Globalization refers to increasing interaction between people and countries with the help of that of international flow of that of money and ideas. It is indicative of a process of integration which has different social along with cultural aspects. The term “globalization” has been derived from the word “globalize” that pointed out to the growth of an economic system that worked in the international platform. It is inclusive of goods and that of economic resource of technology and data (Goto and Endo 2014). The advancements made in the field of transport have produced steam locomotive and that of container ships. A business can take the advantages of this mode of transport and enter business in a different region. Rise of telegraph along with that of internet has thrown open windows of opportunity for different business. The development in the field of telecommunications infrastructure has greatly benefitted the aspect called “globalisation” (Tesfaye 2017). The improvements that are enjoyed in the modern era are the factors that have given rise to globalization and it has generated the interdependence of that of economic along with cultural activities.
There are many scholars who are of the opinion that globalization has originated in the modern era. There are others who have opined that it existed before that of European Age of Discovery and some have attributed the rise of globalization in that of the third millennium BC. Globalization of large scale started in the 1820’s. The late 19th century witnessed connectivity between that of economies of the world. International Monetary fund in the year 2000 specifically identified four aspects that were key to globalization: trade, movement of capital, migration and that of spread of knowledge. The process of globalization is affected by that of work organization, economics and that of natural environment.
The domestic market is often found to be saturated and the business feels the pressure of raising sales along with profits. The companies have profit target and in order to reach it the company has to move out of domestic market. Companies that harbour ambitions of earning more profits have to look for bigger market outside that of their boundary. The domestic markets grow at a slow pace and most of the companies are not content with the slow pace of growth (Crinis 2017). In order to achieve the objective of that of high growth rates the companies have to get sales from that of international markets. The customers want that their suppliers should have international presence so that the suppliers can effectively contribute in all the markets in which the buyer is operating. A multinational company that is looking for materials would want the suppliers to provide to all the global manufacturing locations.
The companies have to move out of global market so that they can maintain their market share. It is found that the global markets have high structure of cost that can compel the companies to look for a region where the cost of production is considerably low. It can help the company to earn profit and grow at a steady pace. Companies are found to have different stages in relation to development. The growth rate along with that of potential differs in different countries. Businesses do not like to focus their effort within limited region and they want to spread out the factor of risk. The companies want to look for a market that behaves in a different manner from that of the existing ones. They want a market that is different in terms of economic parameter like that of growth rate and size (Dabija, Pop and Postelnicu 2016).
The primary driver of going international is that of expanding the sales. Globalisation can help in diversifying the business and increase the customer base. A company can reap the advantage of being a first mover and gain benefit from it. The innovations of the product or services of the global company can help in drawing a huge range of customer base that can increase the revenues of the company manifold. In the event of the product or service becoming a success, the company can earn more revenue from that of the new customers if their domestic markets have become saturated. The solutions that are offered by the business can prove to be advantageous for people as it can help to a significant extent in improving their lives (Vezzetti, Alemanni and Macheda 2015). The company can significantly contribute to a great extent in bringing a change in the lives of the people in a positive manner. When a business goes global, it can gain access to potential skills who have unique skills. The skills can prove to be of great merit for the company and help in the growth and development of the company. It can provide the company with a competitive edge that can help them in winning global recognition (Haque and Azmat 2015).
Co-marketing alliance requires the co-ordination of different aspects of marketing- from that of research and development to that of production. Co-ordination of the marketing activities can help a company in achieving market performance that is superior. Sales, profitability along with market share are the three different aspects that will be greatly benefitted by that of globalisation. Co-marketing alliance is a strategic alliance the main focus of which is to create competitive edge in relation to a specific product market (Goto 2017). The resources along with capabilities of firms that has the same value chain can be pooled in for earning more profits in the market. The firms develop co-marketing alliance in order to develop market power that helps them in achieving sustainable competitive advantage.
The internal factors in relation to globalisation highlight how the firm changes the practice in order to compete on a global scale. Production, customer service, marketing strategy and development are the four internal factors that are integral to global companies. The company should be able to develop branding strategies that can align the logo with that of external presence in that of the new market. The brand should be associated with that of quality products that can help in the marketing of the brand. A brand of a company is the first thing that the customers notice and the perceptions towards the brand play a major role in determining whether the company would be able to earn profits in the global market (Marshall 2015). Companies should evaluate the work that is being done by their employees. Companies should assess the strength along with weakness of the employees and the constraints that the global competition can create. They can re-organize the company so that they can earn the benefit of maximum efficiency out of the present scenario of world economy (Pickles et al., 2015).
The SLEPT factor can help in analysing the external business environment of a business. SLEPT is an acronym for Social, Legal, Environmental, Political and that of technological. These external factors help in determining the external factors that can have an impact on the strategic decisions of a company. The social factor is indicative of the pattern of behaviour along with lifestyles of the people belonging to a particular region (Price and Lewis 2015). Age structure in relation to that of the population undergoes change over the course of time. Laws are continuously being changed from time to time in different arena like that of consumer protection and environment legislation. The legislation of a country keeps changing and in order to abide by such legislation, the business has to adjust itself to the changing times. Health and safety is another aspect that a business has to be concerned with and the employers of a business should be concerned about the employees. The employees are safeguarded by the laws of the government and a business has to look after these factors. Business should take a pro-active approach and make suitable alterations to that of the products along with process of a business.
The economy of a country has to face fluctuations on account of the world economic environment. Business is affected by the changes in that of interest rate and that of wage rates. Inflation also has a great amount of impact on the performance of a business. Business will be able to expand and face risks if the economic condition is found to be right. Political changes is indicative of the changes taking place within the government. These changes are extremely important as the regulations that are adopted by the country will also affect the business. Political changes are related with that of the legal changes of a place. Change in the field of technology has led to drastic changes in the structure of a business. The creation of a database has enabled the sharing of information and has created improvements in the service. Organizations should be cautious regarding the relevant technology in relation to the business that can help in improving the quality of service of their business.
The CAGE framework can help in determining the differences between that of domestic along with that of foreign business environment. The CAGE framework helps in highlighting four differences between that of the home and that of the foreign country that can have an impact on the performance of business (Myers Jr 2014). The CAGE framework highlights the four different factors:
Cultural distance: It signifies the difference in that of language along with customs.
Administrative distance: It highlights the differences in policies related to foreign investment, political proximity and that of currency that can have an impact on the performance of an organisation.
Geographic distance: It emphasizes the difference in that of transportation cost and that of time zones (Crinis 2017).
Economic distance: It highlights the differences in that of corporate system and that of income level.
The different factors that can compel a company to go international can be attributed to that of “initiating along with auxiliary forces”, “triggering cues”, “stimuli”, “drivers” and that of “ antecedents”. The push drivers relate to that of the negative aspect in relation to the domestic market and the pull driver is related to that of the attractive aspect of that of the foreign market. The push factor encourages the companies to adopt the process of internationalization on account of different factors present within the domestic market. The different conditions in Denmor Garments Manufactures Inc that facilitates their process of internationalization is that of small market and that of lack of demand (Denmor.gy, 2018). The economy of Guyana is dependent upon the export of that of sugar, timber and that of rice. The manufacture of these commodities is susceptible to that of the weather condition. On the event of the weather not being good, the business have to incur heavy loss and hence the economic condition of people in Guyana is poor that leads to poor lifestyle of the people. Lack of demand in relation to the garment is thus one vital reason for the internationalization of Denmor Garments Manufacturers Inc (Myers Jr 2014). The people cannot buy the products of Denmor Garments within the domestic market that causes the business to undergo heavy loss.
The entrance of Guyana into that of the Caricom Single Market has broadened the export market of the country and this is primarily in the sector of raw materials. It facilitates the process of internationalisation of Denmor Garments. The network theorists highlight the process of internationalisation as that of natural development that can develop out of network relationship with that of foreign firms. The relationship of Denmor Garments will be based on mutual trust along with that of commitment (Khan et al., 2015). By building on trust and increasing the commitment in relation to foreign networks the firm will be able to easily enter the foreign market. After the public exposure, the firms will be able to reap the advantage of international integration by making use of the network. Denmor Garments will be able to make a lot of profit on account of its internationalization process.
The risks in relation to internationalisation of Denmor Garments Inc is in relation to the planning along with that of the decision making process. Human resources along with financial resources are the two necessary prerequisites for the process of internationalization. The planning and that of decision making process is inclusive of the strategic and the issues related to operation (Muldrew 2016). Operational decisions that are crucial for the process of internationalization relates to target market and that of entry modes. In order to enable the process of successful internationalization, the company has to know about the current condition of the company along with that of the situation in that of the target market.
The major risks pertaining to globalization pertains to the factor of static thinking. Demner Garments Manufacturing Inc is based on Guyana and the cultural and mindset of people of the domestic country will be different for that of United Kingdom. The knowledge of the owner of Denmer Garments will be different from that of any other country. It will prove to be difficult for Denmar Garments Manufacturing Inc to adapt to the corporate culture of a foreign country. Denmar Manufacturing Inc will face the challenge that is associated with that of global manufacturing. They do not have the capital that is necessary for a company to enter into the international market. Cheap labour is another vital factor that the people in the developed along with developed countries tend to look out for when they want to enter into alliance with that of a small industry of a country (Srinivasan 2016).
In the modern era of globalization, power balance has shifted and it has moved from that of the producer to that of the retailer. In the present age, the buyer is responsible for setting the terms in relation to what is to be produced. The socio-cultural milieu of the developed countries will be drastically different from that of a developing country called Guyana. The global production is largely controlled by very few corporations. The large manufacturers build decentralized production network with the help of which goods are ordered. It is demanded from that of poor countries that they would be able to supply cheapest workers along with unregulated conditions. Firms like that of Denmor Garments Manufacturing Inc may not be able to maintain profit and will lose out when it competes in the international arena (Islam et al., 2017 ). When the goods are purchased for the operations of overseas business there can be uncertainty regarding the ability of the supplier to deliver within time and that of budget.
Internationalization of Denmor Garments Manufacturing Inc will be subject to financial along with political risk. The foreign currency exchange rate along with that of international laws will serve as major barriers in relation to internationalization. The risks in relation to ability of the supplier can be mitigated if the supply chain of Denmor Garments Manufacturing Inc is diversified by spreading the orders between different suppliers (Nayak et al., 2015). Suppliers should be distributed over that of several regions that can help in reducing the risk in relation to unforeseen problem like that of weather. A fail-safe measure like that of a back up supplier can be taken recourse to by that of Denmor Garments Manufacturing Inc in order to mitigate the risks in relation to internationalization.
Environmental regulations pose a threat in relation to internationalisation of Denmor Garments Manufacturing Inc. A local business lawyer and accountant can be taken recourse to by Denmor Garments in order to cut through that of red tape. Banking should be carried out with that of an institution that has branches in the domestic sector (Guyana) along with that of the country where it will operate business. Denmor Garments Manufacturing Inc should ask the bank whether it will be able to manage For Ex trading along with that of the conversion that can help them in avoiding the future issues (Nayak and Padhye, 2015). The political risk in relation to international business relates to nationalization along with that of seizure of assets. The local authorities sometimes fail to enforce the contracts in the region where the business is expanding to. Denmor Garments can work with that of the MIGA (Multilateral Investment Guarantee Agency) when they would undertake that of overseas investment. The World Bank Agency possesses of a team of experts that can create an insurance policy that would be customized to the needs of Denmor Garments that can help in promoting growth of the business (Vezzetti, Alemanni and Macheda 2015).
Market research can prove to be effective that can help in analyzing data in relation to a market. Denmor Garments Manufacturers Inc should know the about the competitors operating in the international market that will bolster them with the ability to compete successfully in the international arena. Effective research would help Denmor Garments Manufacturing Inc in setting a competitive price that would set them apart from that of the competitors. The global market has experienced and qualified people and Denmor Garments will be able to take the advantage of such expertise in order to expand their business. People are generally considered to be the most important part of an organisation and Denmor Garments will be able to take the advantage of such personnel and develop their business. Innovative along with talented personnel can prove to be a clear-cut advantage for that of business expansion (Goto and Endo 2014). The new employees can bring fresh ideas into that of the organization and can cause the business of Denmor Garments to flourish.
Business expansion of Denmor Garments will be able to expose the business to that of a larger audience. The enlarged pool of that of customers can help in improving the sales and lead to increased profitability of the company (Tesfaye 2017). Expansion can help Denmor Garments to be placed at the forefront of the minds of the customers.
Business expansion can help a firm in gaining a positive place that can help them to get financing. The financing is the most important factor of a business when it wants to expand in some other country. United Kingdom encourages the policy of foreign direct investment. The government of United Kingdom does not practice any kind of discrimination between that of national and that of foreign individuals. Department of International Trade existing within United Kingdom helps in preparing market information in relation to a large number of industries (Dabija, Pop and Postelnicu 2016). The companies that are foreign-owned are not treated differently from that of UK firms and that would greatly help Denmor Garments to expand over there.
Denmor Garments have to take into consideration the cultural background along with buying habit of people residing within the United Kingdom in order to successfully expand into that country. The global world of today proves to be an advantage for a business and the products of Denmor Garments need not be adapted so that it can suit to that of global markets (Crinis 2017). The quality of garments is of supreme quality that will help them in surviving within the competitive environment of United Kingdom.
Denmor Garments Manufacturing Inc can adapt and standardize the promotional strategies so that they can grow in the competitive environment of that of United Kingdom. A concurrent theme should be developed in relation to Denmor Garments Manufacturing Inc that should be promoted in United Kingdom with the help of social media. Technology has greatly evolved in the present era and building a website can prove to be advantageous for that of Denmor Garments (Vezzetti, Alemanni and Macheda 2015). It will help the people in United Kingdom to know about the excellent position of the organisation within that of Guyana.
The pricing of the products would depend on different factors in the United Kingdom. The cost of transportation and the import duties will help in deciding about the pricing of the products in United Kingdom. The garments can be transported by taking recourse to sea freights. The goods will be subject to that of UK Duty along with VAT that would considerable increase the price of products of Denmor Garments when it enters the market of United Kingdom (Haque and Azmat 2015).
Distribution within the market of United Kingdom will involve the goods to be moved in a chain from that of the manufacturer to that of the wholesalers. The wholesalers would then transfer it to the retailers from where the customers can buy the products (Marshall 2015). Distribution through so many layers will increase the prices of the products of Denmor Garments Manufacturing Inc when it enters the market of the place.
The profiling analysis of customers of United Kingdom helped in gathering crucial information about the target market. The United Kingdom has people coming from different cultural backgrounds and this should be considered when making the products. There are people of different age groups like that of adolescents, middle age group and the older people (Pickles et al., 2015). The products of Denmer Garments will mainly cater to those people who belong to the middle and the older age as they tend to look out for plain, comfortable clothes.
Social media should be made use of by Denmor Garments Manufacturing Inc so that it can compete in the global market. The major part of population in the United Kingdom is conversant with technology so use of social media platform like that of Face book and Twitter will help in the propagation of business of Denmor Garments. Almost three quarter of the population in United Kingdom make use of the site of Face book and the products of Denmor Garments should be promoted with the help of this platform so that it can attract the attention of consumers of United Kingdom (Price and Lewis 2015). The Denmor Garments can also take the help of Instagram that relies heavily on the use of images. It is widely made use of by the clothing companies and helps in reaching the young population.
Innovation of the products can greatly influence a business specially when it is entering into the international domain. Corporations should be able to adapt if it wants to survive in the international arena. United Kingdom is the perfect portrayal of the western society and overcoats are worn by the people of United Kingdom on account of the wintry weather. Comfortable and casual clothes are preferred by the children like that of t-shirt, jeans and that of foot wear. Denmor Garments Manufacturing Inc should take into consideration all these factors and innovate the products on that basis. The semi-new product will be able to replace the existing products of the company (Srinivasan 2016). They can help in providing a better performance and the value of the product will increase as compared to that of the old products. Customer surveys can be carried out in United Kingdom that can help in identifying the unique needs of the consumers of United Kingdom.
In order to gain a competitive advantage over that of the competitors, Denmor Garments Manufacturing Inc should improve the skills in relation to the designer trainer and facilitator. This can help in improving the quality of the products and provide an edge that can help them to grow in the long run. Designers hailing from good institutions and possessing great amount of technical skills will be advantageous for the reputation of Denmor Garments Manufacturing Inc. The design studios should be equipped with that of modern technologies like that of Computer Aided Design and that of Modern Sewing Room System that can greatly help in facilitating the business of Denmor Garments Manufacturing Inc (Vezzetti, Alemanni and Macheda 2015). Proper equipments along with tools should be made use of Denmor Manufacturing Inc in order to make their products coveted in the global arena. Technology can prove to be useful in the reduction of cost of the business. The employees should attend workshops and workshops that would help them in motivating the learners so that they can unlearn the old techniques and learn new methods.
Process innovation would help in the meeting the needs of the user and can help in increasing the quality of the products. Moisture observant fabric can prove to be the latest innovation and this is greatly sought after by the consumers of United Kingdom. This kind of fabric can help in absorbing the moisture along with that of sweat that can help in keeping the skin free of moisture (Srinivasan 2016). The moisture absorbing capacity of the fabric gives rise to higher comfort to the person wearing the apparel. Denmor Garments Manufacturing Inc should act like a leader and create innovative products by taking recourse to marketing campaigns.
The products in a particular market cannot last forever if it refrains from innovation of the products. Denmor Garments Manufacturing Inc should innovate the products so that they can last in the competitive market. The garment producers should reduce the operating costs so that the consumers can purchase the products at a low price. Social development has completely transformed the lifestyle of the consumers and on account of the demographic changes there are a large number of consumers who have differing needs (Vezzetti, Alemanni and Macheda 2015). Market success will be ensured in that of open world market if the product is attractive that can exceed the expectations of the customers. The modern consumer wants to look good and the look of the garment is the first factor that is taken into consideration when the consumers buy a particular product.
Denmor Garments Manufacturing Inc should apply the concepts of AQC (Attractive Quality Creation) so that it does not lose out in the current market. There are certain collections that are limited by that of time and market. Denmor Garments Manufacturing Inc should increase the supply of certain products when the demand is greater so that the consumer is not inconvenienced at any cost. Disposable clothing are in great demand by the consumers of UK and fast supply chain of Denmor Garments Manufacturing Inc should ensure that the collections of clothes are changed after every two week so that they can stay ahead of their competitors (Marshall 2015). Chemicals are made use of by the clothing sector and the modern consumers want products that are environment-friendly. Use of chemicals can prove to be harmful for that of the natural environment and for that of the health of the children and babies. Denmor Garments Manufacturing Inc should make the products in such a manner that does not jeopardise the natural environment along with that of the health of the consumers.
References:
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Dabija, D.C., Pop, N.A. and Postelnicu, C., 2016. Ethics of the garment retail within the context of globalization and sustainable development.
Denmor.gy (2018). Denmor Garments (Manufacturers) Inc. – Number 1 Garment Manufacturer in the Caribbean. [online] Denmor.gy. Available at: https://denmor.gy/ [Accessed 28 Jan. 2018].
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