Discuss about the impact of globalization in the startup business venture.
Globalization refers to the increasing exchange of information, people, ideas, businesses and currency from one part of the world to another. Globalization is a current phenomenon which has largely changed the shape of the world and continues to positively and adversely impact people, businesses and economies (Hirst, Thompson & Bromley, 2015). It has made the world a truly flat place and ensured that there are no boundaries across different parts of the world. In the current scenario of globalization, it is not uncommon for someone in Australia wearing clothes or shoes that have been imported from different part of Europe. The world horizon has opened up due to globalization (Beck, 2015). This has also led to increased trade, establishment of multinational companies and development of economies across the world.
The widespread use of social networking websites and various digital marketing and international marketing strategies in this globalized world have had a largely positive impact on businesses around the world (Kaur, 2016). Business are now able to recruit people from different parts of the world. They can use technology that is developed in a country miles away and the information as well as ideas are freely flowing through different land and seascapes. No doubt that there are certain disadvantages to the phenomenon. It is often argued that globalization leads to the rich economy becoming richer and the poor economy becoming poorer. Clearly, the flow of ideas, information, technology, businesses and currency has not been entirely fair to all. But in the hindsight, the globalization has proved to be a boon for all involved especially for developing economies.
This report throws light on the impact of globalization in the startup business venture which was developed in the first part of the assignment. The idea laid emphasis on a new business model where a mobile application development firm was created which will be used by businesses to buy and sell things. The business specialized in creating mobile applications for various businesses with an aim to digitize the Australian economy. The mobile applications developed by the business are available on all mobile platforms. Now this report has explained the benefits experienced by businesses due to globalization as well as problems faced owing to the same.
Globalization has various positive impacts which have led to the development and growth of businesses and economies. The major advantages that would help our mobile application development business where people can buy and sell things are as below.
The major advantage of the business would be the ability to acquire talent from different parts of the world. The concept of virtual offices and hiring people from different countries is not unknown. The talent available outside of Australia is immense as well as often less expensive (Kang & Shen, 2017). Human resources form a crucial part of any business. Hence our firm can aim at recruiting freelancers or part time remote employees from different countries. This will help the business gain a fresher talent, encourage a free flow of information and new ideas and infuse cross cultural learning within the firm. This is only possible due to globalization and increasing accessibility of people around the globe.
Just like it becomes easy for the firm to acquire employees from different countries, it becomes easy to also acquire investment from angel investors located in different part of the world. Various startups in India are funded by American investors and various startups in Australia are utilizing Chinese resources to establish and grow their business (Hong & Pavlou, 2014). This is only possible due to the increasing advent of globalization.
Once the importance of globalization was realized, various universities and private organizations from different parts of the world started exchange programs which enabled people to travel miles away from their home country and do internships in organizations abroad. This was done with an aim to facilitate exchange of information, talent and culture through the globe. Participating in such exchange programs would also help the business in learning new things and help us enhance our cultural strength (Thomas & Peterson, 2017).
Another benefit of globalization would be a free flow of information around the world. Thanks to social media and digital marketing strategies, the world has become truly boundary less (Siemens, 2014). It will be easier for our business to acquire new, developed, recent and inexpensive technology from different countries. This consistent flow of technology will help us remain updated with the recurring changes in the technological world. Our business of mobile applications development will require technology and acquiring new and improved technology from different countries will help the business gain a competitive advantage over its consumers.
Due to globalization, every business is available to the world. The number of exports and imports have largely increased and this international trade forms the backbone of various economies. With the advent and advancement of social media, it is now even possible to market our business to people based in different countries of the world (Hollensen, 2015). This largely increases our target market and makes us accessible to various geographies. We will build a Facebook page and indulge in effective marketing through Instagram and Pinterest with an aim to attract international customers.
A crucial aspect of the business is the exchange of funds. This includes payments done to vendors and other stakeholders as well as payments received from customers. Globalization has allowed a safer means to transfer money from one person to another at a single click. This has led to a larger ease of the business. This enhances the extent of trust between people and makes it easier for them to conduct business despite their geographical distance.
As mentioned before, every coin has two sides. Similarly, globalization has certain disadvantages as well. Once the business commences and successfully takes advantage of a globalized world, it is only natural to face certain challenges for the same reason. A few challenges face by the mobile application development business due to globalization are as below:
A globalized world has opened various opportunities for businesses to establish and flourish while catering to a varied market segment placed across the globe (Stiglitz, 2017). This however, increases competition in every industry. It becomes necessary for businesses to continue to foster innovation and creativity in their business to gain a competitive edge. This extreme level of competition has made every industry a red ocean one. Just like it is easy for our business to target consumers from across the world, similar businesses from different parts of the world become our competitors. Because the consumer now has a large number of options to select from and he is no longer bound by geographic locations in order to conduct business.
The major problem in conducting business with clients, investors and other stakeholders which are located in different countries is the risk of fluctuating currency. The currency markets have shown a wide movement over the recent years (Bucher & Ranaldo, 2016). The Australian dollar has shown significant movement against most G7 currencies like US dollar, Canadian dollar, Great Britain pound (GBP), Japanese Yen (JPY) and even Chinese Yuan. This makes it difficult for us to analyze the exact profit or loss that can be anticipated from international sales or investments in the future years. Therefore, it is in our best interest to hedge our foreign currency trades in an efficient manner.
Conclusion
Globalization has caused a massive change and development in the world in the years to come. It has enabled the exchange of information, ideas, technology, culture and businesses from across different countries of the world. Our business of mobile application development used to buy and sell things would also be largely impacted by the effects of globalization.
On the positive note, globalization would enable us to get fresh talent from different parts of the world. We would even be able to get funding from different investors who are like minded even if they are geographically far away (Hay & Marsh, 2016). The advent of globalization will also enable us to reach out to a wider audience and target a larger customer segment spread across different countries in the world. International payments are safely made and flow of information technology is highly prevalent. This will lead to better business, increased sales and an improved organizational culture.
On the other hand, globalization has led to ever increasing competition and major currency risk that follows in every international business transaction. However, it has been noticed that the phenomenon has helped the economy and business industry boom which has led to an overall improvement and growth of the world.
References
Beck, U., 2015. What is globalization? John Wiley & Sons.
Bucher, M. C., & Ranaldo, A. (2016). Conditional Currency Hedging.
Hay, C., & Marsh, D. (Eds.). (2016). Demystifying globalization. Springer.
Hirst, P., Thompson, G., & Bromley, S. (2015). Globalization in question. John Wiley & Sons.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Hong, Y., & Pavlou, P. A. (2014). Is the World Truly ‘Flat’? Empirical Evidence from Online Labor Markets.
Kang, H., & Shen, J. (2017). International Recruitment and Selection Policies and Practices. In International Human Resource Management in South Korean Multinational Enterprises (pp. 51-84). Springer Singapore.
Kaur, G., 2016. Social Media Marketing. Asian Journal of Multidisciplinary Studies, 4(7).
Siemens, G. (2014). Connectivism: A learning theory for the digital age.
Stiglitz, J. E. (2017). The overselling of globalization. Business Economics, 52(3), 129-137.
Thomas, D. C., & Peterson, M. F. (2017). Cross-cultural management: Essential concepts. Sage Publications
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