Globalization is a phenomenon that exists in this century. This article takes a look at the importance of globalization in business.
Globalization implies that the world is getting smaller. There was a time when consumers could only access products and services which are available to them locally. But, since the advent of globalization, things have changed drastically.
With the advancement of online businesses, there has been the explosion of international trade. Consumers can get what they need from any region of the world at their doorstep.
Globalization in business.
All businesses and companies regardless of size are affected by globalization. Over the past years, information technology has increasingly connected the world and aid in the effect of globalization. Globalization of business is the change of business from a business establishment associated with a single country to one that operates in several countries. Having a strong international presence is important for the growth and expansion of any business, it places the world market at the fingertips of business owners.
Globalization can help your business play a larger role in the global economy. When you incorporate globalization best practices into your business, the business profits will dramatically increase. From the impacts of globalization in the society at large, we can say that say that it is very important in business. Here, we will now discuss the importance of globalization in business.
Importance of globalization in business.
Opens Access to the Global Market
One of the major importance of globalization in business is that it opens up global access. Businesses whether big or small are no longer confined to a particular location, they can now expand without much stress and to every part of the world.
Globalization makes businesses have access to consumers in any region of the world. Consumers can reach the international market through website content, social media networks and mobile marketing campaign. Business owners do not have to be in a particular region for them to sell their products and services.
Understanding of Cultural Differences
Another major importance of globalization in business is that it helps business people to understand other people’s way of life and cultural appropriateness. Globalization helps you to know how to incorporate this way of life and cultures to get more profit for the business.
A Simple and innocent gesture can lead to a great mishap. For instance, when a business owner wants to advertise his products or services, he knows what type of gesture would appeal more to a particular set of people and what can offend them in turn. It helps you to be able to use some certain traditions to increase your business.
Lowers Production Cost
Here is another great importance of Globalization since it can help lower business cost internationally increasing profit for businesses. Businesses which are labour intensive can spend less and make more profits by shifting their operations to countries with lower wages and cost of production. This is the reason why some American manufacturers send their work offshore to countries with low cost of production such as Vietnam and China.
Doing business globally increases business competition. When a foreign business enters another market, a face-off with the local businesses cannot be avoided. To do more than other business owners and gain a bigger market share, businesses are forced to produce higher quality products and sell at relatively cheaper prices. This makes consumers have access to wider ranges of quality products at cheaper prices.
Globalization has made the international market equal. Now, even the small businesses can come to compete without the fear of being run out of the market.
Develops Trade Opportunities
One of the important factors of globalization is developing several businesses. The establishment of various businesses creates new opportunities for importing and exporting products and services. Through communication, which is one of the major and powerful drivers of globalization, helps business establishments interact with each other, with their employees and also the consumers. For example, with the knowledge of the language English, Business owners from China can communicate with others in the US. This provides more trade opportunities for the business people. Globalization also helps give people a chance to work based on their intellectual skill. Globalization has increased the premium for scale and specialization benefiting workers in this way. This provides jobs that need h8gher skills and are better paid.
Globalization offers new opportunities to underdeveloped countries allowing them to connect with the new global market around the world. Riding on the lines of globalization, these undeveloped countries can focus on economic development through improving energy services and actual working services. This, in turn, improves the economy of these underdeveloped countries building them up. It builds them and develops them for the better bringing to them more opportunities. Globalization is also focused on the internal economic business plan in which every business offers different trade opportunities to the consumers. Globalization makes it possible for businesses to provide various products and services to a large number of consumers.
Lowers Cost Of Customer Service
E-commerce businesses need to staff a customer care department to handle complaints and orders. All these can be very expensive to maintain in some regions. Globalization has brought about the chance of outsourcing for customer service that can pay attention to customers 24/7 to remote staff abroad at a cheaper rate. This can reduce expenses and you will still able to provide excellent customer service with lesser expense.
Once a business relationship is formed with other businesses or consumers from other regions of the world, it is not easy to work together without making use of technology innovations. These technology innovations can be video meetings and screen sharing, travel applications, translation programme, document sharing, timezone applications, international calling, global calenders and many others that can cater to your business needs. Technology makes the world smaller aiding in globalization and making it important in business.
Today, globalization has become an important requirement for businesses to remain competitive, grow in the world market and to also remain in the global market. Trust is most needed when one wants to indulge in the global market. You cannot survive in the global market without trust.