Category: International Business

International Business:

What is the MMIS (Multinational Marketing Information System)?

A multinational marketing information system (MMIS) is a tool that aims to reduce the chances of mistakes being made when launching marketing programs and initiatives within the multinational market. The Marketing Information System’s objective is to realize the importance and role of creating and maintaining informational basics for business decision-making. The development starts in defining the marketing information system structure and determining the databases (internal and external) and computer applications.

MMIS (Multinational Marketing Information System): Meaning, Definition, Sources, and Importance.

Multinational marketing research is the systematic and objective acquisition of data about the market in which the company wishes to penetrate. It is a support tool for decision-makers to reach a sound decision that involves the proper identification and implementation of their multinational marketing strategies and programs targeting the identified market.

Marketing research as part of the multinational marketing information system should be able to utilize for the multinational company (or even domestic companies willing to go global) to establish the most favored marketing mix for the product or service. In addition to the marketing mix, market research also aims to determine the most effective mix of product characteristics, pricing approaches, promotional methods and effective supply chains that would tailor fit the identified market.

Multinational Market Analysis:

For the process of data analysis and acquisition, the MMIS aims to gather market data by tapping into three sources namely internal records, market intelligence, and marketing research that often integrate into a single database. These data then analyze and report to senior management for effective marketing decision-making. The multinational aspect of the marketing information system creates for a more complex collection process of data acquisition and analysis as more factors consider (such as sales per country or region, political stability, cultural differences, etc.), but the fundamental aspects of the MMIS are practically the same as that of the domestic MIS.

Meaning and Definition of MMIS (Multinational Marketing Information System):

Marketing Information System is a computer-based system that works in conjunction with another functional information system to support the firm’s management in solving problems that relate to marketing the firm’s products. Multinational Marketing Information Systems Introduction Multinational Marketing Information Systems (MMIS) is one of the newest entrances in the field of marketing which beliefs to be able to provide a solution to international marketing. MMIS intends to gather disparate items of data into a coherent body of information that would use by a company’s management to analyze raw data available to them and make appropriate decisions.

Sources of the MMIS (Multinational Marketing Information System):

The three sources of data should fall into place together continuously, that is internal reporting sources covering information obtained from within the organization may use in being able to prepare and develop studies focused on marketing research. On a similar note, being able to scan the environment of the market creates for a more effective and grounded marketing intelligence that can use in junction with internal reporting processes that feed into the marketing research function.

All the data gathered from the internal reporting process, from marketing intelligence, and marketing research should be analyzed and assessed to determine market trends for a given area or region the company is focused on. In essence, the process of being able to gather the needed market data in MMIS is similar to that of creating comprehensive market research for a single country.

More information:

The main difference lies in the fact that the data that collects from the market pertains to the product or service; and, its performance in the multinational market, not to mention global and local competitors in the area or region of focus. It involves collecting data from at least one country other than the domestic country and may use data from several countries, or even global data.

The kind and amount of resources needed to effectively conduct the MMIS are likely to be greater than for single country research due to the increased geographical spread of collecting the data, as well as the complexities of analyzing and reporting on the data that acquires. Nevertheless, this kind of system is essential for multinational corporations aiming to penetrate a given market or place their product effectively to gain a sustainable competitive advantage.

The market researchers involve having to have the necessary skills and training to effectively appreciate the diverse culture that he/she has to consider, as well as the language skills appropriate for the countries being investigated. This yields a holistic information system, mainly because it not only focuses on cold market and product supply and demand trends but also takes into consideration the socio-cultural aspect of the region being analyzed.

Importance of MMIS (Multinational Marketing Information System):

MMIS is important for the company to get a competitive advantage in this global market. It brings flexibility in responding to competitors in different countries and Markets. It gives the ability to respond in one country or a region of a country- to a change in another.

They give the ability to keep abreast of market needs around the world. It gives the ability to transfer knowledge between units in different countries. It reduces the overall cost of operation.

Increased efficiency and effectiveness in meeting customer needs. It gives the ability to achieve and maintain diversity in the firm’s products; and, in how they are producing and distribute. It reduces the time of communication

Problems in Implementing MMIS:

The company can face the number of problems to implement MMIS. The most common problem gives below:

Politically Imposed Constraints. Restriction on Hardware purchase and Imports, Restrictions on Data processing. Restriction on Data Communication (Transborder Data Flow TDF). Technological Problems, Lack of Support from Subsidiary Manager.

What is the MMIS (Multinational Marketing Information System)? People’s Image from Pixabay.

Explanation of MMIS (Multinational Marketing Information System):

In general, marketing research is the process wherein vital information about the market gathers through data acquisition and analysis to help the senior management reduce the risk associated with decision-making through the means of an effective information dissemination system. Because of this, the marketing research tool plays a vital role in the overall process of management information systems. With the expansion of countries into the global market; multinational marketing research has taken flight and has ushered in a new field of research.

Multinational marketing research according to several sources on this field is systematic; and, objective acquisition of data about the market in which the company wishes to penetrate. It is a support tool for decision-makers to reach a sound decision that involves; the proper identification and implementation of their multinational marketing strategies and programs targeting the identified market. Marketing research as part of the multinational marketing information system should be able to utilize for the multinational company (or even domestic companies willing to go global) to establish the most favored marketing mix for the product or service.

More explanation:

In addition to the marketing mix, market research also aims to determine the most effective mix of product characteristics, pricing approaches, promotional methods and effective supply chains that would tailor fit the identified market. Every multinational company has some sort of mechanism to acquire a particular kind of data from a given target market and develop these acquired data into relevant information to provide senior management with the necessary information for them to effectively decide on matters concerning proper marketing plans; and, activities geared towards sustainable competitive advantage within the market.

This is where MMIS goes into action. The MMIS concentrates on the provision of the data related to the market being targeted by the company. These marketing data contribute to the overall management information system for the company as a means of effectively placing their marketing plans. In terms of breaking down the system, a marketing information system describes as the integration of several resources such as human, equipment, technology; and, data gathering methodologies as a mean of gathering, sorting, analyzing, evaluating, and distributing information to decision-makers in a manner that addresses necessity, practicality, timeliness, and accuracy.

The necessary data that needs to fuel the MMIS acquire from a balance between formal; and, informal communication mediums that utilizes also a combination of internal and external sources within the company. Formal internal sources of data that might prove relevant would be reports from the sales department, monitoring and trending report from sales groups. On the other hand, informal sources of information are information acquire from gatherings with co-workers and associates.

January 31, 2020
Meaning and Nature of Business Negotiation
Introduction to Business Negotiation: Negotiation is a basic human activity. It is a process we undertake in everyday activities to manage our relationships, such as between a husband and wife, children and parents, employers and employees, buyers and sellers and business associates. Nature of international business negotiation; International executives attempt to negotiate for an optimal solution: minimizing conflicts and maximizing gains. Martin et al. (1999) found that a clear negotiation strategy was the most important factor for successful international business relationships.

What do you know about Business Negotiation? Meaning and Nature of International business negotiation.

In some of these negotiations, the stakes are not that high and we do not have to pre-plan the process and the outcome, but in some cases, such as business relationships, the stakes are high and we have to prepare, plan and negotiate more carefully. This volume deals, in particular with the latter type of negotiation. In business relationships, parties negotiate because they think they can inﬂuence the process in such a way that they can get a better deal than simply accepting or rejecting what the other party is offering.

Meaning and Nature of Business Negotiation:

Business negotiation is a voluntary process and parties can, at any time, quit the process. Negotiation is, thus, a voluntary process of giving and take where both parties modify their offers and expectations to come closer to each other. In literature, sometimes “bargaining” and “negotiation” are used interchangeably. But in our opinion, they mean different things. Bargaining is more like haggling in a typical “bazaar” setting, or so-called competitive bargaining or distributive bargaining.

Here, the objective of the parties is to maximize their beneﬁt, quite often at the expense of the other party. It refers to a typical win-lose negotiation, where the resources are limited or ﬁxed, and everybody wants to maximize his share of the resources. Parties are therefore more competitive and opportunistic. They normally do not like to share information with the other party unless they have to, and they want to get the maximum information on and from the other party. Although this view on negotiation is out-dated, it is still practiced and studied in some situations such as labor-management negotiations (Walton & McKersie 1965). On the other hand negotiation, also called “integrative bargaining”, refers to win-win negotiation where both or all parties involved can end up with equally beneﬁcial or attractive outcomes.

More information:

Negotiation is a process in which at least one individual tries to persuade another individual to change his or her ideas or behavior. Business negotiations often involve one party attempting to influence another to make a particular decision to sign a contract. Thus negotiating is a process in which at-least parties with different viewpoints and needs try to reach an agreement on matters of mutual interest.

In other words, everyone can win. It is more related to a problem-solving approach, where both parties involved perceive the process of negotiation as a process to ﬁnd a solution to a common problem. In integrative bargaining, however, if negotiations are not properly handled, both parties can end up with a jointly inferior deal. With negotiation, both parties can achieve their objectives and one party’s gain is not dependent upon the other party’s concession. Business negotiation is considered by many authors as being this type of negotiation (Fisher & Ury 1991; Pruitt 1983; Ghauri 1983 1986; Lewicki et al. 1991).

Type of Negotiation:

Some characteristics of this type of negotiation are:
- Open information ﬂow between the parties. In this case, both sides sincerely disclose their objectives and listen to the other party’s objectives to ﬁnd a match between the two.
- A search for a solution that meets the objectives of both parties.
- Parties understand that they do have common as well as conﬂicting objectives and that they have to ﬁnd a way to achieve, as much as possible, common and complementary objectives that are acceptable to both sides.
- To achieve the above, both parties sincerely and truly try to understand each other’s point of view.
The above characteristics are, in fact, opposite to distributive bargaining. That means that the process of negotiation in a problem-solving situation is completely different from a process of distributive bargaining. In the problem-solving negotiation, parties have to look for a solution that is beneﬁcial and acceptable to both sides: a win-win solution. They look for a jointly optimal outcome, which cannot achieve unless the parties have this problem-solving approach.

International business view:

In international business settings, the development of the negotiation process and how parties perceive the relationship are crucial. This process inﬂuences by some facts and factors beyond the negotiation process in question. In international business negotiations, cultural differences are inevitable between negotiators from different countries. Cultural values can influence international business negotiations in significant and unexpected ways from the first to the last stage of a negotiation.

The diversity of values of partners results in different approaches used in the negotiation process and variable expected outcomes. Successful international business negotiation not guarantees by following practical negotiation tips, above nature also helpful. It would be more useful for negotiators if the most critical success factors of international business negotiations in a particular culture could identify in advance.

Deeply understand:

The cultural differences that exist on several levels form one of the most important factors; on a national level, cultural differences at the level of different countries; on an organizational level, different type of organizations, depending upon their home country and industry, have different cultures; and on an individual level, individuals involved in the process of negotiation have different cultural backgrounds not only due to different countries and organizations but also due to their professional backgrounds, such as engineers vs. marketing people.

Meaning and Nature of Business Negotiation, Agreement brainstorming business #Pixabay.

Cultural differences create a challenge to the negotiators involved and demand understanding as well as ﬂexibility. An ability to assess these differences and properly handle the consequences is essential for success in international business negotiations. This process is also dynamic and can move in a positive as well as a negative direction at any time; for example, after or during each session. This dynamism characterizes as an “atmosphere” in our world. The atmosphere not only explains the perceptions of the parties but also the progress of the process. The more the parties understand and adapt to each other; the more positive the atmosphere around the process, and the more parties are willing to compromise and see common beneﬁts.
October 19, 2019
What is the role of Cultural Sensitivity in International Trade?
Explanation and Learn, What is the role of Cultural Sensitivity in International Trade?

Learn What? Culture plays an important role in the life of people as it is closely associated with them. It is very necessary to understand what a culture requires and what emotions are attached to it. Different countries follow different culture and because of this, some things will be acceptable in some countries whereas the same things will appear to be rude in other countries because of cultural difference. Also Learned, What is the role of Cultural Sensitivity in International Trade?

What is cultural sensitivity?

Meaning: Cultural sensitivity is conscious that cultural differences are present among the people as well as cultural differences, and these differences and similarities can affect attitude, behavior and communication styles. Cultural sensitivity is often used as a synonym for cultural awareness, which refers to the ability to keep itself in someone else’s shoes. Being culturally sensitive should be able to understand why someone else thinks or feels different things from you.

What It Matters for Trade?

Business owners and managers have generally defined ways to do things – patterns of habits, customs and behavior patterns. In many ways it makes sense. Policies and procedures keep the business running in the right order. However, it is also common to face people from different cultural, religious and social backgrounds in the business world. These people can have different ways of doing business and communicating their thoughts. What can be normal or acceptable for a businessman to be unfavorable or unusual for someone else? When communicating with individuals from a different background, being culturally sensitive, you can become aware of their customs and beliefs and respect them.

People who are culturally sensitive will know that the difference between the culture of different people can create differences in their relationship with respect to the way they behave, communicate etc. Hofstede defined culture as “the manner in which the mind is programmed such that it can differentiate the people of one category with those of other.” a culturally sensitive person should try to adopt the culture of another country, their traditions, their way of living, their lifestyle etc.

Nowadays people are getting closer to each other so toleration, dialogue between people of different culture and respect towards their culture and respect for diversity becomes more important. Learning and trying to understand the customs and culture of the foreign country indicates respect for the other country and for any business relationship to be successful respect for each other is very essential.

Many employers feel and have sensed that cross-cultural sensitivity is an important skill and proper care should be taken when dealing in and trading with the international market. In the domestic market, people will know what to do and how to do but to achieve the same motive in the different country with the same concept and then getting success by using same interpersonal professional skills is more important. Proper training should be provided should to the staff about the nature of the place, its scope, and language, values and aesthetics.

When people are traveling from one country to another it is necessary that they do a research about the culture of the country in which they are traveling so that they can go well prepared, which can save them and people around them from an embarrassing situation. Doing business internationally means management of culture of different countries and for maintaining international business relations, people will have to deal with that countries norms, rules, values, and regulations. Overall people need to involve in the culture of different people and try to adapt to their cultural skills and style.

The right type of knowledge for right kind of job is very essential for doing business globally. The ability to negotiate better, understanding the cultural problems and becoming an insider often give a competitive edge in the business. Managers should possess the high level of managerial skills as the relationship between various business networks depends upon the manner in which the manager interact and behave with international clients and how much capacity they are in dealing with crossing cultural boundaries. Cross-cultural training helps in improving success by trying to improve the level of personal cultural awareness and this will help in understanding the culture of other people.

In growing business environment it becomes very essential for the firm to have culturally skilled workers having the ability to work in the international business arena. In the cross-cultural business, sector trust plays a very important role in maintaining a business relationship. Trust can conceptualize as a belief which is influenced by the way the partners behave and how much reliable they are.

The companies should provide training to their staff for each and every situation that they are likely to face as it can also help to develop various strategies that are required for improvement of self-development process. It will enable them to see the world with a different concept through the eyes of their foreign partners. This will help them to learn how to tackle different problems faced by their foreign partners.

In a global economy, culture plays a vital role to make any business transactions successful economically. The firm should be able to cope up with the international differences that arise from different culture and for that, the international culture has to be understood by the managers. The partners must be able to understand each other’s culture and for this, a lot of time and effort is required. By trying to understand the partner’s cultural needs and their culture they will try to solve the cultural differences and in this way, they are likely to behave in a more systematic and sensitive towards the culture. Globally, if cultures are not well understood then the chance of the firm surviving internationally is very low.

The neglected role of Cultural Sensitivity in International Trade:

In this globalized economy, business is growing very fast and the companies are starting to expand in international markets – advanced technology, strong capital hold, cost-benefit, political influence are some of the factors that help in the growth of the business. Increasing competition causes most of the companies to collaborate with the foreign partner. Most of the companies fail in understanding the importance of cross culture resulting in the failure of cross-border partnerships and collaboration.

Most of the companies that plan to expand globally face two problems, first one is to identify the qualities and the attributes of a successful global manager and the second one are finding executives with those attributes. Thus executives who are given foreign responsibilities are usually selected on the basis of them having proper knowledge of their language and should have knowledge of international experience. Culture basically shows the kind of the behavior that is accepted by the society.

Given below are some examples that show negligence of cultural sensitivity in international trade:
- In Spain, coca cola had to withdraw its 2 liters of bottles as Spaniards did not have refrigerators having such large compartments for their storage.
- Coca-cola, when was launched in China the name, sounded like “Cooke-Koula” which means a thirsty mouth which is full of wax naturally this was not accepted by the people and they decided to ban the product.
- When coloring in 800*800 pixels on an India map, to show disputed Kashmir territory Microsoft colored it in eight different shades and this led to fury in India and they banned the map. The difference in green means that Kashmir is shown as Non-Indian.
- Pepsodent wanted to sell its toothpaste in south-east Asia by advertising that it “whitens your teeth “but they found out the local there use betel nuts to blacken their teeth.
- Gerber, a U.S. firm wanting to sell baby food in Africa, displayed a baby on the packet but soon they realize that the product had flopped as in Africa what the content is in the packet that is displayed on the product.
- At African port of stevedores saw the internationally recognized symbol of fragile which means broken wine glass and the staff working there assumed that the box contains broken glass and they threw it inside the sea.
- McDonald’s spent the huge amount of money on making advertisement showing Chinese customer kneeling before a McDonald’s staff asking him to accept the expired discount coupon. The ad was called off due to lack of cultural sensitivity on behalf of McDonald’s in China begging is considered to be an embarrassing and shameful act.
- Green is the favorite color for many Muslim countries but the same color is considered as a symbol for illness in Malaysia. White is associated with death, sadness and mourn in India, China etc but the same color is brides wedding dress in English country.
- According to Hindu culture cow is considered as divine and sacred and the Hindus see the cow as a gift given by God. When McDonald’s entered in India in 1990 it created a big problem as they use beef and the small amount of beef extract in the oil. The Hindus considered this an offense and they protested by refraining from going to McDonald’s and asking them to stop the use of beef in their food products.
The company should basically know what is the culture of the country in which they want the deal as this will help in setting a company in that country more easily and successfully. For an international business to be successful the company should make all efforts to try to understand the culture and create awareness about their culture and in this way try to solve the cultural differences mutually. From the above examples we can see that many companies have faced failure by not trying to understand the culture of other country but trying to learn from their failure as to where they went wrong is more important.

Thus understanding the culture of different countries help to develop and establish the business in that country. By creating general awareness and taking extra efforts to know about the culture and to take the keen interest in learning it will help in solving the cultural differences between the partners. Patience, courtesy and a little bit of curiosity will help in proper communication with each other. Due to lack of cross-cultural sensitivity, there are chances of the business failing to a great extent because what may seem to be right in one country may seem to be not acceptable in another country. So proper research has to be done when a company is planning to start a business in the new country.

Image Credit to #pixabay, Thanks.
July 2, 2018
What do you understand about International Advertising?
International Advertising essay, generally speaking, is the promotion of goods, services, companies, and ideas, usually in more than one country performed by an identified sponsor. Marketers see advertising as part of an overall promotional strategy. Other components of the promotional mix include publicity, public relations, personal selling, and sales promotion. Advertising is a cogent communication attempt to change or reinforce ones’ prior attitude that is predictive of future behavior. Also learn, What is Major, Key, Dimensions of Organizational Culture? Business Promotion of International Advertising!

Learn, Understand about International Advertising, Meaning, and Definition.

It can view as a communication process that takes place in multiple cultures that differ in terms of values, communication styles, and consumption patterns. It is also a business activity involving advertisers and advertising agencies that create ads and buy media in different countries. The sum total of these activities constitutes a worldwide industry that is growing in importance. International advertising is also a major force that both reflects social values and propagates certain values worldwide.

Global advertising or international advertising consists of collecting, processing, analyzing, and interpreting information.

There are two main purposes of international advertising research:
- To assist business executives to make profitable international advertising decisions for their specific products and services, and.
- To contribute to the general knowledge of international advertising that is potentially useful to a variety of business executives, educators, government policymakers, advertising self-regulatory organizations, and others interested in understanding the process and effects of international advertising.
More Information!

International advertising involves recognizing that people all over the world have different needs. Companies like Gillette, Coca-Cola, BIC, and Cadbury Schweppes have brands that are recognizing across the globe. While many of the products that these businesses sell are targeted at a global audience using a consistent marketing mix, it is also necessary to understand the regional differences, hence it is important to understand the importance of international marketing.

Organizations must accept that differences in values, customs, languages, and currencies will mean that some products will only suit certain countries and that as well as there being global markets e.g. for BIC and Gillette razors, and for Coca-Cola drinks. There are important regional differences for example advertising in China and India needs to focus on local languages. Just as the marketing environment has to assess at home, the overseas potential of markets has to carefully scrutinize. Finding relevant information takes longer because of the unfamiliarity of some locations. The potential market size, degree, and type of competition, price, promotional differences, product differences as well as barriers to trade have to analyze in order to advertise our product effectively in different countries.

Why Do This?

Advertising is a paid message used to promote a product, service, or idea to a specific audience. International advertising refers to advertising which is carried out in multiple countries around the world. Effective advertising requires specialized cultural knowledge that considers differences between target audiences in different countries. International advertising is considering not only a communication process but a business activity, an industry, and a reflection of society as a whole.

The primary goal of advertising is to effectively communicate with the target audience. The communication process involves multiple aspects that are affecting by media, culture, literacy, and language. For example, a multinational company that wishes to place newspaper ads will find that. Their ads will most likely be unsuccessful in countries that have significantly low literacy rates. Additionally, cultural norms and values differ among countries. For example, a television commercial for birth control does not cause concern in many Western countries. While the same ad televised in a conservative Muslim country, such as Saudi Arabia, maybe very controversial.

How, Where, and Which types?

International advertising can also consider a business practice by which an advertising firm attempts to influence audiences in other countries about itself, and its products and services. Advertising agencies decide whether to create global or regional campaigns that are capable of building a global image of a product or service. Agencies create advertisements and place them in the appropriate media outlets throughout the world.

The worldwide industry of international advertising consists of a large network of advertising agencies. The network is made up of small and medium-sized agencies located within one country and large agencies. That have multiple offices in multiple countries throughout the world. This industry network is responsible for communication via the business activity of advertising.

Finally, international advertising reflects multiple facets of society, including values, morals, lifestyles, and gender roles. The image of a product or service created by advertising plays a part in promoting specific facets of society. Criticism of global campaigns claims that these images are promoting Western cultures and values. International advertising may act as a force that promotes these cultures and values with many products becoming objects of desire for others in the world. Additionally, communication through a regional or global campaign can also promote integration and diversity by establishing common bonds and creating universal symbols. That is able to connect people from different areas of the world.

Reference
1. Explaining – //www.mbaknol.com/international-business/international-advertising/
2. Meaning – //en.wikipedia.org/wiki/International_advertising
3. Photo Credit URL – //www.trustedclothes.com/blog/wp-content/uploads/2016/06/night-square.jpg
February 24, 2018
The Advantages and Disadvantages of Glocalization in International Business!

What is the Advantages and Disadvantages of Glocalization in International Business?

Globalization pulls the countries out, from their detachment into the competitive world. A journey towards new collaborations and unity, it has changed the world into a global village. Both distance and isolation have been terrifically reduced. You have to Learn, the Advantages and Disadvantages of Glocalization in International Business, but learn first, What is Glocalization?

Globalization integrates trade, technology, investments, and the mobile factors of production like labor and capital. All types of goods ranging from Coca-Cola, Sprite, Louis Philippe shirts, Marie Claire bags, Police sunglasses, to Adidas and Nike shoes are all available in every market globally, all credit to globalization.

Globalization has been quite a debatable subject. While some are of the opinion that it has a lot of ill-effects upon the society, there exist others who feel exactly the opposite. Some opine that it has made life extremely easier and comfortable. It has however affected the consumers and businesses differently. For a better picture, let us take a look at some of the advantages and disadvantages of globalization.

Advantages of Globalization

Employment

Considered as one of the most crucial advantages, globalization has led to the generation of numerous employment opportunities. Companies are moving towards the developing countries to acquire labor force. This obviously caters to employment and income generation to the people in the host country. Also, the migration of people, which has become easier has led to better jobs opportunities.

Education

A very critical advantage that has aided the population is the spread of education. With numerous educational institutions around the globe, one can move out from the home country for better opportunities elsewhere. Thus, integrating with different cultures, meeting and learning from various people through the medium of education is all due to globalization. Developing countries or labor-intensive countries have benefited the most.

Product Quality

The onset of international trade has given rise to intense competition in the markets. No longer does one find the limited number of commodities available. A particular commodity may fetch hundreds of options with different prices. The product quality has been enhanced so as to retain the customers. Today the customers may compromise with the price range but not with the quality of the product. Low or poor quality can adversely affect consumer satisfaction.

Cheaper Prices

Globalization has brought in fierce competition in the markets. Since there are varied products to select from, the producer can sustain only when the product is competitively priced. There is every possibility that a customer may switch over to another producer if the product is priced exorbitantly. ‘Customer is the King’, and hence can dictate the terms to a very large extent. Therefore, affordable pricing has benefited the consumer in a great way.

Free Movement of Capital

Capital, the backbone of every economy, is of prime importance for the proper functioning of the economy. Today, transferring money through banks is possible just by the click of a button, all due to the electronic transfer that has made life very comfortable. Many huge firms are investing in the developing countries by setting up industrial units outside their home country. This leads to Foreign Direct Investment, which helps in promoting economic growth in the host country.

Communication

Information technology has played a vital role in bringing the countries closer in terms of communication. Every single information is easily accessible from almost every corner of the world. Circulation of information is no longer a tedious task and can happen in seconds. The Internet has significantly affected the global economy, thereby providing direct access to information and products.

Transportation

Considered as the wheel of every business organization, connectivity to various parts of the world is no more a serious problem. Today with various modes of transportation available, one can conveniently deliver the products to a customer located in any part of the world. Besides, other infrastructural facilities like, distribution, supply chain, and logistics have become extremely efficient and fast.

International Trade

Purchase and sale of commodities are not the only two transactions involved in international trade. Today, international trade has broadened its horizon with the help of business process outsourcing. Sometimes in order to concentrate on a particular segment of the business, it is a practice to outsource certain services. Some countries practice free trade with minimal restrictions on EXIM (export-import) policies. This has proved beneficial to businesses.

GDP Increase

Gross Domestic Product, commonly known as GDP, is the money value of the final goods and services produced within the domestic territory of the country during an accounting year. As the market has widened, the scope and demand for a product have increased. Producers familiarize their products and services according to the requirements of various economies thereby tapping the untapped markets. Thus, the final outcome in terms of financial gain enhances the GDP of the country. If statistics are any indication, the GDP of the developing countries has increased twice as much as before.

Disadvantages of Globalization

Health Issues

Globalization has given rise to more health risks and presents new threats and challenges for epidemics. A very customary example is the dawn of HIV/AIDS. Having its origin in the wilderness of Africa, the virus has spread like wildfire throughout the globe in no time. Food items are also transported to various countries, and this is a matter of concern, especially in case of perishable items. The safety regulations and the standards of food preparation are different in different countries, which may pose a great risk to potential health hazards.

Loss of Culture

Conventionally, people of a particular country follow its culture and traditions from time immemorial. With a large number of people moving into and out of a country, the culture takes a backseat. People may adapt to the culture of the resident country. They tend to follow the foreign culture more, forgetting their own roots. This can give rise to cultural conflicts.

Uneven Wealth Distribution

It is said that the rich are getting richer while the poor are getting poorer. In the real sense, globalization has not been able to reduce poverty. Instead, it has led to the accumulation of wealth and power in the hands of a few developed economies. Therefore the gap between the elite and the underprivileged seems to be a never-ending road, eventually leading to inequality.

Environment Degradation

The industrial revolution has changed the outlook of the economy. Industries are using natural resources by means of mining, drilling, etc. which puts a burden on the environment. Natural resources are depleting and are on the verge of becoming extinct. Deforestation is practiced owing to the non-availability of land, thereby drastically reducing the forest cover. This, in turn, creates an imbalance in the environment leading to climate change and occurrence of natural calamities.

Disparity

Though globalization has opened new avenues like wider markets and employment, there still exists a disparity in the development of the economies. Structural unemployment owes to the disparity created. Developed countries are moving their factories to foreign countries where labor is cheaply available. The host country generates fewer revenues, and a major share of the profits fall into the hands of the foreign company. They make humongous profits thereby creating a huge income gap between the developed and the developing countries.

Cut-throat Competition

Opening the doors of international trade has given birth to intense competition. This has affected the local markets dramatically. In recent times the standard of living has improved. People are therefore ready to shell out extra money for a product that may be available at a lower price. This is because of the modern marketing techniques like advertising and branding. The local players thereby suffer huge losses as they lack the potential to advertise or export their products on a large scale. Therefore the domestic markets shrink.

Conflicts

Every economy wants to be at the top spot and be the leader. The fast-paced economies, that is the developed countries are vying to be the supreme power. It has given rise to terrorism and other forms of violence. Such acts not only cause loss of human life but also huge economic losses.

Monopoly

Monopoly is a situation wherein only one seller has a say in a particular product or products. It is possible that when a product is a leader in its field, the company may begin to exploit the consumers. As there exist no close competitors, the leader takes full advantage of the sale of its product, which may later lead to illegal and unethical practices being followed. Monopoly is disastrous as it widens the gap between the developed and developing countries.

In the current scenario, the key to international success is global marketing. Global marketing is the competency of an economy to market its product in almost every country. It is of utmost importance if the product has to make a mark and sustain globally. A car manufacturer in one country will manufacture its product in a different way than a car manufacturer in another country. But if both the manufacturers want to sell their car in a third country then it must have a global appeal. Global marketing has made known to the customer the existence and benefits of a product in the market giving the product an identity. At the same time, it has failed to keep in mind the wants and needs of every consumer, which are unlimited and several.

Simply Advantages and Disadvantages of Glocalization

First of all, glocalization makes sense when a firm faces high pressure for local responsiveness and where there are significant opportunities for leveraging valuable skills within a multinational’s global network of operations. Through glocalization, international products are adapted to the local taste of the population and thereby local communities are introduced to different aspects of foreign cultures. This helps multinational companies to grow and gain the trust of the people of particular regions.

So, glocalization helps in connecting with the consumers of that region on an emotional level and also leverage its global position. This is the most important aspect that leads to the success of the company. Another positive aspect of glocalization is that multinational companies bring in foreign revenue and offer employment opportunities for locals. Disadvantages of this strategy can be that companies are unable to realize location economies or failure to transfer core competencies to foreign markets. Another disadvantage is that it is really difficult to implement a glocal strategy due to organizational problems. This means that glocalization doesn’t always benefit multinational companies because individuals and groups in each region or country can choose to accept or reject the products offerings or the company’s presence.

Reference

1. Advantages and Disadvantages of Glocalization – //www.buzzle.com/articles/advantages-and-disadvantages-of-globalization.html
2. Simply Advantages and Disadvantages of Glocalization – //www.mbaknol.com/international-business/glocalization-definition-advantages-and-disadvantages/
3. Photo Credit URL – //images.fastcompany.net/image/upload/w_1280,f_auto,q_auto,fl_lossy/fc/3014641-poster-p-4-reasons-handshakes-go-horribly-wrong.jpg

January 30, 2018
What is Glocalization? Meaning, Definition!

Glocalization (a portmanteau of globalization and localization) is the adaptation of international products around the particularities of a local culture in which they are the sale.

Understanding, What is Glocalization? by Meaning, Definition!

The process allows the integration of local markets into world markets. “Products or services design to benefit a local market. While at the same time being developed and distributed on a global level. Glocalization is a mixture of and the result of combining the words globalization and localization.” Learn, The Difference between Revaluation and Realization Account.

Meaning of Glocalization!

Globalization is one of the most important phenomena of the recent past and the future. The term “Globalization” describes an ongoing process by which regional economies, societies, and cultures are becoming more integrated. Through a dramatic increase in the global network of technological, economic, political, and cultural exchanges. In specifically economic contexts, the term refers to the integration of national economies into the international economy through trade. Particularly trade liberalization or free trade, foreign direct investment, capital flows, migration, and the spread of technology.

This worldwide phenomenon of interaction among the countries is driven largely by advances in communication, transportation, and legal infrastructure. As well as the political choice of countries to open cross-border links in international trade and finance. Due to many difficulties that a globalization strategy faces another term has been full-blown in recent years calls “Glocalization”. In contrast to globalization, the glocalization strategy, which means thinking globally but acting locally, is a more modern and different approach.

The term “Glocalization”, had become a buzzword in the business world in 2000. Describes a historical process whereby the local is integrated into the global. This means that localities develop economic and also cultural relationships with the global system through information technologies. Bypassing and subverting traditional power hierarchies like national governments and markets including. Cultures clash with newly introduce cultural concepts, ideologies, and practices. So put simply, globalization is a move toward centralization, while glocalization is a move toward decentralization.

Definition of Glocalization!

Glocalization is a combination of the words “globalization” and “localization” and emphasizes the idea that a product or service is full-blown and distributed globally is more likely to succeed. If it is adapted to the specific requirements of local practices, legislation, fiscal regime, socio-political system, cultural expectations, local laws, customs, and consumer preferences. Why do Small Businesses need Corporate Retreats Good for Productivity?

Today it is possible to understand by glocalization the intelligent adoption of concepts and ideas to the local and regional needs. Instead of having the same products and solutions everywhere. The concept of global localization explains the interactions between global and local dimensions in any strategy like political governance strategies. Business marketing strategies, media and communication strategies, and so on. Globalization also explains the failure of some strong strategies, as they don’t consider the effect of cultural diversity and the strength of local dimensions. It stands more considered as the creation or distribution of products or services intended for a global or trans-regional market but customized to suit local laws or culture.

Reference

1. What is it? – //en.wikipedia.org/wiki/Glocalization, //www.businessdictionary.com/definition/glocalization.html
2. Meaning and Definition – //www.mbaknol.com/international-business/glocalization-definition-advantages-and-disadvantages/
3. Photo Credit URL – //www.theoldmillpitlochry.co.uk/images/offer2.jpg

January 30, 2018