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Globalisation of markets

What makes a company successful? What items can a company produce for its customers? And more importantly, what do the customers want?

All these questions have been asked many times, especially now that the pandemic has changed our approach towards the sales and international marketplace, the approach of companies globally has seen a gradual change. Competition between companies has surely increased, which often makes them consider that their efforts are not worth it. In today’s era, a well-managed company is one, which offers globally standardized products that are advanced, functional, reliable and affordable, and not just focuses on customizing its items. In order to attain success, global companies have to concentrate on what everyone wants rather than worrying about the details of what everyone thinks they might like.

Gone are the days when a company could sell last year’s models, or lesser versions of advanced products, in the less-developed world. And gone are the days when prices, margins, and profits abroad were generally higher than at home. Today’s era is driven by technology and as a result it has given birth to a new commercial reality. Corporations geared to this new reality benefit from enormous economies of scale in production, distribution, marketing, and management. By translating these benefits into reduced world prices, they can decimate competitors that still live in the disabling grip of old assumptions about how the world works. The advent of the internet has facilitated the customers and companies to interact at any place. It has decreased the cost of product and ancillary costs as well, which is the benefit for the buyers as well as manufacturers.

Globalisation has made it easy for MNCs and other small companies to reach their customer internationally. Whenever we talk about globalisation, an important aspect we need to address here is that, multinational and the global corporation are not the same thing. The multinational corporation operates in a number of countries, and adjusts its products and practices in each, at high relative costs. The global corporation operates with resolute constancy, at low relative cost, as if the entire world were a single entity; it sells the same things in the same way everywhere. While considering the strategies used in both the important thing is to have a constant communication, which not only lighten and enhances work, but also raises living standards of the people. Today, modernity is not just a wish, but a widespread practice among individuals, who have an unyielding passion or religious fervour, towards ancient attitudes and heritages. Moreover, Multinational Corporation knows a lot about countries and their supposed differences. Due to this, they easily adapt to the national differences, and undermine the need of possible transformation if they are able to work on favourable prices. On the other hand, the global corporation knows everything about the absolute need to be competitive on a worldwide basis as well as nationally and seeks constantly to drive down prices by standardizing what it sells and how it operates. It treats the world as composed of few standardized markets rather than many customized markets. It actively seeks and vigorously works toward global convergence. Its mission is modernity and its mode is price competition, even when it sells top-of-the-line, high-end products.

In the business world, there is a trend of global commonality in the market. Corporations sell standardized products in the same way everywhere—autos, steel, chemicals, petroleum, cement, agricultural commodities and equipment, industrial and commercial construction, banking and insurance services, computers, semiconductors, transport, electronic instruments, pharmaceuticals, and telecommunications, to mention some of the obvious. For instance, consider the cases of Coca-Cola and Pepsi-Cola. These are globally standardized products sold everywhere and welcomed by everyone. Both successfully cross multitudes of national, regional, and ethnic taste buds trained to a variety of deeply ingrained local preferences of taste, flavour, consistency, effervescence, and aftertaste. Market segments are well aware, that everywhere around the world, people have homogenized demands. Even small local segments have their global equivalents everywhere and become subject to global competition, especially on price.

The implacable truth of all modern production is that, large-scale production of standardized items is generally cheaper within a wide range of volume than small-scale production. Even though some argue that computer-aided design and manufacturing will allow companies to manufacture customized products on a small scale, but cheaply. The catch is that, if a company treats the world as one or two distinctive product markets, it can serve the world more economically than if it treats it as three, four, or five product markets. If the companies understand the true purpose of commerce, it will systematically shape the global companies. With the vectors of technology and globalisation, they will be able to offer high-quality, more or less standardised products at optimally low prices, thereby achieving and expanded market and profits.




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