Guest Post by Hilary Smith
You may also find more of her writing at SmartVirtualPhoneNumber.com.
When we first think about IKEA, H&M, Shell and other large corporations like these, what do they all have in common? Internationalization.
When growing up, this word was pretty big, but now that we have the internet, the way we do business has been completely redefined, and had enabled nearly everyone with a great product or service to sell it on a global level.
Why is globalization being discussed so much today? It might be simply due to the fact that it has a lot to offer. In addition to the potential for growth, many businesses take themselves to a global level for the first-mover advantage, which is essentially is being the first to get into a specific market and gain all the benefits from being the first.
Let’s take a closer look into some of the other significant benefits of globalization:
The possibility for sales in more countries increases drastically because it’s now feasible to send the product to those countries. Logistically, it didn’t make sense for a small-company in Vancouver to send its products to Chile. It just cost too much to do it. But a rapidly globalizing market now has the freedom to exchange goods at will, because the demand is there. Many archaic travel restrictions have been removed, allowing people to travel and become acclimated to different cultures.
Furthermore, these ever-expanding markets of our day have significantly helped countries to raise capital in terms of foreign domestic investments. And as a result, the economy of that country improves.
Small companies handcuffed by high costs for materials now have cheaper options available to them, as they can source needed raw materials, supplies and services locally. This saves businesses money, and allows them to appropriate those funds for different purposes, like hiring new employees, or expanding their company to reach different areas.
Look at it from the opposite perspective: Company A can now offer their product to Company B at a lower rate than Company B is used to. Increased sales allows the new provider to allocate their funds differently. Both of the companies, in this example, win.
Quicker, more accessible transportation means that products get to where they need to be in record time, leading to increased consumer satisfaction and money saved. It also means that companies can offer their product to newer markets more reliably, boosting sales at a fraction of the cost it would have just a few years before.
All this money saved leads to more employment opportunities, and that leads to increased demand for newer, more expensive products.
Think about when you landed your first job. What did you do when you got that first paycheck? You probably went out and bought something. An increase in employment leads to an increase in sales, creating an economic stimulus effect that benefits all parties: the employer, the employee, and the company who is selling the employee that new pair of sunglasses.
The Information Age
The rise in the popularity of the internet has boosted the amount of information that is more easily accessible. Research inevitably saves businesses money because it finds alternative, cheaper ways to spend money, resulting in–you guessed it– more ways to allocate funds to increase business.
Technology and the internet lets businesses advertise in different ways than they had before, and it lets the communicate to potential customers like never before.