Presented By :

ADITI WALIA

In simple economic terms,

Globalization refers to the

process of integration of the World into

one huge market. A company which has

gone global is called a “Multinational

company”(MNC)/ Transnational

Company (TNC).

The Global company views the World as

one market place, minimises the

importance of national boundaries,

raises capital & market wherever it can

do the job best.

►It is a conglomerate of multiple units

(located in different parts of the Globe) but all

linked by common ownership.

►Multiple units draw on a common pool of

resources such as money, credit, information,

patents, trade names & control systems.

►The units respond to some common strategy.

To be specific, a Global Company has three characteristics

WHY DO COMPANIES GO

GLOBAL..?

→ The rapid shrinking of Time & Distance

across the Globe , thanks to

-- Faster Communication

-- Speedier Transportation

-- Growing Financial Flows ; and

-- Rapid Technological Change .

→ It is being realised that domestic markets

are no longer rich and adequate. Eg. The

Japanese have flooded the U.S. Markets

with Automobiles & Electronics since

their home market was not large enough

to absorb whatever was produced.

→ Companies often set up overseas plants to

reduce the high transportation cost.

→ The reason may vary from industry to

industry. For instance, Petroleum and

Mining Companies often go global to secure

a reliable and cheaper source of raw

materials and other factors. Cheap labour in

India lure foreign investors.

MANIFESTATIONS OF

GLOBALIZATION

❖Configuring anywhere in the world. ❖Interlinked & interdependent economies.❖Lowering of trade & tariff barriers.❖Infrastructural resources & inputs at international cost.❖Increasing trend towards Privatization.❖Mobility of Skilled labour.❖Market side efficiency.❖Formation of regional blocks.❖Economies of scale.❖Increase in revenues & profits.

CHALLENGESOF

GLOBALIZATION

❖High capital investments.❖Political instability can harm the investments.❖Loss of intellectual property rights.❖Outflows of technology transfers.❖Mandatory local shareholding participation.❖ Ruining the previously established Domestic cultures.❖ The constant energy utilization required for this globalization interchange pollutes the environment.

PROCESS OF GLOBALIZATION

LOCALISATION

INTERNATIONALISATION

THEPRODUCT

PRODUCT DESIGN

PRODUCT DEVELOPMENT

PRODUCT TESTING & QUALITY ASSURANCE

PRODUCT LOCALISATION

LOCAL PRODUCT TESTING & QUALTY ASSURANCE

LOCAL PRODUCT MARKETING

EXAMPLES OF

GLOBALIZATION

GLOBALIZATION IN

ECONOMICS

oSome automobiles use parts from others countries, as

in a car being assembled in the U.S. with the parts

coming from Japan, Germany & Korea.

oThe free World Trade Organization supervises the World

trade.

oThe N.A.F.T.A ( North American Free Trade Agreement

is a trade block in North America.

oThe European Union is an economic & political union of

28 countries that are located primarily in Europe.

g GLOBALISATION IN

TECHNOLOGY

▪The INTERNET is a major contributor to globalization, not

only technologically but in other areas as well.

▪Global News Networks like, like CNN, contribute to the

spread of knowledge.

▪Military cooperation between countries such as Strategic

Arms Reduction Strategy or Anti - Terrorism agreements.

▪Environmental cooperation has spread to help reduce CFC

emissions to slow the depletion of Ozone, eg. Montreal

Protocol.

GLOBALIZATION IN

BLENDING OF CULTURES▪ Food is one factor of Globalization. One can find people

eating Sushi in Peru or Indian food in Europe.

▪Satellite televisions allows shows from one country to be

broadcast in many other countries.

▪The “Silk Road” was a trade route between China and the

Mediterranean Sea area and it allowed the exchange of not

only goods but Culture & Knowledge.

▪Improved Travel facilitated the growth of globalization, as

people moved for a better job, better life or fled from

Danger or oppression.

GLOBALIZATION & INDIAN ECONOMY

AGRICULTURE➢All three sectors of agriculture viz. farming,

marketing & industrial support have shown

tremendous progress.

➢Organic & hybrid variety of seeds have

revitalized the entire sector thanks to

introduction of complete mechanization of farms

by globalization.

➢A boost has been provided to agricultural

exports since globalization has fetched the

farmers with new markets along with E-

Commerce facilities.

➢On the other hand, there are issues like GM

Crops, Competition in pricing, WTO Compliances

& Relaxation of Import Duties that are harming

the Indian farmers.

INDUSTRY➢ It has become possible for the present day Govt.

schemes such as Make in India, Skill India, Digital

India .

➢Increase in Global competitiveness of Indian

industries by way of entering into various

agreements of Joint Ventures, Mergers &

Acquisitions.

➢The Export-Orientation is also increasing by

setting up of various Special Economic Zones.

➢There is abundant availability of loans,

microfinance & even other forms of credit for small

scale industries.

➢The entry of MNCs has added to the competition

leading excessive pressures on domestic co. to

both raise Quality & Productivity to ensure

survival.

BANKING & FINANCE➢Globalization has opened door to Foreign

investors to enter the Domestic market not only

leading to increase of competition but also

innovativeness.

➢Banking structures & products have become

more streamlined & efficient.

➢The whole industry is undergoing an apparent

transition due to Large-Scale market shifts,

competition & technological developments.

➢The domestic financial intermediaries have

taken on more risk-intensive roles to ensure

survival.

➢The industry has been transformed from a

conservative outlook to a highly dynamic one as

many new regulatory bodies & financial

institutions have come up.

CONCLUSION

The globalized presents enormous opportunities

for businesses, intercultural marketplaces allow

a larger customer base for differing

Demographics, larger market & human source

potential.

On the other end of the bargain, managers are

tasked with the herculean task of localizing

products & services in such a way that minimizes

the adverse cultural & environmental effects

caused by the rapid global expansion to maintain

an ethical operation.