Impact of globalization on the American Companies

The Impact of Globalization on American Firms

The way American firms operate has undergone a radical change as a result of globalization. The nation’s markets have expanded, and as a result, many businesses have expanded their production capacities. Companies have increased market share as a result of the growth in the local market. Companies are looking for ways to stay up with this growing local competition in order to maintain a competitive edge (Antráas et al., 2016). The need to stay competitive has forced enterprises to adopt new technologies. Information outsourcing is also becoming more prevalent in American businesses. . Companies seek to reduce their cost of production in the globalized world through outsourcing of foreign labor. Companies have also changed their operations regarding quick responses, technological adaptation and rapid production of products for sale. All these factors have culminated into a reduction in the prices that these firms charge in the market (YouTube, 2014). Simply put, the American companies are able to produce and carry out their operations at a less cost, sell their products cheaply and hence increase the market share.

Impact of the Strategies in the World

Perhaps, exchange in technology has been a major factor that has affected organizations worldwide. New technologies are embraced by international firms in attempts to exploit new opportunities and produce quality products. The strategies have also made the other firms to reduce their cost of production and increase sales. There is also a rise in the multinational corporations. New markets have been created overseas, and this significantly boosts the economy of the nation. This idea also has increased the real-time communication abilities among international organizations allowing access to the greater international corporation (Antraĭas et al., 2016). The world has simply turned into a small village, and companies strive to meet the market expectations. These strategies have also seen the scale of product differentiate increase in the world.

Benefits of Globalization to Organizations and Customers

American organizations have significantly benefited from globalization. Emerging markets in the developing countries have increased sales and organization get access to cross-cultural management (Korgen et al., 2015). Foreign trade and competition have improved causing firms to make more profits. Globalization as allows companies to get access to cheap labor and thus helped to cut down the cost of production. For this reason, the prices of the commodities have reduced and thus benefited the customers. The cheap products have raised the standard of living of citizens. Through globalization, customers have a large multitude of choice of products in the market due to differentiation. Besides, there is the production of quality products at low prices due to high competition (YouTube, 2014). The customers are also able to get the commodities in a more efficient and quick manner.

Adverse Effects of Globalization to Organization and Customers

Global market leads to hidden costs such as shipping expenses and time delays which affects companies. Furthermore, the concept of the open economy which is promoted in the globalized world has adversely affected the local organizations. American organizations face stiff competition from the foreign investors, and this poses a risk of making the local firms run out of business. Globalization is also to be blamed for increased unemployment which affects the consumer purchasing power. Notably, job insecurity is a worry to many consumers because firms outsource for cheap labor from other countries (Korgen et al., 2015). More strikingly, many consumers in the globalized world prefer the fast foods to home-cooked meals. Fats foods are cheap and quick to access. However, these foods are rich in sugars and unsaturated fats and hence resulted in a critical global epidemic in terms of obesity, diabetes and other chronic diseases.

Conclusion

Globalization has become a leading aspect of the business, and it affects the economy, the business life and the society as a whole. The rapid changes in technology and increased competition, as well as information sharing, are significant changes in the economy. It has opened new markets expanding the market share, and the scale of production has increased. Customers also get cheap and quality products. However, a major drawback is the loss of employment for the local workers.

References

Antráas, P., de Gortari, A., & Itskhoki, O. (2016). Globalization, Inequality and Welfare. Cambridge, Mass.: National Bureau of Economic Research.

Korgen K.O., Korgen J.O. and Giraffe V. (2015). Social Issues in the Workplace. (2nd ed). (Electronic Version). Retrieved on 13 December, 2017 from https://content.ashaford.edu/

YouTube. (2014). Globalization easily explained explainity. Retrieved on 13 December, 2017 from https://www.youtube.com/watch?v=QXN_jl2abEE&feature=youtu.be