IMPACT OF GLOBALIZATION ON WORLD ECONOMY: POSITIVE IMPACT OF GLOBALIZATION ON WORLD ECONOMY: 1. More efficient markets The sign of an efficient market is where there is an equilibrium between what buyers are willing to pay for a good or service and what sellers are willing to sell for a good or service. If you can improve the way you produce a good or service by doing things such as outsourcing certain processes or buying from an overseas supplier that offers discounts, you can then afford to lower your selling price which results in increased demand and affordability. 2. Increased competition Anytime that you have
4) Market share * Designed to increase or maintain market share regardless of fluctuations in industry sales. Market share objectives are often used in the maturity stage of the product life cycle. 5) Cash Flow * Designed to maximize the recovery of cash as quickly as possible. This objective is useful when a firm has a cash emergency or when the product life cycle is expected to be quite short. 6) Competitive Matching * Designed to match or beat competitor's prices.
In capitalism, consumers get the freedom to choose and purchase the goods and services they desire using dollar votes. This will drive firms to compete against each other by lowering the price of the goods and improving their goods and services. In order for firms to maximise profits, they must use resources efficiently. However,
Before we explore how a reduction in the interest rates leads to an increase in consumption we must first define what it exactly means to consume. Mainstream economists such as Tim Harford define consumption as the spending by house holds on consumer products and services. As the interest rate decreases it leads to consequential reactions on behalf of consumers, one of these actions is an increase in the level of goods consumed. This is a result of it being cheaper to borrow money from banks and other financial institutions, this meaning purchases which have been prolonged or “put off” by consumers can now be readily purchased. This is an effect of a lower opportunity cost as the overall cost associated with borrowing has decreased and the marginal benefit of saving has increased, meaning consumers will receive more of a benefit if they purchase goods on credit based agreements opposed to saving, leading to an increase in the amount of credit transactions.
Performance Review The generic strategies, cost leadership, differentiation, and focus are applied at the business unit level. The cost leadership strategy calls for low cost producing in the industry with a level of quality. The company will sell their product at average industry prices for higher profits or below the average industry price for higher market shares. The differentiation strategy develops a product that is unique and valued by its customers and perceived as different. Its value is added by is uniqueness and allows for a premium price.
The story, however, does not end there. ii. A second reason why multinational companies set up businesses abroad is to benefit from cost advantages. Labor intensive operations can be shifted to countries that can provide cheap labor. In certain cases availability of raw material might provide an advantage.
Price *Improve competitiveness in pricing with a totally different strategy or approach than competitors. Need competitors’ selling prices, strategies by benchmarking. *Low prices as a long‐term approach to business to attract more customers. They can implement this strategy by lowering transportation and storage costs. Need supply chain, inventory, order processing, replenishment, and manufacturing process data.
In the service sectors, the cost saving from offshoring enables companies to create new service lines, many of which had been deferred for want of investment. New services increase customer satisfaction and become new revenue streams, as well as growth paths for companies. The geographic nature of offshoring brings its own advantages. It helps the company expand its reach, thereby helping the company grow. This growth mitigates any negative effects of offshoring.
It also ensures that he can put a high quality product on the market at a relatively low price. On the contrary, when the government requires that workers be paid more, businesses are forced to make adjustments in other areas to offset the added costs, such as reducing work hours, cutting benefits, hiring fewer people and charging higher prices. Naive lawmakers tend to believe, or at
Other than that, a company can have an advantage in the production cost with a proper and strategic plan. To have a lower cost but higher productivity, a company might outsource a portion of its operation. Lower cost can be an advantage because the company can sell their product with the same or regular price as its competitor from a less capital, so that the profit will be higher. Strategic location is another advantage that can determine whether the business will become successful or fail. The location can be used to predict how many potential customers are available.