Question 1. Using one specific company, with which you are familiar, examine the actual and potential impacts of globalisation on that company. Explain the reasoning behind the points you make. Evaluate possible strategies going forward which the company might use to respond to the impacts of globalisation you have identified.
Table of Contents
1.1 What is Globalization?
1.2 The Importance of Globalization regarding a business 1.3 Nokia - a brief introduction
2. Characteristics and issues influencing Globalisation
3. How globalisation impacts the company
3. 1 Product
3 .2 Logistics
3. 3 Acquisitions
4. Evaluation and recommendations
4.1 Rugman and Collinsons integration-responsiveness framework 4.2 PEST analysis
4.3 SWOT analysis
Part 1 – Background
1.1 What is Globalization?
“Globalization - the growing integration of economies and societies around the world...“
The World Bank
Globalization is a very wide concept involving such diverse areas as global and domestic economies, politics, sociology and international relations. Because of this there is no general consensus regarding the definition of this phenomena. There also isn’t a clear agreement between when globalization began. Some say that it actually began when Christopher Columbus discovered America in the late 15th century and brought back such goods as tobacco, various spices and some others. While others say it’s a relatively new and began in the 19th century with the Industrial Revolution. However people tend to agree that it’s never had such wide impact as in the last 20 years due to the introduction of the internet, mobile phones, decreased costs of transportation and manufacture of various goods. It’s agreed by most people that at least the following three elements are commonly involved in globalization:
• Shrinking Space. The lives of people are becoming more and more interconnected; not just domestically, but also globally. With increasing popularity of the social networking services such as facebook, twitter and skype it’s becoming easier to interact with people on the other side of the globe. Due to easier communication between human beings, people people in some cultures are becoming more aware of global norms. Youth in Japan for example are refusing to work long hours although this was common in the past and still is amongst the older generation. • Shrinking Time. Due to the various communication and information technologies and the pace of their development, events occurring in one place have close to instantaneous impacts in other places. Catastrophic events like attacks on the twin towers of the World Trade Center during September 9/11 were reported globally in a matter of seconds and also had global effects on the prices of various stocks and currencies. • Disappearing Borders. Borders of Countries around the world are becoming significant only on maps, as regional trade blocks (e.g. EU, NAFTA) and supranational bodies (e.g. IMF, WTO) increasingly override national policy making in economic and business issues as well as law enforcement and human rights.
1.2 The Importance of Globalization regarding a business.
Globalization should be important to every company because it’s nearly impossible to succeed for a large business in current economic conditions without carefully analysing every single angle of it. Companies worldwide are outsourcing the production of some and in some cases even all of their goods to other countries due to cheaper labour costs and cheaper raw materials. The transportation is becoming cheaper and cheaper due to improving technology, hence it is often more profitable produce the goods elsewhere and transport them directly to the consumer. Companies are also exporting certain branches of their company to other...