International companies export their products and import the product of the country
which they have trade relation but hold no investment in each other’s economies.
 GLOBALIZATION

 The process by which business or other organization develops international influence or start
operating on and a international scale is known as Globalization.
 The tendency of investment funds and business to move beyond domestic and national market
to other market around the globe is known as Globalization.

INTERNATIONAL BUSINESS

 The exchange of goods and services among individuals and business in multiple countries.
 A specific entity, such as a multinational corporation or international business company that
engages in business among multiple countries.
 A commercial transaction across country borders is known as international business.
 For example -----A company sells products in the United States, Japan, and Asia etc.

What Are the Benefits of Globalization?

Globalization impacts businesses in many different ways. But those who decide to take on
international expansion find several benefits, including:

1. Access to New Cultures

Globalization makes it easier than ever to access foreign cultures, including food, movies, music,
and art. This free flow of people, goods, art, and information is the reason you can have Thai
food delivered to your apartment as you listen to your favorite U.K.-based artist or stream a
Bollywood movie.

2. The Spread of Technology and Innovation

Many countries around the world remain constantly connected, so knowledge and technological
advances travel quickly. Because knowledge also transfers so fast, this means that scientific
advances made in Asia can be at work in the United States in a matter of days.

3. Lower Costs for Products

Globalization allows companies to find lower-cost ways to produce their products. It also
increases global competition, which drives prices down and creates a larger variety of choices for
consumers. Lowered costs help people in both developing and already-developed countries live
better on less money.

4. Higher Standards of Living Across the Globe

Developing nations experience an improved standard of living—thanks to
globalization. According to the World Bank, extreme poverty decreased by 35% since 1990.
Further, the target of the first Millennium Development Goal was to cut the 1990 poverty rate in
half by 2015. This was achieved five years ahead of schedule in 2010. Across the globe, nearly
1.1 billion people have moved out of extreme poverty since that time.
5. Access to New Markets
Businesses gain a great deal from globalization, including new customers and diverse revenue
streams. Companies interested in these benefits look for flexible and innovative ways to grow
their business overseas. A global employer of record (EoR) makes it easier than ever to employ
workers in other countries quickly and compliantly. This means that, for many companies, there
is no longer the need to establish a foreign entity to expand overseas.

6. Access to New Talent

In addition to new markets, globalization allows companies to find new, specialized talent that is
not available in their current market. For example, globalization gives companies the opportunity
to explore tech talent in booming markets such as Berlin or Stockholm, rather than Silicon
Valley. Again, a global EoR allows companies to compliantly employ workers overseas without
having to establish a legal entity, making global hiring easier than ever.

What Are the Challenges of Globalization?

While globalization offers many benefits, it’s not without challenges. Some of the hurdles
companies face when going global include:

1. International Recruiting
A common challenge global leaders face when going global is international recruiting.
Recruiting across borders creates unknowns for HR teams. First, companies create a plan for
how they will interview and thoroughly vet candidates to make sure they are qualified when
thousands of miles separate them from headquarters. Next, companies need to know the market’s
demands for salaries and benefits to make competitive offers.
To ensure successful hires, HR teams must factor in challenges like time zones, cultural
differences, and language barriers to find a good fit for the company.

2. Managing Employee Immigration

Despite the benefits of global mobility, immigration is a top challenge companies face when
expanding overseas. Immigration laws change often, and in some countries, it is extremely
difficult to secure visas for employees that are foreign nationals. The U.S., for example, is
getting stricter with granting H-1B visas, and Brexit makes immigration to the U.K. difficult.

 3. Incurring Tariffs and Export Fees

Another challenge leaders face when going global is incurring tariffs and export fees. For
companies looking to sell products abroad, getting those items overseas can be expensive,
depending on the market.

4. Payroll and Compliance Challenges

Another common global expansion obstacle is managing global payroll and maintaining
compliance with changing employment and tax laws. This management task gets even more
difficult if you’re trying to manage operations in multiple markets.

5. Loss of Cultural Identity

While globalization has made foreign countries easier to access, it has also begun to meld unique
societies together. The success of certain cultures throughout the world caused other countries to
emulate them. But when cultures begin to lose their distinctive features, we lose our global
diversity.
6. Foreign Worker Exploitation
Lower costs do benefit many consumers, but it also creates tough competition that leads some
companies to search for cheap labor sources. Some Western companies ship their production
overseas to countries like China and Malaysia, where lax regulations make it easier to exploit
workers.

7. Global Expansion Difficulties

For businesses that want to go global and discover the benefits of globalization, setting up a
compliant overseas presence is difficult. If companies take the traditional route of setting up an
entity, they need substantial upfront capital, sometimes up to $20,000, and costs of
$200,000 annually to maintain the business.
Additionally, global businesses must keep up with different and ever-changing labor laws in new
countries. When expanding into new countries, companies must be aware of how to navigate
new legal systems and ensure global compliance. Otherwise, missteps lead to impediments and
severe financial and legal consequences.

8. Immigration Challenges and Local Job Loss

The political climates in the U.S. and Europe show that there are different viewpoints on the
results of globalization. Many countries around the globe are tightening their immigration rules,
and it is harder for immigrants to find jobs in new countries.
This rise in nationalism is mainly due to anger from the perception that foreigners fill domestic
jobs or that companies move their operations abroad to save money on labor costs.
For example, the Economic Policy Institute reports that the U.S. trade deficit with China (or the
amount by which our imports exceed our exports) cost Americans 3.4 million jobs since 2001.

FACTORS AFFECTING GLOBALIZATION

 Technology Changes:- Globalization is in part where it is today due to the advancements that
the world has made in technology in general. Technology is one of the leading factors in the
evolution of Globalization.
 Transportation:- Faster and cheaper transportation cost helps multinational companies to
build manufacturing facilities around the globe while maintaining scheduled, frequent delivers of
parts and finished product.  Deregulation:-From the 1980s ahead several rules and regulation in
business were removed particularly rules concerning foreign possession.
 Removal of Capital Exchange Controls:- the movement of cash from one country to a
different was additionally controlled, and these controls raised over identical amount. If
investments in one’s own country looked unattractive, a business may purchase business in
another country.
 Free Trade:- Several barriers to trade are removed a number of this has been done by regional
groupings of nations like the EU, WTO, SAARC.
 Consumer Tastes have changed and consumers are more willing to try foreign products.
 Emerging markets in developing countries.
 REASONS FOR INTERNATIONAL BUSINESS EXPANSION

 To Expand Sales: - The first reason for companies to go on international business is sales
expansion. A big company always wants to increase their sales, so they need a new market. The
only option now is international business.
 Acquire Resources: - The developing and emerging countries have large deposits of
materials, minerals, metals and land for agricultural production. The multinational companies
eye these markets in order to get access to the resources.
 Minimize Risk: - Often, Business expands internationally to offset the risk of stagnating
growth in their home country as well as in other countries where they are operating. Further by
operating in a basket of countries are opposed to a few, they are able to manage political,
economic and societal risks better.
 Discourage Local Competitors
 First-Mover Advantage
 Increased Innovation

DRIVERS OF MARKET GLOBALIZATION

They are mostly five drivers of market globalization:-

 Technological Drivers: - Technology shaped and set the foundation for modern globalization
innovations in the transportation technology revolutionized the industry. The most important
inventions on microprocessor and telecommunication enabled high effective computing and
communication on low-cost. Finally the rapid growth of the internet is the latest technological
driver that created global e-business and e-commerce.
 Political Drivers: - Liberalized trading rules and deregulated markets lead to lowered traffis
and allowed foreign direct investment in almost all over the world. The institution of GATT and
WTO are also ongoing drivers of globalization.
 Market Drivers:- As domestic markets becomes more and more saturated, the opportunities
for growth are limited and global expanding is a way most organizations choose to overcome this
situation.
 Cost Drivers: - Sourcing efficiency and costs vary from country to country and global firms
can take advantage of this fact. Other cast drivers to globalization are the opportunity to build
global scale economies and the high product development costs nowadays.
 Competitive Drivers: - With global market, global inter-firm competition increases and
organizations are forced to play international. Strong interdependences among countries and high
two-way trades and FDI actions also support this driver.
 INTERNATIONAL V/S DOMESTIC BUSINESS

 Culture:- None of the country has same culture. Culture defines everything a society does,
from its business practices, to its response to advertising and marketing, to negotiating sales.
Though different countries have different culture, international business has to suffer from this
but domestic business need not to.
 Level of Competition:- The level of competition you will experience in foreign market is
likely to be more dynamic and complex than you experience in domestic markets.
 Market Intelligence: - The international market has more developed on collecting
information. Understanding market, competition and their data is reliable but entering on
domestic market will not give you reliable data.
 Political/Government/ Legal Systems:- Each government has its own policies relating to
foreign firms and products. The key is to understand that once you are in a foreign market you
must abide by the rules and laws of that country, not the ones in your own market.
 International Law:- Countries determine their laws based on the needs of their citizen not the
concerns of foreign companies. By and large, international law is a gentlemen’s agreement
which is honored, but not always.
 Technology:- The degree of technology can vary substantially in foreign markets if your
product or service requires a high degree of technology sophistication to use or implement then
market with law levels of technology will not be suitable for you business.
 Logistics:- Like technology, business infrastructure in foreign markets will be at different
levels of development. This may well have an impact on your ability to get your products to that
market. It is important to research new target market and understand how goods are moved
within the country before you commit to that market.
 Media:- Advertising your product and service will of course be an important component of
your marketing strategy. It is important to be aware of the types of media available and kind of
media your target market uses to gain information about products and services they wish to buy.

REFERENCES

https://www.google.com/search?
q=The+process+by+which+business+or+other+organization+develops+international+influence+
or+start+operating+on+and+a+international+scale+is+known+as+Globalization.
https://www.google.com/search?q=FACTORS+AFFECTING+GLOBALIZATION.
https://www.google.com/search?
q=REASONS+FOR+INTERNATIONAL+BUSINESS+EXPANSION.
https://www.google.com/search?q=DRIVERS+OF+MARKET+GLOBALIZATION.
https://www.google.com/search?q=%0D%0AINTERNATIONAL.