Globalization is a process describing the increased interaction and integration of people, organizations as well as the government which is necessitated by economic, social and political factors (Maranga et al., 2017). Advancement of the transport sector and information technology have played a crucial role in accelerating the growth of global economies and cultural interdependence. However, for a business organization to be able to expand and venture into international markets, they must initiate two key strategies which are global and multinational strategies. Global strategy views the whole world as a single market, hence, businesses which adopt this approach will establish their presence in various parts of the world for efficient operations. On the other hand, a multinational strategy is usually adopted by a business organization which has expanded its operations into various global markets where it offers different products for each of its markets. According to Maranga et al., (2017) business organizations must analyze political, economic, social technology and legal issues concerning international markets against their strengths before adopting a globalization strategy.
International firms are usually faced with various challenges while operating at global markets. The major challenges include; different regulatory framework adopted by various countries which hinders them from gaining through international integration, interest rate risk, illegal activities especially hacking and terrorism as a result of technology and economic inequalities as globalization is mostly concentrated among developed countries. Other challenges facing globalization are differences in minimum wage rate among countries, cultural differences as well as political instability in some countries which poses a major challenge to international trade interaction (Maranga et al., 2017).
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Nevertheless, globalization has availed various business opportunities. They include access to larger markets internationally, availability of investment capital and innovation ideas which helps in expanding one’s business and development of standards and sensible policies to regulate global trade hence facilitating free trade (Maranga et al., 2017). Also, globalization has increased access to communication networks across the globe, access to modern advanced technology to run business and also it has allowed product diversification which helps in managing both financial and business risks associated with enterprise operations.
Reference
Maranga, D., Kennedy, M, Madison, D., & Denice, R. (2017). Globalization and Its Implications for Global Leadership.
