GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

Group members; Leong Colin Teng Suzanne Sharan Chao Ming Ben Sharon David Tsen Tsen

GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES WHAT IS GLOBALIZATION?

GLOBALIZATION IS THE INTEGRATION OF ECONOMIES, SOCIETIES AND CULTURES OF VARIED WORLDS THROUGH THE PROCESS OF TECHNOLOGY AND TRADE.

GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

Globalization is the strategy of approaching worldwide markets with standard products

This is done as firms either saturate in their domestic market and finds its strategies exhaustive and decides to shift the same strategies abroad, on a global level.

THE VARIOUS EFFECTS OF GLOBALIZATIONS

Industrial Ecological Financial

Technical & Informational

Economic

GLOBALIZATION

Religious

Political

Legal / Ethical Competition

Language & Cultural

THE VARIOUS EFFECTS OF GLOBALIZATIONS

Industrial Emergence of worldwide production markets and boarder access to a range of foreign products for consumers and companies
1.

THE VARIOUS EFFECTS OF GLOBALIZATIONS

Financial Growth of worldwide financial markets and better access to external financing for borrowers
2.

Economic Realization of a global common market, based on the freedom of exchange of goods and capital
3.

THE VARIOUS EFFECTS OF GLOBALIZATIONS

Political Some use globalization to mean the creation of a world government which regulates the relationships among governments and guarantees the rights arising from social and economic globalization; such as US and China
4.

THE VARIOUS EFFECTS OF GLOBALIZATIONS

Language & Cultural Growth of cross-cultural contacts; advent of new categories of consciousness and identities which embodies cultural diffusion world culture
5.

THE VARIOUS EFFECTS OF GLOBALIZATIONS

Competition Survival in the new global business market calls for improved productivity and increased competition
6.

THE VARIOUS EFFECTS OF GLOBALIZATIONS

Ecological The advent of global environment challenges that might be solved with international cooperation; such as climate change, cross-boundary water and air pollution & etc
7.

THE VARIOUS EFFECTS OF GLOBALIZATIONS

Technical & Informational Development of Global Information System; such as Internet, communication satellites, wireless telephones & etc
8.

THE VARIOUS EFFECTS OF GLOBALIZATIONS

Legal / Ethical Creation of the international criminal court and justice movements
9.

Religious Speared and increased interrelations of various religious groups, ideas and practices
10.

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

HSBC One of the world largest bank, operates across the globe setup their Global Technology Centre in Pune, India which develop software for the entire HSBC group

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

McDONALD A North American company which now a global enterprise with more than 31,000 locations worldwide. One of the example of food causing cultural influence on global scale

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

GOOGLE Google Inc is a multinational public cloud computing, Internet search and advertising technologies corporation. Google's rapid growth since its incorporation has triggered a chain of products, acquisitions and partnership beyond the company's core search engine

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

E-BUSINESS & E-COMMERCE The process of transacting business (buying & selling) through virtual market; birth of new technology such as the internet and the World wide web.

Today, the buyer and seller no longer need to meet in a physical market place such as amazon.com

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

NEW TRADE AGREEMENTS Trade agreement refer to corporation between governments of different nations to promote and liberalize trade between one another; NAFTA - Mexico, USA & Canada (North American Free Trade Agreement) AFTA - ASEAN member countries (Asean Free Trade Agreement)

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

INTERNATIONAL CHAIN HOTEL Ritz-Carlton Hotel Hilton Hotel Marriott Hotel Hyatt Hotel

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

AUTOMOBILE Toyota Nissan Hyundai Proton

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

CASE STUDY ON AIR ASIA Air Asia operates over daily 400 flights, with both domestic and international routes covering Indonesia, Malaysia and Thailand and with international routes, primarily from Kuala Lumpur, to Australia, Bangladesh, Brunei, Cambodia, the People's Republic of China, Laos, Myanmar, Philippines, Singapore, Sri Lanka, Taiwan, the United Kingdom, South Korea and Vietnam.

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

CASE STUDY ON AIR ASIA (cont) Tony Fernandes had also declared that 2010 will his India Year after coming off a threeyear campaign in China.

Air Asia had been operating on the fringes of India connecting Malaysia to Kolkata, Trichy, Kochi and Trivandrum. The airline plans to gradually link New Delhi, Chennai, Bangalore, Hyderabad and Mumbai to Kuala Lumpur.

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

CASE STUDY ON AIR ASIA (cont) Effects of Globalization on AIR ASIA The globalization consideration impacts virtually all-strategic decisions in a company forced Air Asia to survival for business

Air Asia implement E-commerce and maximized information technology usage to make the efficiency and effectively in the company and make possible low cost carrier in their business.

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

CASE STUDY ON AIR ASIA (cont) Challenges faced by AIR ASIA In order for Air Asia to globalize, Fernandes needs airport operators; which includes government-owned ones to participate.

PROOF OF GLOBALIZATION OF FIRMS IN DEVELOPING COUNTRIES

CASE STUDY ON AIR ASIA (cont) Challenges faced by AIR ASIA For 3 years, Air Asia have tried to negotiate with the Airport Authority of India and private firms that run airports in India for special allowances but had come to no avail. High ground handling charges and security costs are one of the biggest challenges for Tony Fernandes even back home in Malaysia.

WORLD DISTRIBUTION OF HOUSEHOLD WEALTH GDP & POPULATION IN THE YEAR 2000

Data obtained from the UN-WIDER report on worldwide distribution of household wealth: http://www.wider.unu.edu/research/2006-2007/2006-2

2010 IMD WORLD MOST COMPETITIVE COUNTRIES

The table shows the ranking of 10 countries in 2010 International Institute for Management Development (IMD)

Data obtained from IMD WORLD COMPETITIVENESS YEARBOOK 2010 http://www.imd.ch/research/publications/wcy/upload/scoreboard

2010 IMD WORLD MOST COMPETITIVE COUNTRIES The results of the IMDs World Competitiveness rankings 2010 have been strongly affected by; Gross Domestic Product data Exchange Rates (especially the dollar versus the Euro) Financial Assets (the financial crisis) Trade and Investment flows
Data obtained from IMD WORLD COMPETITIVENESS YEARBOOK 2010 http://www.imd.ch/research/publications/wcy/upload/scoreboard

COMPLEXITY OF THE GLOBAL ENVIRONMENT

Differences in political, legal, social, and cultural environments Demands of foreign governments Widely differing economic and social conditions Business practices and negotiating styles are different Communication with, and control of, overseas affiliates is difficult Extreme competition Restrictions imposed by the Trade Unions of the respective countries

FUTURE GLOBALIZATION TRENDS

The future globalization trends give an idea about how regional economies are changing and evolutions in the economic activity that lie behind these changes. Regions then have to decide what is a sound basis for decision-making on investment and strategy given these trends.

FUTURE GLOBALIZATION TRENDS

The performance of firms can be affected by a number of external shocks or changes that are beyond the control of firms but that affect dramatically their competitiveness. Three influences include:

Changes in market demand; Disruptive technologies; Uncertainties relating to globalization process more generally

CONCLUSION

To sum up, firms globalize with different motives. They pursue different strategic paths to suit environmental aspects.

For firms to remain sustainable in the global front, it must improve its organization and managerial capability to the extent that it can meet demand from extending physical capacity.