GLOBALIZATION !!

                                       GLOBALIZATION

The literal definition of globalization is about the entire world becoming a one single market, basically suggesting the businesses of say one country to be able to move across international borders and trade in markets of different countries. As a result of which characterizing the whole world into a single market. Therefore globalization can also be expressed as a process of deeper economic integration between countries involving certain factors, such as expansion of trade in goods and services, an increase in the transfer of financial capital including the expansion of foreign direct system (FDI) by trans national companies (TNC's). The development of global brands and division of labour are also some major factors leading to globalization, some other things aiding these factors could be the migration of labor and the world trade organisation (WTO). For example Russia joined the WTO in 2012. As a result of the WTO over the last few decades trade openness has risen from 25% to around 40% for industrialized economies and from 15% to 60% for emerging economies. 

Below shown are some reasons that have majorly contributed to the cause of globalization.

Globalization when talked or thought about is a very complicated topic, as every one has a different opinion about it. Like every change taking place it also has its pros and cons, however in my opinion the benefits definitely outweigh the detriments. 

Globalization a blessing or a source of corruption. Globalization as stated earlier is the making of the world into one single market. Meaning different businesses from different countries can trade in several countries around the world. An everyday example of such businesses are Coca Cola or Nestle, companies like these can be found all around the world. With the expansion of such companies to such a wide scale, alot of changes occur which could be for the better or the worse. For instance when Nestle moved into Pakistan which is still a developing country with an ever increasing unemployment rate, it employed thousands of people. Other then this when such big companies move into new markets they increase competition. Increase in competition can cause prices to reduce, it may cause better quality standards. Moreover such multi national organisations have a reputation to maintain so would have certain job securities, safety measures, motivational techniques e.t.c. Due to which other domestic companies inorder to survive would have to meet up to the standards. This technique to reduce unemployment is also used quite deliberately by some countries. for example the British government did so by allowing certain Japanese car manufacturing to manufacture and operate in the UK,  in order to create jobs in small towns in the North of England. While on the other hand this expansion may cause major difficulties for the domestic market. For instance the expansion of Coca Cola into Scotland caused very old and already practicing brands like Iron bru not to stand a chance. As Coca Cola had alot of capital to invest, it was able to pay more, advertise more, produce more. As a result of which such small businesses could not stand a chance.

 International trade allows for developing countries to continue to develop by increasing national incomes to fund modernization. Globalization can benefit all countries, rich or poor, if that country is willing to be open to international trade.  Not only do they have to be open to the world market, but they would have to do it in such a strategic way based on how their country is run in order to gain from trade.  Globalization significantly led to higher incomes is in China over the past several decades.  They have mastered the concept of globalization in their own way far from the Western norms.  In an article by Dani Rodrik China has averaged almost 8 percent per annum per capita by opening up to the world economy.  By taking part in globalization China has been able to fund modernization by selling its products on the world market.  Another remarkable fact as a result of opening up to free trade is that in 1960 China’s life expectancy was only 36 years of age and by 1999 reached 70 years.  These statistics prove that with a strategy most fit to a country, globalization can be achieved successfully. 

However still those against this topic argue that globalization has caused cultural loss, It makes the rich richer and the poor poorer. Where as i believe that  people who are anti-globalization are merely blind to the actual facts.  Poorer countries do what they can to survive, and globalization helps them obtain higher incomes and improve living conditions.  Just because wages are significantly smaller in poorer countries does not mean exploitation is present.  Countries with lower incomes, poor literacy rates, and poor health care cannot become wealthy and efficient over night.  Globalization is a slow process, but it is working.  It is allowing for more techniques and methods to be shared around the world.  A country closed to the rest of the world will not learn to better themselves, and continue to do things they way they have been doing.  As a result there will not be as much room for improvements and new opportunities to countries that do participate in globalization.

The fact is that globalization is here to stay and that we will become increasingly connected, hence we must work to learn about the world we live in and how it functions.

SWOT ANALYSIS

              THE SWOT ANALYSIS





A SWOT analysis is a very effective way of recognizing what the strengths and weaknesses of an organisation are and also what opportunities might be available, along with the threats it might have to face. Therefore a Swot analysis helps the organisation to carve a sustainable niche in the market. Strengths and weaknesses suggest the internal environment of the organisation. For example, factors relating to products, pricing, costs, profitability, performance, quality, reputation, infrastructure e.t.c. All these factors usually tend to be in the present. While on the other hand Opportunities and Threats suggest the external environment within which the business operates. For example, factors relating to markets, sectors, audience, fashion, trends, competition e.t.c. All these factors however tend to be in the future.

The main advantage of conducting a SWOT analysis is that it has little or no cost, any one who understands the business can perform the analysis. A SWOT analysis concentrates on the most important factors affecting the business, therefore using SWOT a manager can understand the business better, address the weaknesses of the business, avoid the apposing threat to the business, work according to the opportunities going to be available, therefore develop business goals and strategies in order to achieve them.

When conducting a SWOT analysis the following limitations should be kept in mind. A SWOT analysis only covers issues that can definitely be considered as a strength, weakness, an opportunity or a threat. As a result it is difficult to assess uncertain factors, that are factors could be a strength or a weakness or maybe even both. As a result making the SWOT analysis not of much use in making complex decisions. As the analysis may be limited because it does not priorotise issues , or ot does not provide solutions for alternative decisions e.t.c.
Below can be seen a SWOT analysis for Apple;

Apple SWOT analysis 2013
Strengths	Weaknesses
Customer loyalty combined with expanding closed ecosystem Apple is a leading innovator in mobile device technology Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt) Brand reputation Retail stores Strong marketing and advertising teams	High price Incompatibility with different OS Decreasing market share Patent infringements Further changes in management Defects of new products Long-term gross margin decline
Opportunities	Threats
High demand of iPad mini and iPhone 5 iTV launch Emergence of the new provider of application processors Growth of tablet and smartphone markets Obtaining patents through acquisitions Damages from patent infringements Strong growth of mobile advertising market Increasing demand for cloud based services	Rapid technological change 2013 tax increases Rising pay levels for Foxconn workers Breached IP rights Price pressure from Samsung over key components Strong dollar Android OS growth Competitors moves in online music market

 Therefore through this example it can be seen and clearly understand what Apple has to do to avoid the threats that might be coming the companies way and get a grasp of the opportunities. For instance a rapid change in technology would man that the company would have to design new products accordingly, before its competitors do so. Like wise an opportunity such as a strong growth expected from the mobile advertisement market suggests that Apple should invest more towards its advertisement, which is expected to therefore increase sales automatically.  Such steps essential to be taken by a firm in order to do well or survive in the future can easily be projected through the SWOT analysis.

PESTLE ANALYSIS

                                   PESTEL ANALYSIS

The PESTEL analysis, that is the political, environmental, social, technological, economic and legal analysis of a business organisation describes the frame work of macro environmental factors and is a major part of strategic management. Pestle analysis is basically an external audit of an organisations environmental influences and therefore using the information from this audit to make strategic decisions. The purpose of this analysis, as a result is simply to make the organisation aware of its current environment and assess potential changes in the future, due to which the organisation would be in a better position to respond to these changes then its competitors. Hence by understanding the Macro environment in which the organisation operates, makes it possible for the business to take the advantage and opportunities to maximize opportunities and minimize threats for the future.

Further more the PESTEL analysis is important for the following main reasons.Firstly it helps the organisation to spot business opportunities and gives an advanced warning of any significant threats. Secondly it reveals the change in direction within the business environment, this as a result helps the managers organize what they are doing, so that they work with change rather then against it. Therefore the managers can avoid starting new projects that are likely to fail due to external changes in the environment.

For example, opportunities can come from new technologies that help you reach new customers such as the internet, using eCommerce, or maybe a new government policy that lowers the barriers to entry into a market full of potential. While on the other hand threats can include deregulation that exposes the company to competition for instance a shrinking market, or an increase in interest rates can cause problems if an organisation is burdened by debts.

More over now we can see how a PESTEL analysis may be done on a company like APPLE;

Political Factors: Apple used to obtain 52% of its business from outside the US, due to the bad international relations, wars and terrorism Apple might be influenced in a huge way, however the organisation has no control over these factors. Apple also manufactures a number of its product parts from outside the US, for instance China, Ireland, Korea e.t.c. The bad political relation between US and the other world may have extremely bad outcome for the company.

Economic Factors: The global economic crisis had a huge impact on Apple, the inflation rate went high and so did the unemployment rate in the country and since Apple products were viewed as luxury products, the customers started spending less on them. Even the fluctuation in the value of the US dollar has a great impact on Apple as a fall may decrease Apples revenue in the global market.

Social Factors: Apples unique selling point has always been the quality and the designs of its products, thus globalization plays an important role. Due to globalization which is making the world economy a single economy, Apple has been able to mark its self in the world market and hence making customers wanting to spend on its products. Apples products with time have become a product to have for social acceptance, therefore social factors being of much importance to the company.

Technological Factors: Apple has invested largely in its products research and development field and thus, Apples products are at the top of the world market. Due to the drastic change in technology over the years, this factor has become of most importance to the company as the change in technology has decreased the life cycle of the products, therefore newer and better ones are to be made with change in order for the company to succeed in the ever competitive world market.

Legal Factors: Nokia has filed various law suites against Apple, claiming the violation of certain patents, also in China apple is fighting for its right to the ipad trademark.

Therefore if all these factors kept in mind Apple can work according to the changes in these factors and keep moving towards success as it already is.

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