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Globalisation And The Impact Of The Internet Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 4285 words Published: 1st Jan 2015

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Globalization is the system of interaction among the countries of the world in order to develop the global economy. Globalization refers to the integration of economics and societies all over the world. Globalization involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation, and infrastructure.

Internet is a global network connecting millions of computers. More than 10 countries are linked into exchanges of data, news and opinions. Unlike online services, which are centrally controlled, the Internet is decentralized by design. Each Internet computerhttp://kona.kontera.com/javascript/lib/imgs/grey_loader.gif

, called a host, is independent. Its operators can choose which Internet services http://kona.kontera.com/javascript/lib/imgs/grey_loader.gif

to use and which local services to make available to the global Internet community. Remarkably, this anarchy by design works exceedingly well. 


The internet has changed the way business is conducted . Through various web business applications, it has given great opportunities for business to increase their revenues, cut their cost and manage their daily operations in a more efficient and effective manners.

Communication is the key of globalization.   Businesses large and small needed a way to advertise, sell, purchase, and enhance their product worldwide. What better way to accomplish this than through the use of the Internet.   "The Internet provides a cheaper, faster and easier method of communication, an alternative that has created a 'global audience'", as mentioned by Renato Ruggiero, Director General of the World Trade Organization.

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There has been a great deal of discussion in recent years about globalization, which can be defined as "the intensification of economic, political, social and cultural relations across borders." Evidence of globalization is seen in our daily lives. We are being influenced by the on rush of economic and ecological forces that demand integration and uniformity and that mesmerize the world with fast music, fast computers and fast food with MTV, Macintosh and McDonald's, pressing nations into one commercially homogeneous global network: one Mc world tied together by technology, ecology, communication, and commerce.

Technology is perhaps the most visible aspect of globalization and in many ways its driving force. Communication technology has revolutionized our information systems. Globalization tends to be most perceptible and observable in almost every facet of life mainly due to the emergence of internet technology. The internet technology is globally integrating and amalgamating the people of the world. The advent of the Internet in its unquantifiable shape and form has over the past decade provided a common platform upon which countries from all corners of the Earth are able to communicate and share information. Despite of the widespread usage and availability of new technology, the issue been brought to the forefront of the debate between advocates on both sides of the globalization aisle.

According to economists, there are a lot of global events connected with globalization and integration.

It is easy to identify the changes brought by globalization.

1.   Improvement of International Trade. Because of globalization, the number of countries where products can be sold or purchased has increased dramatically.

2.  Technological Progress. Because of the need to compete and be competitive globally, governments have upgraded their level of technology.

3.  Increasing Influence of Multinational Companies. A company that has subsidiaries in various countries is called a multinational. Often, the head office is found in the country where the company was established.

An example is a car company whose head office is based in Japan. This company has branches in different countries. While the head office controls the subsidiaries, the subsidiaries decide on production. The subsidiaries are tasked to increase the production and profits. They are able to do it because they have already penetrated the local markets.

The rise of multinational corporations began after World War II. Large companies refer to the countries where their subsidiaries reside as host countries. Globalization has a lot to do with the rise of multinational corporations.

4.   Power of the WTO, IMF, and WB. According to experts, another effect of globalization is the strengthening power and influence of international institutions such as the World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank (WB).

5.   Greater Mobility of Human Resources across Countries. Globalization allows countries to source their manpower in countries with cheap labor. For instance, the manpower shortages in Taiwan, South Korea, and Malaysia provide opportunities for labor exporting countries such as the Philippines to bring their human resources to those countries for employment.

6.   Greater Outsourcing of Business Processes to Other Countries. China, India, and the Philippines are tremendously benefiting from this trend of global business outsourcing. Global companies in the US and Europe take advantage of the cheaper labor and highly-skilled workers that countries like India and the Philippines can offer

7. Civil Society. An important trend in globalization is the increasing influence and broadening scope of the global civil society.

Civil society often refers to NGOs (nongovernment organizations). There are institutions in a country that are established and run by citizens. The family, being an institution, is part of the society. In globalization, global civil society refers to organizations that advocate certain issue or cause.

There are NGOs that support women's rights and there are those that promote environment preservation. These organizations don't work to counter government policies, but rather to establish policies that are beneficial to all. Both the government and NGOs have the same goal of serving the people.

The spread of globalization led to greater influence of NGOs especially in areas of great concern like human rights, the environment, children, and workers. Together with the growing influence of NGOs is the increasing power of multinational corporations. If the trend continues, globalization will pave the way for the realization of the full potential of these two important global actors.

The globalization that we intuitively know - call centers in India, toy factories in China - is just one piece of an increasingly competitive landscape. As manual work becomes more automated and trade barriers fall, companies chase knowledge workers and efficiency just as much as they do cheap labor and access to new markets. In this new calculus, it is often surprising who comes out ahead. According to the Business Competitive Index, the Global Competitive Index's sibling measure developed by Harvard economist Michael Porter, the countries with the lowest wages relative to competitiveness - that is, the best values as investment locations - are Taiwan, Hong Kong and India, followed by Chile, Singapore, the Czech Republic and the US.

And so we are left with a world that even just five years ago would have seemed topsy turvy: an Indian software firm that employs 500 people in Puerto Rico, a Chinese auto-parts maker with R&D centers in Detroit and Ontario, Calif. If you're a region trying to hang on to business, geography offers little protection anymore, especially as free-trade zones proliferate in countries from Dubai to Mauritius, and burgeoning heavyweights like Turkey take out full-page ads in US magazines boasting about their university graduates and gains in GDP. "Your competitors are in your backyard now in a way they never were before," says Alec Hansen, president of the Economic Competitiveness Group, an outfit that advises governments, companies and development organizations. "The world has gotten a lot scarier."

The best way for a region to overcome those fears and win out is to figure out how its talents best fit into the global supply chain, says Eduardo Tugendhat, president and CEO of Carana Corporation, a company which designs economic development programs. In Macedonia, a land-locked country with a small domestic market, Tuhendhat's firm suggested harnessing the nation's long tradition of metal working and pushing into the machining and automotive parts sectors in order to take advantage of the growing auto industry in neighboring Slovakia and Romania - two countries that have become a hot spot because of their inexpensive labor and access to the markets of the European Union.

But with transportation costs continuing to plummet and markets becoming freer, there are many more places for companies to set up shop, and traditional advantages such as cheap labor or a lack of tariffs mean less and less in many industries. Multinationals are increasingly opening major operations in second- and third-tier cities - GlaxoSmithKline in Posnan, Poland, Google in Belo Horizonte, Brazil - places that plenty of people have never even heard of. "Companies are adopting an all-shore strategy," says Dennis Donovan, principal of Wadley Donovan Gutshaw Consulting, which helps companies decide where to locate.

Searching for an edge, many regions are applying the concept of clustering with renewed zeal. The idea of focusing a geographic area on a particular industry in order to achieve economies of scale has been kicking around since at least 1890, when the economist Alfred Marshall coined the term "industrial district" to refer to neighborhoods that contained both factories and all their workers. In the 1990s, Harvard's Porter started using the word "cluster" to get at the usefulness of companies in close proximity sharing infrastructure, ideas and employees - like high performance cars in Germany. Some predicted that a globalized company's ability to cherry pick regions would kill the notion of clusters, but countries are trying to establish industrial niches for themselves more than ever.

Turkey established a textiles cluster to try to fend off lower-cost rivals. Jordan has positioned itself a regional center for medical services. Singapore is making a play for biotechnology. Of course, there is always a risk in spending massive amounts of focus and money on one sector since so many factors have to align for economic development to work. "Is Singapore really where the top scientists in the world want to be working?" asks Carana Corp.'s Tugendhat. "Just because you build a great campus doesn't mean they're going to come to it."

When clustering does work, though, it's gold. Consider Yokkaichi, Japan, a city of 300,000 people that is the premier place to make NAND flash memory, which is used in cell phones and MP3 players. Sandisk, a Milpitas, Calif.-based company that designs, manufactures and sells memory cards, moved its manufacturing base there from Manassas, Virginia a few years ago, partly to be closer to Toshiba, a company it partners with. Yokkaichi already had the infrastructure for both manufacturing and for the large R&D outfit that goes along with making memory cards. "By having it all in close proximity, it reduces overhead costs," says Sandisk president and COO Sanjay Mehrotra, "and that's the name of the game, to be able to produce product at the lowest possible cost." (Notice that had nothing to do with cheap labor.)

Now Sandisk is building a new factory in Yokkaichi to produce 40% more wafers a month, which will significantly increase the $1 to $1.5 billion the?company already annually invests to keep its fabs on the cutting edge. And that leads to another major reason Sandisk is in Japan: the country's?advanced capital structure and low interest rates let the company borrow money cheaply. Clustering may work well, but other aspects of a country's competitiveness - like its macroeconomic fundamentals - still matter. "The bottom line," says the Economic Competitiveness Group's Hansen, "is you have to do everything right."

In today's economy, a big part of that everything is being able to produce a desirable workforce. "If we're hearing a mantra today, it's workforce - finding the qualified people," says Rob DeRocker, executive vice president of Development Counsellors International, a firm that helps regions position themselves. The global chase for talent is just as true for manufacturing workers - you have to find skilled labor if all your machines are computer-controlled - as it is for PhD scientists.

Microsoft knows a thing or two about the latter. The Seattle computer giant has six high-end research centers - three in the US, one in the UK (abutting the Cambridge University computer science department), and two newer outposts, in Beijing and Bangalore. The strategy is partly to go where the world's great universities are: the Beijing lab is placed squarely between Beijing and Tsinghua universities, the so-called Harvard and MIT of China. But part of it is also a recognition that as more countries move from developing to developed, with the amenities and job opportunities that used to only be found elsewhere, the talent in many cases would rather stay home. "We realize that increasingly we will not be successful in recruiting the best people in the world and getting them to come to and stay in the US," says Craig Mundie, Microsoft's chief research and strategy officer.

Of course, the world doesn't completely change over night. Many of the classic reasons companies set up shop in far-flung locales, like gaining a foothold in a new market, are still in the mix. Nissan, for instance, is among the carmakers now building a plant in Russia, a country flush with money from the skyrocketing price of oil. In 2003, Nissan sold 8,000 cars in Russia, a number that jumped to 24,000 in 2004, and to 50,000 in 2005. "We started thinking, if this isn't a fluke, we need to think about localization," says Dominique Thormann, Nissan's senior vice president for administration and finance in North America - both because of how expensive cars are to ship and because of the 25% tariff charged at the border.

That's a very traditional way for a company to think about reaching overseas. But even the auto industry isn't immune from the evolution of globalization. These days, it's not uncommon to source auto parts for a particular car from around the world: cast iron from India, seat fabric from Tunisia. The competition continues to deepen.

The computerization of business and telecommunications has led to much talk about the "new economy" and, possibly, a related surge in productivity. A less recognized development is that information technology, particularly the Internet, is changing the labor market and labor organizations in important ways.

internet has been largely felt by the business fraternity. In fact,

with the introduction of internet, the definition of business development has gone for a

permanent changeover. Unlike the past, today quality and quantity are not the only

benchmarks for the growth and development of a business. Today visibility in the market

is a bigger factor. Your brand should reach the global market. Your products should be

visible everywhere. People across the world should recognize your brand. Today product

promotion and campaigning are the most important criteria for achieving success in a

business. And for successful prpoduct promotion and campaigning you need to improve

your communication and interaction with people.

With its modern tools, internet helps you to do that. The days of publishing

advertisements in newspapers are over. You need to reach people faster and you can do

that through online marketing. People can get to know about you, your company and

every detail about it just with a click on the mouse at any time and from any place.

Regular communication between all entities of the business, such as manufacturer,

supplier, buyer, seller, wholesalers and dealers is very important. The modern interactive

tools like chats, emails, SMSes helps a business organization to create a supply chain

management that keeps all entities of the business closely linked with each other

For one thing, the increased demand for those working with the Internet, and computers more broadly, has boosted both their wages and the hours they work, NBER Research Associate Richard Freeman finds. Further, the low cost of transmitting information over the Internet is shifting job search and recruitment activities to the Web, he adds. Third, the ease of communicating and interacting over the Internet has led unions to experiment with web-based modes of servicing members, perhaps thereby improving union democracy and reversing the long-run decline in membership, and carrying their message to the wider public.

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"The new technologies, together with other important changes, such as the continued increase in the educational attainment of the work force, shift of employment to service sectors, and increased employment of women, are producing a labor market that differs greatly from the industrial labor market that characterized the 20th century," Freeman writes in The Labor Market in the New Information Economy

Companies can use the Internet and Internet technologies to improve the efficiency and effectiveness of particular value chain activities:

a powerful tool for better supply chain management

improving internal operations, e.g.:

just-in-time inventory

gear production schedules and production quantities to buyer orders

more accurate monitoring of buyer preferences and shifts in demand

introducing collaborative data sharing with distribution channel partners:

online systems reduce transaction costs

The impact of internet on globalization has both positive and negative aspects. The positive impact of the internet technology on globalization include the modernization and improvement in the business sector on a world wide basis. Businesses improve their global competitiveness and productivity with more efficient electronic transaction processing and instant access to information. New information and communication technologies (ICT) as well as radically changing international political and regulatory environments reshaped the nature of management consulting. It was during this period that ICT took center stage for global management consulting firms. The market is now more competitive with consumers having greater choices.

With the advent of the internet technology work in the foreign countries is more available and accessible because the domestic laws are not as rigorous as they once were, thus assisting in the global nature of the business and allowing new consulting firms to establish a presence in countries that was once restricted.

The services of the IT Professionals have been dramatically impacted by the explosive growth in Internet use and related technologies. In the 21st century, venerable trends in ITPS such as centralization and globalization are accelerating, and this is overturning and reversing the leverage ratios and thus introducing completely new capabilities. The Internet is impacting the way that services are bought, sold, and delivered, altering relationships among clients, firms, and employees and speeding the globalization of the consulting industry. There can be seen a better relationship between the clients and the firms through internet which is globally seen all over the world. Instead of face to face meetings the clients can easily deal with the big firms and industries via internet and thus developing a firm client relationship.

With the use of the internet technology there can be seen a great positive force on globalization as it tends to increase the communication processes between people living in different parts of the world and also helps to promote the political, social, economic, and cultural aspects of a country.

As there is a positive impact of internet on globalization there can be seen a negative impact of internet on globalization as well. While the interdependence and the internet technological advancement have increased in some parts of the world. The globalization of internet technology in the less developed countries typically is a one way proposition: the people do not control any of the information; they only receive it. It is also true that worldwide the ability to control or generate broadcasts rests in the hands of the tiny minority. This shows that in these countries the internet technology generally does not have a neutral application. The placement of the internet technology in developing countries often causes social costs, as well as costs in the form of urbanization, employment displacement, and the "digital divide."

There can be seen specific and particular risks in the global environment because the gain in power from the techno-economic progress is rapidly being overshadowed. Risks in this sense can be viewed as the probability of harm arising from technological and economic change. Hazards linked to industrial production, for example, can quickly spread beyond the immediate context in which they are generated. Although the current globalization system has different attributes, rules, incentives, and characteristics, but the system is as pervasive as the Cold War system.

In order to create a balance in the application of the internet technology it must adhere to the specific standards. The internet technology no matter where it is applied, can only be understood and valued in relation to the social group that creates or uses it, because every model of society and development conceives of and uses a different kind of technology, which should neither give priority to community action nor to the local necessities.

Thus the internet both has positive as well as negative effects on globalization and they play equally an important part in the financial and economic status of a specific country. The negative impact on the globalization can be reduced if an equilibrium and balance is created and developmental techniques and schemes of information technology are introduced in the less developing countries so that they may progress and pace forward in the 21st century.

This current wave of globalization has been driven by policies that have opened economies domestically and internationally. In the years since the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international industrial and financial business structure.

Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life. Information technologies have given all sorts of individual economic actors-consumers, investors, businesses-valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with far-flung partners.

Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people. Resistance to globalization has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital, labor, goods, and ideas that constitute the current wave of globalization.

So in a nutshell, the importance of internet in business development is immense. In fact, without this wonderful gift of technology, prosperity of business in today's world would have been a great challenge. For the business fraternity, internet has been the greatest support and will surely keep on serving it better in the future too.

Importance of internet, business development, technology to mankind, online marketing

The Internet has significantly affected globalization. The needs of the globalized world are the accelerator of Internet-related technologies.


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