Introduction to globalisation

According to the (2016) currently, most companies are now investing away from domestic markets. Operating in foreign countries attracts low cost, high brand awareness, variable exchange rates, protectionist tariffs, trade barriers among others.

Due to the advent of the internet, the world has become a small place and more and more companies are getting into the international space. Following this increase, international marketing environment need to be carefully studied to minimize risks associated with expanding and increase gains.

Business decision makers considering getting into the international markets ought to understand the international environment, identify specific market to get in, strategies of entry, decide if going global will increase volumes and by how much, determine how promotion will be carried out and restructuring in the organization structure to include international department.

In the recent past, formation of trade blocks such as COMESA, EAC and SADC has promoted development of globalization immensely.


Factors to consider when going global

International trade system is set of rules governing entry and exit of offerings between countries. Such parameters include tariffs, quotas and other non-tariff barriers that may affect the business in international economies (Investopedia, 2016).

  • Tariff – is a duty or tax that must be paid by the importer depending on the class of the product imported. This levy varies from country to country and it is meant to protect local businesses and generate revenue for the country.
  • Quota – is a limit or a fixed number/amount that a particular importer can bring into the country. In most cases they are put in place to avoid dumping, protect local businesses and employment.
  • Embargo – is an official ban on trade (imports) on particular products.
  • Exchange control – is a government limitation on the movement of foreign currency between countries.
  • Non-tariff – is a limitation that has no monetary value on the imports such as product standards and features.

Economic environment focuses on concerns associated with the industrial structure of the host country. For example, host countries that produce and export subsistence products may not be good markets for some consumer goods as they are excess supply within the country.

Political environment concerns regulations and attitudes by the host government. More specifically, decision maker will look into attitude towards international buying, political stability and monetary regulations for the host country.

Cultural environment on the other hand looks at cultural differences that may occur in the international market. Marketing of offerings in the host country should be based on the culture to avoid ineffectiveness of the advertisement or product promotion.


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