CO-OPERATIVES

AND RURAL

MARKETS

GLOBALISATION OF

BUSINESS

An international business – any business with international sales, sourcing, or investment

A multinational business – any business with productive activities in 2 or more

countriesA global business – a business that takes a global approach to production and sourcing (Coca-

Cola, Intel)

What is Globalization?

The shift toward a more integrated and interdependent world economy.

Two components:

The globalization of marketsThe globalization of production

Globalization of Production

Vizio flat panel TV is designed in a small office in Californiaassembled in MexicoFrompanels made in South Koreaelectronic components made in Chinamicroprocessors made in the U.S.

Globalization of markets

In the past, each country had its own companies in many industries and its own products

But the most global markets are for standard goods

Aluminum WheatMicroprocessorsAircraft

For many consumer end-products, huge differences still exist among national markets

Food, clothing, entertainment

COMMODITY

§ An Product Or Material That Is Brought And Sold .

§ Every Kind Of Movable Property, except Actionable Claims , Money And Securities.

Commodity market:Important constituent of the financial markets of any country

A wide range of products viz., Precious metals ,base metals ,crude oil, energy And soft commodities like palm oil ,coffee etc.Are traded.

Evolution of commodity market in india :

Bombay cotton trade association ltd., Set up in 1875 was the first organised futures market. Bombay cotton exchange ltd.- 1983The futures trading oil seeds - 1900 Gujarati Vyapari Mandali

Different types of commodities traded:

§ Precious Metals : Gold, Silver, Platinum Etc§ Other Metals : Nickel, Aluminium, Copper Etc§ Agro Based Commodities : Wheat ,Corn , Cotton, Oils, Oilseeds§ Soft Commodities : Coffee, cocoa, Sugar, Etc§ Live-stock : Live Cattle , Pork Bellies Etc§ Energy : Crude Oil , Natural Gas , Gasoline Etc

Leading commodity market in india:

(MCX) Multi Commodity Exchange Located In Mumbai.

(NCDEX) National Commodity And Derivatives Exchange Ltd. Located In Mumbai.

(NBOT) National Board Of Trade Located In Indore.

(NMCE) National Multi Commodity Exchange Located At Ahmedabad.

Two factors underlie globalization:

‡ Decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II.

‡Technological change

Drivers of Glozbalization

Average Tariff Rates on Manufactured Products

1913 1950 1990 2002

France 21 % 18 % 5.9 % 4.0 %

Germany 20 % 26 % 5.9 % 4.0 %

Italy 18 % 25 % 5.9 % 4.0 %

Japan 30 % -- 5.3 % 3.8 %

Holland 5 % 1 % 5.9 % 4.0 %

Sweden 20 % 9 % 4.4 % 4.0 %

UK -- 4% 5.9 % 4.0 %

US 44 % 14 % 4.8 % 4.0 %

Affects of Lowering Trade Barriers

Figure 1.1: Volume of World Trade and World Production, 1950-2004

100

600

1100

1600

2100

2600

3100

Ind

ex 1

950=

100

Total Merchandise Exports World Production

The Role of TechnologyLowering of trade barriers made globalization possible;technology has made it a transforming movement

Figure 1.3: Internet Users per 1000 People, 1990-2003

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

In

tern

et U

sers p

er 1000 p

eo

ple

Japan United States European Monetary Union World

Internet Usage Growth

The emergence of global institutions

World Trade Organization (WTO) International Monetary Fund (IMF)World Bank which promotes economic development , the United Nations (UN)

The Globalization Debate

ProLower prices for goods

and servicesEconomic growthIncrease in consumer

incomeCreates jobs (for many)Countries specialize in

production of goods and services that are produced most efficiently

ConDestroys

manufacturing jobs in wealthy nations

Wage rates of unskilled in advanced countries decline

Companies move to countries with fewer labor and environment regulations

Loss of sovereigntyHomogenized cultures

Managing in the Global Marketplace

Managing an international business is

different

Strategy of Globalization

World Bank Advisor Dr Intermit Gill stated: Cities are at the core of a development strategy based on international integration, investment and innovation.

In the Report (2006) East Asian Renaissance,

1) Unequal distribution of wealth disparity in income.

2) Rapid privatization government driven public sector units are on sale.

3) Uneven growth in respect of different sectors.4) Extreme mechanization is reducing demand for

manual labours.5) Both employee and consumer exploitation are

on rise by private sector.

THE IMPACT OF GLOBALIZATION IN INDIA

Impact of Globalization, In Particular On The Development Of

India,

Social ServicesGrowth of Slum CapitalsGrowth of Unemployment

PovertyGrowth of management

educationDemoting Agriculture