Page 53 - E2 Integrated Workbook STUDENT 2018

The global business environment

Globalisation

4.1 The impact of globalisation on strategy

A major challenge for business growth will be the ability to deal effectively with the
demands of a global economy. As global competition becomes increasingly evident,
organisations must choose the geographical boundaries in which they are going to
operate, for example retain a strong domestic force, or at the other extreme, become
a global player. In most industries organisations can no longer afford to formulate
and implement strategies in response to just local conditions; they must be willing to
adapt to the conditions of a ‘borderless world’.

THINK GLOBAL, ACT LOCAL

4.2 Factors which have influenced globalisation include:

 the drive by multinational companies to seek new markets as domestic markets
become saturated

 the deregulation and privatisation of industries

 liberalisation of trade opening up new opportunities in emerging markets

 lower production costs in developing countries

 development in communications networks, transportation technologies and
broadband networks

 availability of global financing.

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