Drivers of globalisation free essay sample

?The drivers of globalisation are those pressures or changes that have impelled both businesses and nations to adopt this approach. There are four different drivers: 1. Cost drivers These seek out an advantage to a business from the possible lowering of the cost of the service or production, and would include: gaining economies of scale from increasing the size of the business operation; the development and growth of technological innovation; lower labour and other resource costs in developing countries; fast and efficient transportation systems with the development of improved infrastructure. 2. Market drivers The development of a world market brings about changes in the demands and tastes of the consumer by: the establishment of global brands which have instant recognition and are created and supported by global advertising and marketing (for example, McDonald’s fast-food outlets, Nike trainers and sportswear, and Levi jeans); increasing low-cost travel which begins to create the idea of global consumers with a growing convergence of lifestyles and tastes; growing per capita income which increases the purchasing power of consumers both individually and organisationally. We will write a custom essay sample on Drivers of globalisation or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 3. Government drivers Here nations work together to increase the possibility of trading activities in their international trade to create economic advantage and wealth. This can be brought about by: a reduction in trade barriers through the removal of tariffs to imports and exports; the creation of trading blocs to bring about closer co-operation and economic activity between nations; for example, the World Trade Organisation, the EU; the creation of more open and freer economies as a result of, for example, the ending of the closed economies of Eastern Europe and the relaxation of the Chinese economy; privatisation of previously centrally controlled industries or organisations: examples include the UK policy of the 1980s and 1990s of selling off to private shareholders previous state monopolies such as gas, telecommunications and electricity, and more recently in Russia of selling off the oil industry. 4. Competition drivers The opening up of economies or businesses creates an environment in which more players can enter the marketplace, whether nationally or internationally. This means that competition will increase as businesses strive to attract potential consumers for their products or services both at home and overseas. This is brought about by: the cross-border ownership of home firms by foreign organisations; for example, Rupert Murdoch’s USA-based News International Group’s ownership of key media organisations in the UK, such as the Times and Sun newspapers and Sky TV; movement of companies to become globally centred rather than nationally centred through acquisition, strategic alliances and takeover; the growth of these global networks of organisational structures and businesses which make countries interdependent within specific industries; e. g. the European Airbus project.