Globalization has had an increasing vital impact on international marketing & a major trend in business. This is nothing new. International trade has been going on since the beginning of civilization. However, in the 20th century, trade expanded rapidly due to advances in communication, transportation, and management. As the cost & complexity of operating overseas is reduced by globalization, more markets are susceptible to international organizations. These organizations or multinational corporations produce & sell products or provide services in two or more countries. There are over 40,000 multinational corporations currently operating in the global economy, most of these corporations are manufacturers operating in fields that frequently …show more content…
fair trade. This is the prevention of unfair cutting of prices. This can be abhorred by a court order or the establishment of minimum retail prices. Opponents of fair trade laws, argue that the laws cost consumers millions of dollars a year in higher prices & a lot of over bearing regulations can give too much power to a few, potentially corrupting ruling regimes & prevent innovative ideas from flourishing. However, too much deregulation can lead to corporations being able to undermine basic social & human rights as well as environmental damage, often without accountability. These sometimes lead to further poverty in a country. Inherent power conflicts between various bodies & sometimes leads to unfairness for which the majority of the people end up paying the price. Fair trade usually concentrates on middle income states or countries rather than the very poor ones & imposes costly demands on farmers that force them to spend more money on proper certification, especially in the most disadvantaged countries. Sliding- scales price structure & certification is less costly for large producer organizations & the fact some countries are highly dependent upon the export of a limited number of primary products, the slightest variation can have a significant impact on their economies. Within the fair trade system, dependent countries are under-represented, whereas the countries with diverse exports are over-represented. Example, Ethiopia & Burundi are most dependent on coffee & were only issued 3 certificates in 2009 where as Mexico & Peru was issued 42 & 57
Globalization has broken down many of the trade barriers and has allowed companies to expand internationally over last few decades. Emerging markets such as Brazil,
Nowadays, Globalization is a main trend for the world economic. The world’s economy has become fully integrated. There are no barriers and borders to trade around the world.
In the coffee farmers’ case, when some companies perform fair trade, the prices for one pound of coffee bean have increased. According to the article: Economics of Coffee, the price for one pound of coffee bean has increased to US$1.01 since 2008. The increase in the pricing not only made the farmers earn more but also improved the reputation of the companies who have joined the fair trade project because the consumers become more aware of how the corporations concern about their employees and
Fair trade international is also jointly owned and managed by certified producers. Producers are able to influence the overall strategy, premiums, prices and standards through fair trade internationals board, its consultation processes and commitees. Stable prices: there is a fairtrade minimum price that’s set to cover the cost of production sustainability, even when prices fall in the world market drop. Empowerment of farmers and workers: farmer groups must be certified by having visible administration and democratic basis and structure. There must be representatives of workers on the committees that decide how to use the premium from fair trade. Fair trade supports both groups to develop in this area. A Fairtrade Premium: the premium helps them create a better life for themselves. It is paid in addition to the agreed upon fair trade price, and they choose democratically how to spend it. Usually they spend it on health care, education, processing facilities or farm improvments to improve
Globalization is a procedure of integration and interaction among the general population, organizations, and legislatures of various countries, a procedure driven by worldwide exchange and speculation and helped by data technology. It has consequences for nature, on culture, political frameworks, financial advancement and thriving, and on human physical prosperity in social orders far and wide. The overall is development toward financial, trade, economics and communications integration. In recent years, there is a growth for the production of companies in the industrialized countries to suppliers in developing countries.
Most of the coffee produced by Fair Trade farmers does not sell to Fair Trade buyers. Fair Trade producers sell most of their coffee on the regular market. While this indicates that the global coffee market prices are high, which is good for coffee producers, it also demonstrates a disadvantage for Fair Trade coffee producers. Due to the explicit and implicit costs added to production through Fair Trade compliance, the coffee Fair Trade producers sell in the regular market makes less profit than coffee produced with lower operating costs. When market prices are above the price floor, profit-maximizing firms would benefit to avoid the costs of Fair Trade certification and compliance. Why then do producers voluntarily opt into Fair Trade? A more likely explanation is that producers use the Fair Trade certification to reduce the risks associated with the boom-and-bust nature of coffee production, rather than to benefit from a market that will increase their productive capacity and lift them from poverty. Dragusanu et al (2014) support Fair Trade use, but Claar and Haight (2015) criticize their paper for glossing over the costs of Fair Trade, arguing that it misrepresents the significance of the costs in the production of
Globalization can not only affect a company opening an office in another country but it can affect a small local business as well. As the internet brings the world closer together it becomes far more likely that a business that opened with no intention of selling internationally will have customers form different parts of the world asking for their product. For instance a steel company located in Pennsylvania may suddenly find orders coming in from South American factories. How the steel plant chooses to handle this new international customer could mean ...
With the advent of the Internet, decreased shipping costs, and the removal of trade barriers, the world market has shrunk in such a way that everyone can be a player. While many businesses thrive solely on serving a small local area, a globalized company has the benefits of increased customer markets, gross production, and brand awareness. Take for example Coca-Cola; this multi-national corporation offers products in countries all over the world, operates in over 200 of those countries with the help of its franchisees, and is the most well-known beverage companies. It is interesting to note however, that as positive as globalization may seem, there are many negative ramifications and a large population of detractors to this movement. While increased product availability is good for profits, if a local market is inundated with imported products, locally grown or manufactured items may be squeezed out, to the detriment of the local economy. Although it is cost effective to have your product produced in another country with low wages, you are essentially taking away jobs from the people of your own country, negatively impacting your national economy. However, if you manufacture your products in a country with higher wages, you must increase your products’ prices which may be harmful to your profits. While maximizing your companies profits is always of great importance, it is essential that you weigh the pros and cons of globalization and its effects on not only your company, but the areas in which you wish to spread.
Today, many companies enter the global market, and some companies have become extremely successful in the global marketplace and others still struggling. In Theodore Levitt’s article “The Globalization of Markets”, he states that a well managed corporation focuses on selling standardized products with high quality and low priced instead of focuses on selling on customized products with high cost. Levitt defines the differences between multinational corporation and global corporation, and adopts many specific examples to proves his view. He defines the multinational corporation who operates in many countries and adjust its product based on the taste of specific region. This will result in a high cost to produce the product because company have to input more resource into each individual product. However, global corporation sells similar product worldwide at relative low cost. According to Levitt, the cultural differences are becoming more and more “homogenized”; therefore, becoming a global corporation will lead to the successful of the company in the global market.
Global segment include relevant new global markets, existing market that are changing, important international political events, and critical cultural and institutional characteristic of global market. When company entering the global, it automatically can increasing number of people believe or consumer in the multiple nation and this si...
In week five we learn about the importance of globalization and how it can help your company’s profits grow. There are many things to look at when selling globally as different cultures need to be looked at differently when making a marketing strategy. If you understand how to market your products to different cultures in different countries you can take advantage of the profits that can be made through globalization.
Globalization remains a pivotal topic in many schools of thought, and continues being a topic of controversy even in local economies today. Perhaps the reason for this is integration and competitiveness the world over. Conceivably, even more than integration, is the competitiveness of organizations, has possibly facilitating the fascination and misconception about of globalization. Nevertheless, globalization has brought about a number of effects influencing the design and geographical location of the organization. However, globalization has effectively placed the world in a bubble, or maybe one could equate the changes to being placed in an envelope.
Fair Trade is considered as an alternative trading system, which aims to protect the economically disadvantaged producers, especially in developing countries. It provides transparency and respect in international trade (Gingrich and King, 2012). Besides, Fair Trade also contributes to sustainable development by offering better trading conditions for marginalised producers and workers and securing their rights (Mohan, 2010).
Globalization’s history is extremely diversified and began during the beginning of civilization. Now we live in a world that is constantly evolving, demanding people to use resources in locations that are very difficult to obtain certain resources. This could make it completely impossible to operate in these specific parts of the world. However, globalization allows people across the world to acquire much needed resources. Globalization creates the opportunity for businesses to take advantage and exploit the ability to take part of their business to a different country. Nevertheless, globalization is part of today’s society and will be involved in virtually all situations.
Firstly, multinational corporations are not something new in this 21st century. There are more and more international corporation as people try to boost the process of globalization. The development of these multinational corporations depends on the management of the owners. Transnational strategy is needed in order to operate such a big system of companies. Every nation in this system has to be managed thoroughly in order to help running the corporation, as well as to keep the system as one consistent body of business. Managers also find it important to look for opportunitie...