The Pros And Cons Of Globalization

Globalisation refers to the changes in the way nations, regions, organisations, groups and individuals interact across national borders (Rondinelli and Behrman, 2000). It is an ongoing process that gradually eliminates national and regional preferences and ultimately turns the world into a single market place (Levitt, 1983) through international trade in goods and services, cross-border flows of capital and exchange of technology (Nunnenkamp et al, 1994)

Trade-facilitating agreements, including the North American Free Trade Agreement (NAFTA), have regionalized markets and had a significant impact on the way firms operate across the globe, putting increasing importance on firms to internationalise (Falbe & Welsh, 1998).

Research on small-business internationalization is usually based on the assumption that small and medium-sized firms suffer from disadvantages compared with their larger counterparts (Bonaccorsi, 1992). Operating in international markets demands resources, experience, skills and knowledge which small businesses often lack (Bell et al, 1992). It is evident that the combination of insufficient resources and inadequate management skills discriminates against small firms compared to larger ones in the globalizing world (Etemad, 1999).

The Internationalisation Theory by Johanson and Mattsson (1993) implies that when businesses saturate their national market, they will consider globalization drivers and barriers. Drivers may include pressures from other internationalizing SME’s to remain competitive, opportunities to increase revenue and profitability, opportunities to gain a larger consumer base and opportunities for the business to expand (Johnsen & Johnsen, 1999). Barriers may consist of the need for novel approach...

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...eting Institute, the purchase decisions of nearly two-thirds of grocery shoppers in the US are motivated by the desire to either reduce the risk of, or manage, a specific health condition (Sloan, 2000). In recent years, the most visible sign of the wellness revolution is the amount of media interest that focuses on how modern societies view health.

There are a limited number of SME’s active in the health food industry. These companies mostly produce health products for market niches or offer ‘me-too’ products following the pioneering products of the multinational companies. Generally, SME’s lack the know-how and resources for their own research and development and cannot afford to spend high amounts of money for specific information or advertising (Menrad, 2003). Knowledge is acknowledged to be one of the most important drivers of the health and wellness industry.