PRESENTATION ON GLOBALIZATION

PREPARED BY : RONAK BHANDARIROLL NO: 48

WORLD JOINING HANDS AND BECOMING ONE……

GLOBALIZATION MEANS???????

Expanding actions concerning the whole world in all aspects : political, economic, cultural,(…)A situation where a producer may produce anywhere in the world, sell wherever he wants, use resources of any country and have his headquarters anywhere in the worldIt not only includes increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution.

The Globalization of Markets: The fact that in many industries historically

distinct and separate national markets are merging into one huge global marketplace in which the tastes and preferences of consumers in different nations are beginning to converge upon some global norm.

Examples: Sony Play station Citicorp credit cards Coca-Cola McDonald's hamburgers

The Globalization of Production:The tendency among many firms to source

goods and services from different locations around the globe in an attempt to take advantage of national differences in the cost and quality of factors of production (such as land, labor, capital, and energy), thereby allowing them to compete more effectively against their rivals.Examples:

The Globalization of Technology:

Lowering of trade barriers made globalization possible;Technology has made it a transforming movementFor example food processing and packaging are the one of the area where new entrepreneurs can enter into a big way.

THE EMERGENCE OF GLOBAL INSTITUTIONS

Global institutions:

help manage, and regulate, the global market place

promote the establishment of multinational treaties to govern the global business system

Examples of Global Institutions: World Trade Organization (WTO): responsible for policing the world trading system and ensuring that nations adhere to the rules established in WTO treaties. In 2008, 151 nations accounting for 97% of world trade were members of the WTO. International Monetary Fund (IMF): maintains order in the international monetary system World Bank: promotes economic development United Nations (UN): maintains international peace and security, develops friendly relations among nations, cooperates in solving international problems and promotes respect for human rights, and is a center for harmonizing the actions of nations

Globalization and

CompetitivenessCompeting in “an ever tougher world marketplace”

Bill Clinton: each nation is “like a big corporation competing in the global marketplace”

Globalization shifts the nature of competitiveness

Entire industries, rather than individual firms, are competing against each other for market share.

Competitive Advantage: Firms

Competitive advantage of a firm“competitive strategy is about taking

offensive or defensive action to create a defendable position in an industry, in order to cope successfully with competitive forces and generate a superior return on investment”

if a firm is not competitive, it will go bankrupt

Firm’s competitiveness can be measured trough profits / return on investment etc.

Competitive Advantage: CountriesCountries are not companies

while firms based in different countries sell products that compete with each other, in the country-level there are mutual benefits from trade .

Success of one country is likely to benefit other countries (more demand for imports).

HOW GOVERNMENTS INFLUENCE COMPETITIVENESS

“Governments can and do have an important and even decisive role in promoting their own national firms in international markets”

“A government can take a long-term perspective and establish policies that foster a favourable domestic environment for those sectors most likely to be competitive in international markets”

THE CHANGING INTERNATIONA

L SCENEManaging an international business (any firm that engages in international trade or investment) is different from managing a domestic business because:

countries differ managers face a greater and more complex range of problems international companies must work within the limits imposed by governmental intervention and the global trading system international transactions require converting funds and being susceptible to exchange rate changes

In the early 1960s, the U.S. was the world's dominant industrial power accounting for about 40.3% of world manufacturing output

By 2007, the U.S. accounted for only 20.7%

Other developed nations experienced a similar decline

MODERN HISTORY OF

GLOBALIZATIONOver the past decade FDI flows into India have averaged around 0.5% of GDP against 5% for China 5.5% for Brazil.

FDI inflows into China now exceeds US $ 50 billion annually vs $4 bn in 2004-05

· Consider global trade – India’s share of world merchandise exports increased from .05% to .07% over the past 20 years vs China’s share Which has tripled to almost 4%.

· India’s share of global trade is similar to that of the Philippines economy 6 times smaller according to IMF estimates.

India under trades by 70-80% given its size, proximity to markets and labour cost advantages.

GLOBAL BUSINESS PRACTICE

Multi-national or trans-national corporations (MNCs or TNCs) – businesses with a headquarters in one country but with business operations in a number of others.

ADVANTAGES OF GLOBALIZATIONFree movement of people (f.e. tourism, migration) Free exchange of goods (trade gains, lower prices)Free exchange of ideas and information Quick dispersion of innovationInternational division of work Quicker economic increase Higher level of life

DISADVANTAGES OF

GLOBALIZATIONGlobalisation has also thrown up new challenges-growing inequality across and within nations,Another negative aspect of globalisation is that a great majority of developing countries remain removed from the process

21st Century Values

Flexibility

Speed to market

Innovation

Handling challenges from constantly changing conditions

Hyper competition

CHALLENGESUnderstanding the current status of globalisation is necessary for setting course for future.

For all nations to reap the full benefits of globalisation it is essentialto create a level playing field. George Bush’s EX President have made recent proposal to eliminate all tariffs on all manufactured goods by 2015 may exacerbate the prevalent inequalities.

THE OPPORTUNITY

India has ample opportunities to develop its financial system further. The current round of reforms, which allow pension funds to invest more in equities, will help spur market growth, as will the continued privatization of state-owned enterprises. India has made remarkable economic progress since opening its economy in 1991. To continue that growth, it must now focus on developing its financial system

GLOBALIZATION IS HERE TO

STAY!Globalization does have problems and negative effects, but it is not going to disappear. So…

We need to learn how to reap its benefits, and minimize its costs. To dothat, we must:

• Understand its impacts • Work to remedy the problems • Work to spread the benefits as

widely as possible

BE ONE……

THANK YOU..