Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by technology innovation. An excellent example of globalization is the growth of coffee around the world originating from Ethiopia and dispersing to other nations around the world like Indonesia and Columbia.
Grown in three continents (Africa, Asia, and the Americas), coffee is closely linked to the economic development of many nations. In Ethiopia and Uganda, it is the primary source of income for the country.
International laws regulate the industry and aim to prevent price dips and spikes. Farmers around the world are part of cooperatives supported by international NGOs, to obtain better prices for their crops, as well as to deliver social services for their communities. This has helped many of these poor countries and their citizens develop economically and raise their standard of living.
Another key benefit is that FDI interests into these countries raises government standards reducing corruption and making their economies more stable and effective.
Not all of the impacts are positive though, environmental degradation and greedy commodity traders can certainly hurt the industry and its supply chain.
Also, opponents of globalization claim that the creation of an unfettered international f...
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...in their espresso machines. This becomes a competitive differentiator as they expand rapidly into Asia and Americas allowing their baristas to create high quality products and encourage the home consumer to acquire the same technology.
Technology also has a critical bearing on the de-commoditization of luxury goods. Globalization has a tendency to commoditize all of its complements and technology innovation is a natural anti-dote to this effect. It does this by becoming a barrier to entry for other low cost firms and increasing the level of industry rivalry. With the complex value chain of coffee, this characteristic is disruptive enough to generate a sustainable competitive differentiator for Illycaffè. There is no surprise that their investment in the University of Coffee and the Trieste Science Prize has helped them triple sales turnover in the last 10 years.
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