The Impact of Globalization and the Internet Presents Real Challenges for Corporate Strategic Planners Across the World. What Is the Impact of Globalization and the Internet on the Corporate World? Explain the Important

Topics: Strategic management, Globalization, Strategy Pages: 2 (591 words) Published: November 26, 2012
The topic of globalization has become a hotly contested debate over the past two decades. Indeed, the increased integration of international economies have led to costs to some and benefits to others. These costs and benefits are a result of three effects of globalization, that is, expanded markets, cheaper resources or a combination of the two. Firstly, from the business perspective, one effect of globalization is that of expanded markets. This means that a business that had previously only sold its goods domestically can start selling products to other countries and this can increase their profit potential. Secondly, another consequence of bilateral trade agreements is the access to cheaper resources. Until the start of the 1990's, the People's Republic of China was largely closed off to the rest of the world. Many companies in the United States produced their goods either domestically or in areas with slightly less expensive labor. When China opened its market to the rest of the world, however, American companies were able to take advantage of the far cheaper labor. This is known as outsourcing. Cheaper labor contributes to cheaper costs, which in turn contributes to larger profits. Sometimes, but not always, this may also mean cheaper products and services. Finally, International development, as a consequence of globalization, arises out of a combination of both expanded markets as well as cheaper resources. A prime example of this is India. Before the late 90s, the information technology sector in India was largely in its infancy stage. However, coupled with an educated yet inexpensive workforce, foreign companies were able to start subsidiaries of high tech activities in cities like Bangalore. This technological know-how spread to local firms, who in turn grew as a result of expanded markets both in India as well as the rest of the world. More and more organizations are getting hooked into the Internet. They use the Internet to promote and sell their...
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