Globalization is the trend toward greater economic, cultural, political and technological interdependence among national institutions and economies. Globalization is a trend characterized by denationalization and in different from internationalization. Globalization means an increasingly freer flow of goods, services, money, people and ideas acrouss national borders. Globalization of Markets – refers to convergence in buyer preferences in markets around the world. Benefits of globalization of markets
Reduce marketing cost – Companies that sell global products can reduce cost by standardizing certain marketing activities. Creates new market opportunities – a company that sells a global product can explore opportunities abroad if the home market is small or becomes saturated. Levels uneven income streams – a company that sells a product with universal, but seasonal, appeal can use international sales to level its income stream. Yet local needs are important –
Globalization of Production – refers to the dispersal of production activities to location that help a company achieve its cost-minimization or quality maximization objectives for a good or service. Benefits of globalization of production
Access lower-cost workers – global production activities allow companies to reduce overall production cost through access to low-cost labor. Access technical expertise – companies also produce goods and services abroad to benefit from technical know-how. Access production inputs – Globalization of production allows companies to access resources that are unavailable or more costly at home. General Agreement on Tariffs and Trade – GAAT – a treaty designed to promote free trade by reducing both tariffs and nontariff barriers to international trade. Tariffs are essentially taxes levied on traded goods
Nontariff barriers are limits on the quantity of an imported product.
Falling barrier to trade and investment
World Trade Organization – is the international...
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