Introduction
Globalization is important for any company looking to expand into foreign markets, increase profits, and reach new customer segments. Because of globalization, businesses can locate methods of production that are significantly less expensive. Additionally, it boosts worldwide competition, lowering prices and providing customers with a greater selection of options to select from. People in both emerging nations and those that are already developed can improve their standard of living with the same amount of money because of falling prices. Consequently, the company must adequately consider the decision to pursue globalization with all factors considered before making a final choice.
Main body
To pursue globalization, the company has to consider many strategic factors, such as competitive analysis, cost-benefit analysis, risk assessment, and market potential. In addition, it is of the utmost importance that the business creates a balanced Scorecard to evaluate the costs of globalization and the possible benefits of globalization. By carrying out these steps, the organization can decide whether or not globalization is financially and strategically beneficial.
When deciding which geographic location should be pursued for globalization efforts, the company must consider various criteria, including economic growth rates in different countries or regions, political stability, and availability of resources. Furthermore, the company should also consider the cultural differences between local markets and their own to maximize success when globalization efforts are launched. Additionally, information such as trade agreements or tariffs should be considered when deciding on a target market. Consequently, it would be much more beneficial for the company to prioritize emerging economies such as India rather than only centering operations in developed economies. This is because emerging economies have a better potential for commercial growth and thus take advantage of the market.
The necessary background information would include data gathered from research such as population statistics, economic growth rates, political stability, and potential customer segments to support the decision to expand the reach to emerging economies. In addition, companies should also analyze existing market trends in different countries that may offer insight into globalization decisions. Emerging economies such as India, for instance, are significantly experiencing population increase resulting in diverse consumer segments and supply chains (Patwa et al., 2021). Moreover, many of these economies’ political stability has been improving over the years. This background information will help the company understand the dynamics of different markets and thus make better globalization decisions.
It is inevitably necessary to decide to pursue globalization since doing so has the potential to generate profits through worldwide expansion and the acquisition of new segments of customers. As a result, the company must take a strategic and cautious approach to globalization to guarantee that it is making sensible choices and making the most of the opportunities it presents. The firm can ensure that it will make the correct decision regarding globalization by taking into account all of the relevant aspects, such as strategic considerations and competitive analyses, which will, in the end, lead to growth and expansion.
Conclusion
Generally, globalization can be beneficial for the company to reach new customer segments or expand into foreign markets. However, the company must also carefully consider the demerits that could be associated with globalization before making any decisions with strategic considerations. Additionally, background information gathered from research should also be used to ensure that globalization efforts are targeted toward the right population segment. The ultimate goal of globalization is to increase profits and expand the company, thus, a globalization strategy would benefit the company.
Reference
Patwa, N., Sivarajah, U., Seetharaman, A., Sarkar, S., Maiti, K., & Hingorani, K. (2021). Towards a circular economy: An emerging economies context. Journal of Business Research, 122, 725-735. Web.