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WHAT IS
GLOBALIZATION?
Globalization can be defined as a process of rapid

economic, cultural, and institutional integration


among countries.
This unification is driven by the liberalization of

trade, investment and capital flow, technological


advances, and pressures for assimilation towards
international standards.
Globalization makes the world more accessible to

everyone.
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TYPES OF GLOBALIZATION
1. Economic: Countries that trade with many
others and have few trade barriers are economically
globalized.
2. Social: A measure of how easily information and
ideas pass between people in their own country and
between different countries (includes access to
internet and social media networks).
3.Political: The amount of political co-operation
there is between countries.
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CAUSES OF
GLOBALIZATION
Trade liberalization
Improvements in technology
Reduced cost/improvement of communications and

transportation
Deregulation of financial markets.
Increased significance of TNCs (transnational

corporations)
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TRADE LIBERALIZATION
Trade liberalization refers to a reduction of trade barriers,

this will open up worldwide markets.

Trade barriers have fallen since the Second World War.


New organizations were formed to increase integration

GATT (General Agreement on Tariffs and Trade, WTO


from 1995)

IMPROVEMENTS IN TECHNOLOGY

Improved technology makes it easier to

communicate and share information around


the world.
The most important development in the

recent years is the internet.

REDUCED COST AND IMPROVEMENT OF


COMMUNICATIONS AND TRANSPORTATION.
Fall in the real cost of transporting goods has
allowed cheaper importation and exportation of
goods.
Decline in the cost of communications has also
helped this.
Improvements in transportation have also
allowed firms to split up the production process
to cash in on varying cost conditions in different
parts of the world.
This has helped to facilitate the growth of TNCs. 7

DEREGULATION OF FINANCIAL
MARKETS
There have been moves towards removing restrictions
on the movement of financial capital between
countries.

Many countries have removed capital controls


made it easier for firms to operate globally.

Reinforced by developments in technology that


enable financial transactions to be undertaken more
quickly and efficiently i.e. the Internet.

Financial markets have increased globalization due


to their being set up in various countries.

They allow for more interface and communication


between different parts of the world over the trade of

INCREASED SIGNIFICANCE OF TNCs


After the Second World War more economic power
was shifted to corporations accelerated growth.
TNCs have grown even further due to favorable
corporation tax rates in many countries and tax
breaks, as TNCs supposedly bring in more jobs.
TNCs partake in foreign direct investment, which
increases the integration of economies.
Many TNCs want to gain entry to, for example, the
EU due to its single market, and China due to its
large and growing market.
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EFFECTS OF
GLOBALIZATION

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Globalization has led


to increase in
competition.
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Globalization causes exchange of technology.


Globalization helps in
knowledge and
information transfer
across the globe.

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Globalization has led to increase in investment levels


and rise in opportunities.
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Globalization has led to vast


Multinational and multicultural
management.
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Globalization leads to Procurement & Outsourcing.


Accenture provides Procurement & Outsourcing services
includes sourcing, demand management,
invoice processing, travel and expense processing, contract
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administration and many more.

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GDP growth rate %

10
8
6

GDP
growth
rate %

4
2
0

The graph depicts Indias GDP growth rate hence


globalization has led to economic development.
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A coca- cola stall outside


the Grand Gateway
66 shopping mall in Xujiahui ,
Shanghai

About 85% of Dubai's population


consists
of migrant workers, a majority of
whom
are from India
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ADVANTAGES OF GLOBALIZATION

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Cheaper Goods For Consumers and Better Product Quality:


Increased competitiveness may also lead to
decline in the price of goods, improvements in
quality of goods and choice of goods.

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Increase In Skilled Workers:


Increased international labor mobility has led to
an increase in skilled workers .

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Lower Cost of production:


Nike shoes are made in Vietnam due to lower cost of production.
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Improvement In Education:
The spread of the internet has helped to improve education.
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Cultural Diversity:
Increased movement of labor leads to an increase in the spread of
different cultural ideas.
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Poverty Reduction:
GDP of the developing countries has
increased twice as much as before

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Transportation:
Globalization has led to tremendous increase in transport services
across the globe.

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Diageo worlds largest spirits company having most


popular brands like Johnnie Walker, Smirnoff, Baileys
purchases 55% stake in the Indias largest liquor
company United Spirits.
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DISADVANTAGES OF
GLOBALIZATION

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Increased Commodity Price:


Prices then and now have increase tremendously.
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Exploitation Of Cheap Labor:


Workers working day and night to
produce goods for very little money.
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Cause Of Diseases:
It is the cause of very serious health problems all
over the globe.

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Increased Relative Poverty and Inequality:


We have everything by globalization,
we have nothing by globalization.
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Replacing

Increased Vulnerability And Instability:


The international Coffee chains are causing
a serious threat to local coffee shops.

Disparity:
The Economic system that has generated tremendous
wealth disparity that really seems unfair.
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Uneven Wealth Distribution:


The rich are getting richer and
the poor are getting poorer.

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People are ready to shell out


extra money for a product
that may be available at a
lower price.
This is because of the modern
marketing techniques like
advertising and branding.

The local players suffer


huge losses as they lack
the potential to advertise
or export their products on
a large scale. Therefore the
domestic markets shrink.
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HOWCANCOMPANIESCAN
ENTERFOREIGN
MARKETS?

Export Direct & Indirect


JV - Joint Ventures
Mergers and Acquisitions
Licensing, Franchising
Strategic Alliances
Management Contracts
Contract Manufacturing
FDI Foreign Direct Investments
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PEPSIS ENTRY INTO


INDIA
Pepsi, in 1988, tried really hard to enter the

Indian market since they realized that the US


market had seemed to be reaching its
saturation level. Also, India was a market that
every MNC wanted to enter due to the vast
population.
Earlier, in 1977, Coca-Cola had been thrown
out of India.
In 1980s economy was marked by high
government interventions which made it even
more difficult for Pepsi to launch in India.
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A LETTER TO PEPSI
Ilearnedthatyouarecoming
here.Iamtheonethat threwCocaColaout,andwearesoongoingtocomeback
intothegovernment.Ifyoucomeintothe
country,youhavetorememberthatthesamef
ate awaitsyouasCocaCola."

GeorgeFernandes
TheGeneralSecretaryJantaDal
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A sigh of relief!
Pepsi enters the
Indian Market

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Issues faced
at
the very
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Breakthrough:
Liberalization in
India

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PEPSIS 6 PS

Product

Price

Place

Promotion

People

Politics

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CONCLUSION
Globalization is the key factor for international business.
This new era of globalization brings with it opportunities

and also new considerations and challenges with the


dynamics of a free market.
Globalization grant access to benefit from the
international division of labor, technologies,
international specialization, inter-cultural exchange and
the consumers enjoy a wider variety of products at
lower prices.
With globalization, there comes a higher level of
thinking and strategizing. Business evolves in new
ways.
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REFERENCES
http://www.globalization101.org/what-is-global

ization/
http
://www.eolss.net/sample-chapters/c13/e1-45-0
3-16.
pdf
http://www.icmrindia.org/casestudies/cata
logue/Business%20Strategy1/Pepsi%20Entry%
20into%20India%20A%20Lesson%20in%
20Globalization.htm
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THANK YOU
BY: L001- HITAKSHI ARORA
L006- YASH BHAKKAD
L007- VARUN BORKAR

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