HI5016 International Trade And Enterprise

Introduction

Globalisation is the procedure of interaction and reconciliation between people, organization, and governments of different nations around the world. It is a procedure determined by international trade and investment assisted by information technology. Globalization has developed due to advances in communication technology and transportation (Yirmibe?o?lu, 2015). With expanded global interactions comes the development of international trade, thoughts, and culture. The advancement of digital communication has opened up independent companies to an international market that they can reach through online platforms, mobile marketing campaigns, and website contents. In the following report, an effort has been made to discuss the countries affected by it, positive and negative aspects, and relate it with real-life examples (Baylis, Smith & Owens, 2017).

Globalization Affect industries

Globalization is affecting the retail industry in relation to competition, culture, and outsourcing. Every marketplace has immensely different demands, guidelines, culture, and customers’ perceptions and interests. The worldwide retailers should appreciate the customers’ tastes and their benefits; therefore, they are capable to expand worldwide emerging markets. The worldwide retailers should discover the competitive benefits .The successful worldwide retailers should comprehend their potential customers and deliberate how to against the competitors from diverse countries. Resourcing is becoming a worldwide trend that the global retailers have more intended for transferring evidence and communication. It is also distressing the manufacturing industry as Free Trade Settlements help to generate equal and open entrance to markets for the customers in participating countries. Such contracts are also meant to help all countries elaborate by creating greater monetary opportunities for exporters, manufacturers, and material suppliers (Jensen, Quinn & Weymouth, 2017). It continues to make conceivable the global exchange of new technologies, finished goods and even new concepts. Retail industry as Coles business, which is persisting in Australia market that has a positive or negative effect on the undertakings. It is the substantial way to advance the Coles reliability in the market. Indeed, globalization is the procedure of abroad amalgamation from interchanges of perspectives, ideas, products and other aspects of the culture. Worldwide retail and customer service organization have started a business in Australia market that influenced Coles sales volume and business model (Morgan, 2015).

Globalization has also affect Woolworths sales growth, margin expansion, M & A and capital management. They have enhanced concentration on the customer, integrated, technology to an associated retail experience. Globalization has conveyed about more prospects for trade, and countries that opened their doors to these overseas investments are able to earn more revenue. In this way, globalization affects industries in pursuit of market expansion (Weebly, 2018).

Positive aspects

Globalization has created and prolonged foreign trade in the world through these countries can transfer their goods to other countries and control the trade activities of the nations in the world so to have fair trade. It has benefited to retail industry as opening of trade with evolving nations produced a new era of reasonable manufacturing created on the low wages paid in those nations. The tremendous development in offshore manufacturing assisted to increase the standard of living in evolving nations, generating a new customer market for U.S. brand-name vendors and emerging businesses (Grimmer, Miles & Grimmer, 2015). As Woolworths have crushed, Coles with a 15 percent hike in profit for the first off the back of robust supermarket sales development that again exceeded its archrival, Coles. Since the second quarter of 2016/17, Woolworths’ sales have been increasing at a quicker pace than Coles and this contributes a main sign it is winning consumers over after sheeting down more than $1 billion into lowering costs and boosting client services (Barendse, Basson, Petersen & Sink, 2018).

With the assistance of globalization, delivers benefits to manufacturing industry as well. It aids to improve a country’s balance of payments. In turn, this external orientation often supports domestic companies become more aware of global opportunities. They also encountered a substantial flow of FDI, technological inflow, and the chance to serve a considerable customer base in the business. It has permitted accessing new markets, which prompted an increase in manufacturing and employment. It nurtures international trade and aid in an expansion of GDP that helped a sizable portion of the populace to join the positions of the middle class (Thorlakson, Hainmueller & Lambin, 2018).

Negative aspects

Globalization is a fault of the world's joblessness condition though it brought a few jobs prospects. There are negative aspects in the retail industry as it could upturn competition in the market between the foreign and domestic companies. This reduced the market share, profitability, and earning.  Economical labour offshore has also had a diminishing effect on earnings in the U.S., providing consumers less money to devote on retail items, which energies them to the retail chains that can deal lower prices than can small autonomous stores. Coles have not enjoyed the benefits of globalization as their financial earning fell from 13 percent to $1.6 billion as it has expended more than 200 million cutting costs to contend Woolworths. As the main reason was wage stagnation in which the wages of individuals belonging to the lower-income group and the white collar class did not expressively increase over the most recent few decades as some of their occupations have been progressively under threat of being outsourced (Garefalakis, Dimitras & Lemonakis, 2017).

There are negative aspects in manufacturing industries, as it does not protect the labours from exploitation while empowering employment opportunities and wage increments among the labours in the middle class and lower-income sets. The loss of employment is because of offshoring and outsourcing that has considered in the last few decades which needs to be stopped or overturned for globalization and international trade to be governmentally popular among the public (Daly, Pouder & McNeil, 2017).

Conclusion

According to the scenario Globalisation recommends a world in which all goods and services could be suddenly supplied from one country to another. The vast mainstream of economic exchanges takes place within national limitations. International trade is a small amount of world trade which is created and consumed within the country. It has been contended that globalization has become an influential source and has a major effect on companies’ market expansion and profitability. It is also asserted that Woolworths have gained and Coles have not enjoyed the benefits of globalization. The challenge of the period is to make globalization work towards worldwide prosperity through disaggregate improvement.

References

Barendse, J., Basson, J., Petersen, S. L., & Sink, K. J. (2018). The sustainable seafood movement viewed as a maturing social-ecological issue using a South African case-study. Ocean & Coastal Management, 151, 178-192

Baylis, J., Smith, S., & Owens, P. (2017). The globalization of world politics: an introduction to international relations (7^th Ed.). U.K:  Oxford University Press.

Daly, J. P., Pouder, R. W., & McNeil, C. R. (2017). Effects of explanations communicated in announcements of alleged labour abuses on valuation of a firm’s stock. Corporate Communications: An International Journal, 22(1), 93-112

Garefalakis, A., Dimitras, A., & Lemonakis, C. (2017). The effect of Corporate Governance Information (CGI) on Banks’ reporting performance. Investment Management and Financial Innovations, 14(2).

Grimmer, L., Miles, M. P., & Grimmer, M. (2015). A research note on the effect of entrepreneurial orientation on small retailer performance: a resource-advantage perspective. International Entrepreneurship and Management Journal, 11(2), 409-424

Jensen, J. B., Quinn, D. P., & Weymouth, S. (2017). Winners and losers in international trade: The effects on US presidential voting. International Organization, 71(3), 423-457

Morgan, R. (2015). The ALDI effect: Australia’s changing supermarket scene. Retrieved from: https://www.roymorgan.com/findings/6297-aldi-effect-australias-changing-supermarket-scene-201506220132

Thorlakson, T., Hainmueller, J., & Lambin, E. F. (2018). Improving environmental practices in agricultural supply chains: the role of company-led standards. Global Environmental Change, 48, 32-42

Weebly. (2018). The Australian Food Industry –Retail Sector: Woolworths. Retrieved from: https://retailsector-woolworths.weebly.com/impact-on-the-economy.html

Yirmibe?o?lu, G. (2015). Globalization and international trade. International Journal of Social Sciences and Education Research, 3(5), 1787-1796