Globalization is the process of incorporation across world-space occurring from the interchange of views, ideas, products and other aspects of world and its culture. It generates interdependence of cultural and economic activities by advancing in telecommunications and transportation infrastructure including the rise of internet. The connectedness of the economies and cultures of world is one of the major reasons of globalization (Steger, 2010).
The UK has one of the western world’s most open economies and the globalization process crucially impacts on the UK economy through various factors such as high levels of FDIs, rising import penetration level, increasing competitive advantage of UK companies, structural change in industries, increasing importance of human capital and the globalization ‘s impact on the UK companies (Steger, 2010). The report considers Morrisons as an international company and explains the globalization process and its impact over the company. Morrisons is the fourth largest supermarket chain in United Kingdom which is headquartered in West Yorkshire, England. The report explains how globalization and its forces from a number of aspects affect company in both negative and positive manner.
Globalization is a change process. It consists of the flow of forces’ multitude; the capital flow, the technology flow, information, people, cultural, knowledge and ideas flow. The propositions of these flows act as a catalyst for social, economic cultural and political change. There are various dimensions of the process of globalization (Ritzer, 2010). They include:
1. Perspectives and definitions on Globalization
2. Free Trade Issues
3. Supranational Institutions
4. Non-Governmental Organizations
5. The Movement of Citizen against Globalization.
There are various impacts of process of globalization on Morisions and they have been discussed as under:
Globalization will lead to increased competition which can also be related to product and service price and cost, technological adaptation, target market, quick production by companies, quick response etc. When a company manufactures with less cost and sells the product cheaper, it is able to increase its share of market.
Customers have a large mass of choices available in the market and this affects consumer behaviors. They want low prices and high quality. All these expectations need a reaction from Morrisons effectively, otherwise company’s sales will decrease and it will lose share in market and profit (Scholte, 2005). It must always be ready for price, service, product and preferences of customers because all of these are requirements of global market.
Exchange of Technology
One of the most thriving demonstrations of globalization is the new technology use by internationally oriented and entrepreneurial firms to exploit new opportunities of business. Procedures and internet and e-commerce hold particular potential for small and medium scale enterprises seeking to widen their engagement into new global markets. Thus competition increases for existing companies like Morrisons and this will affect the market share and sales of the company Finance Assignment Help.
Information is the most valuable yet expensive factor of production in the present environment. Information or knowledge can be easily exchanged and transferred from one place to another. If Morrisons have a chance to use information and knowledge then it means that it can adjust to this international changing. This issue is as same as with the transfer of technology issue in the international markets (Pang, 2006). The quick changing of the market requires also rapid knowledge transfer and efficient using of that information and knowledge. Thus, this can be beneficial for the company in both long and short run.
International Business Strategy
Globalization also bounds companies to have international strategies of business because strategies of one region or country cannot be used effectively in another country. Thus, it requires companies like Morrisons to have international strategies so that regional or local consumers can be benefited and that the sales can be increased. Morrisons has to make sure that it operates with international strategies which are standardized to suit culture and lifestyles of people everywhere around the world.
Moreover, these standardized strategies still need to be modified because there are certain cultures that restrict companies to advertise its products and services in certain ways. For example, countries in the Middle East will not allow Morrisons to run an advertising campaign using a female model wearing western clothes. In the same manner, company cannot use white colors to market its products and services in China since white color represents ‘mourning’ in Chinese culture (Gaburro and O'Boyle, 2003). Thus, it is necessary for Morrisons to have international strategies modified with specific culture of different countries.
Competitors and Competitive Advantage
Globalization also brings along competition as well as competitive advantage for
international companies. Free trade and entry barriers in various countries bring competitors from around the world for local companies of a country. But it also brings a number of opportunities for learning and developing on its own for any local company in a country. Competitive advantage is the factor that makes a company successful and thriving over its competitors (Brinkman and Brinkman, 2002). Thus, Morrisons should adopt various strategies that help in developing competitive advantages over competitors to avoid competition and become a market leader.
Globalization can bring both opportunities and threats for Morrisons. Thus, it is up to the company how it takes advantages of all those opportunities and avoiding threats. Company also needs to take care of certain aspects that may affect the public image of organization. In this way, it will be easier for Morrisons to acquire competitive advantage and gain sustainability within the country in which it is operating.
- Ervin, J. and Smith, A. Z., 2008. Globalization: A Reference Handbook. ABC-CLIO.
- Jones, A., 2010. Globalization: Key Thinkers. Polity.
- Lechner, J. F., 2009. Globalization: The Making of World Society. John Wiley & Sons.
- Pang, K. S. N., 2006. Globalization: Educational Research, Change and Reform. Chinese University Press.
- Ritzer, G., 2010. Globalization: A Basic Text. John Wiley & Sons.