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Impact Of Globalization On Business Strategies

Globalization is a process of growing interdependence between people of all nations. A buzzword of the 21st century, the term "globalization" acquired considerable force during the 1990s. The phenomenon of globalization has captured world attention in many spheres the information superhighways; international trade; telecommunication; and the Internet. This research deals with �the impacts of globalization on business strategies� and I have covered globalization and business strategies in ancient period.


The word globalization evolved from the word globe which is derived from the middle Latin French word Globus which is in use since 15th century which means a spherical representation of earth. Globalization is nothing but a tool. The word globalization is in use since 1930. Globalization is nothing but an act or process or state of being globalized.

During 1900�s there was a need of a tool in order to establish a free market by which a country can sell and buy anything from any countries without any restriction for instance ASUS laptop which is a product manufactured in china by a Chinese company a person in India can buy it without any difficulties only because of globalization. best e.g. during 1990 before globalization happened in India a person has to pay 200 percentage of import duty for buying a reebok shoe which resulted with grey market and black market these are the modes by which a person smuggles goods of other country illegally in order to avoid import duty and other regulations in order to prevent this and to adopt the policy of globalization � economic liberalisation � was initiated in India by former prime minister P.V. Narashima Rao and by former prime minister and finance minister Dr. Manmohan singh in the year 1991 to make India a fully globally economic state. So that a foreign country can make use of natural resources or man power or technology in which it lacks and we can make use of other country�s natural resources or technology in which India lacks.

Generally, globalization means amalgamation of all the countries economy into a single economy so that anyone can travel to any country to sell or buy product, provide services, start a business etc best example is BPO which has flourished only because of globalization. globalization generally comprises of trade or good and services, business, capital, labor, culture, language, technology etc. internet is one of the important factor for driving globalization. Cyberspace came into play and it enhanced usage of internet which led a person to do a business via virtual space. So, a physical presence of a person is not required to do a business and globalization flourished because of cyberspace.


Commerce is an activity of buying and selling of goods or commodities especially in a large scale and it also involves transportation from one place to another. It is nothing but a dealing between people. The word commerce is derived from the Latin word �commercium� and the word commerce is in use since 1537. commerce is in existence since the start of human civilization and since the usage of barter system ( buying and selling goods for goods before the creation of currencies ). Commerce is nothing but all the transaction of a single product in an economy and transaction includes both the purchase and sale of that product for e.g. If a person buys or sells a mango is called transaction whereas commerce is all the transaction related to both the sale and purchase of mango in an economy. Generally, commerce comes only under the purview of distribution process of the goods and services and it doesn�t deal with the manufacturing and production process. Commerce is the backbone of industry and business because it helps an industry or business entity to eliminate hindrance of person, place, time, finance, risks and information.


Business is nothing but a commercial activity or mercantile activity done by a person to make money and to live by the way of manufacturing or producing or selling or buying goods and services. the word business is derived from middle English word �bisynesse� and the word business is in use since 14th century. E-BUSINESS is nothing but a business done via internet or intranet or extranet or web or some combination of these. generally, e-business means doing business via electronic means which not only deals with exchange of goods and services but also deals with other business activities such as accounting, finance, supply chain management, human resource management, customer relationship management etc. e-business scope is wider in nature and even e-business comes under the purview of e-commerce.

Globalization And Business Strategies In Ancient Period:

India is known for its natural resources. Textile and spices are the main products which were exported by India. India was the one among those developed nation during ancient period.

During ancient period trade and commerce flourished in India during CHOLA DYNASTY (சொழ அரசர்குலம்). CHOLA DYNASTY is known for their trade and commerce, navy and army strength and especially their judicial system and their national and international business strategies. Even they framed laws for collecting and governing taxes. They collected land and trade taxes for collecting taxes they created a council which has members who will be appointed as the head of the village (கிராமம் - gramam) and town (நகரம் - nagaram) to collect taxes.

When it comes to business strategies chola rulers created main cities or head cities (தலை நகரம் � thalai nagaram) where big markets were built and all the products will be sold. The three main cities of chola empire are Kanchipuram, Madurai And Chidhambaram. And they segregated each and every city based on the natural resources for instance Kanchipuram for silk, Thuthukudi for salt. And they opened market in those cities from where people can buy things. When it comes to international trade, they travelled almost every part of the world to do trade. They are known for their navy strength.

Each and every empire were afraid of strong CHOLA�s navy troops and they conquered most of the places in south east Asia. They trade with African empires, French empires, Chinese empires etc. especially they had a good trade relationship with Chinese king � SONG CHAO � and French king �ROBERT� whose resemblance were sculpted in THANJAVUR BIG TEMPLE.

For instance, black rice (கருப்பு கவுனி � karuppu kavani) which origin is still a question china claims that black rice paddy has originated from it. Whichever place be its origin it has existed for ages only because of trade and it is getting extinct in India. In order to maintain trade with Chinese dynasties chola kings captured all the island in the sea trade routes and they appointed puppet kings to those island e.g., Khmer Dynasty King � Suriyavarman who built ANGKOR WAT temple ( largest temple in the world ) in Cambodia was a puppet king appointed by CHOLA king to rule Cambodia. This how the trade and commerce flourished during ancient period and this shows how globalization played a major role during those ancient period.

Factors Responsible For Globalization

  • Liberalisation Policies

    many countries adopted the policies of liberalization which resulted with the removal of restriction on international trade and commerce. It paved the way for globalization
  • Technological Revolution

    new technologies were invented and were used which made transportation and communication easy as a result of it as a result of it times and space barriers were removed and trade and commerce became easy as the cost of transportation and communication became low.
  • New Forms Of Industrial Organisation

    increase in new technologies and its usage resulted with usage of new techniques by industries and fall of production cost because of the advancement of technologies made industries to focus on customer relationship. Then a confusion arose among the firms and industries i.e. whether to invest in FDI � Foreign Direct Investment or foreign trade in order to participate in international sector.
  • Countries Adopted

    Then many countries started to adopt Liberalization and Globalization which resulted with sudden economic growth of those countries which set an example to other countries and so other countries also started to globalize their economies
  • International

    Several international institutions such as WTO, IMF, world bank and other UN agencies have created an international environment in which globalization will flourish.
  • Export Promotion

    reduction in duties , tariffs, reduced restrictions and procedures in trade helped in flourishing globalization.
  • Freedom To Repatriation:

    In general repatriate means sending back refugees back to their own country but according to business repatriation means converting other country's currencies into our country's currency for instance a Indian is doing business in us, then he will convert the dollars he earned into Indian currencies.
  • Encouraging Open Competition:

    so any company from our country can compete with other country's company vice versa.

Advantages Of Globalization:

  • Increase In Foreign

    by means of joint ventures, mergers, franchise, turn key projects etc. E.g., BAJAJ AUTO owns 48% share of KTM.
  • Reduction In Brain Drain

    It is nothing but educated brainy citizens will migrate to other countries to work which can be reduced by the means of globalization as result of it a country doesn�t have to lose its most educated and talented workers to other countries. e.g., Indian citizens are migrating to USA to work in NASA. Globalization increases employment opportunities in the home country and utilize man power efficiently.
  • Expansion Of Market

    Globalization operation of business will move from local to national and national to international market. E.g., TATA INDUSTRIES, APPLE in India etc.
  • Technological Development

    Increase in usage and invention of new technologies made trade and commerce easy and so under developed and developing countries depended on new advanced technologies used by developing countries by getting royalty or purchase of technology or by technological collaboration. It was achieved by underdeveloped and developing countries by the means of globalization.

  • Loss Of Domestic Units

    As a result of globalization foreign companies and industries entered domestic market which resulted with decline in demand of domestic products which in turn vanishes the domestic business E.g., KALIMARK is a cold beverage company which lost its brand value because foreign companies like COCA COLA and PEPSI entered the domestic market which made KALIMARK lose its customers.
  • Increase In Inequalities

    The under developed and developing countries were affected because of inequalities and preferences by developed countries. E.g., UKRAINE gas line issue � Russia cut off the gas line to Ukraine (developing country) for its debts and decided to construct international sea gas pipeline to GERMANY and recently PRESIDENT JOE BIDEN waived sanctions against company constructing the gas pipelines between RUSSIA and GERMANY This shows the inequalities and it widens gap between rich and poor.
  • Exploitation Of Natural Resources

    The developing and under developed countries natural resources were exploited by developed nation for instance many foriegn manufacturing companies are working in India and the products made in those companies are exported to other nations. E.g., cocacola industries in India exports the product to Thailand, Singapore etc. here only our water resource is being used.
  • Dominance Of Foreign Institution

    As result of globalization economic Power shifts to international organizations which is a threat to national sovereignty because everything is decided and controlled by them.

Business Strategies:

A strategy is always used by a company to achieve its goals. Strategies are nothing but an action or a process which helps a person to achieve his goal in ease. In order to achieve an objective a business entity or a firm uses strategies. For instance, advertisement is a strategy to establish a communication between a company and consumer or a strategy used to introduce a product in a market.

Impact Of Globalization On Business Strategies:

Generally, impacts can be classified into positive impact and negative impact.

Positive Impact:

  • Rebranding:

    It is a strategy followed by most of the MNC�S all around the world. If a product produced by the company fails in a country means it will be sold with different name or with different brand name. E.g., TATA NANO car was a failure in India so the company made some upgrade to the car and introduced the car as a smart car in INDONESIA and the company also announced TATA NANO will come back to India after breaking records in other countries.
  • Product And Pricing:

    product and its price is altered in accordance with the international market. Product will be customized based on a country�s need. E.g., SONY PlayStation smoothness and weight of the product differs from country to country. Japan�s PlayStation is heavier and it will be smooth at the same time china made PlayStation is weightless and makes sound while playing. When it comes to pricing based on the countries economy standard it will be fixed.
  • Market Conversion:

    after globalization many of the companies started to convert from domestic to international market well established companies started to enter international market. E.g., TATA STEEL INDUSTRIES, TCS, INFOSYS, HCL etc.
  • Production cost:
    Globalization helps a company to reduce its production cost. If a foreign company opens a manufacturing industry in a country with rich natural resources and man power the production cost of the product manufactured in that unit will be less because the foreign company can buy raw materials at low cost and labor cost will be low. E.g., DELL manufacturing unit in India , APPLE manufacturing unit etc.
  • Product Life:

    if a product is outdated in a country and it is declined by the domestic market that same market can be sold in other countries e.g., during this bs4 issue the manufactured vehicles were exported to other countries.

Negative Impact:

  • Miss Use Of Natural Resources Of Other Country:

    Generally, a foreign company will focus on cost reduction Foreign countries introduced genetically modified crops so that people in India can use those crops and foreign countries can use of original pure organic crops cultivated in India. Recently on January -01-2021 India proposed crops which were imported to India should poses non GM ( genetically modified ) certificate which was opposed by US, AUSTRALIA, BRAZIL and other countries at WTO.
  • Loss To Domestic Companies:

    Due to globalization domestic companies started to enter into domestic market which resulted with loss to domestic companies. E.g., KALIMARK faced a huge loss because of COCA COLA and PEPSI.
  • Deceiving Foreign Companies:

    company will promise one thing to a country and will exploit the resources and it will never giveback anything in return.
  • Inequalities:

    Inequalities are still prevailing in this world. Developed countries are still treating under developed countries with inequality. E.g., UKRAINE gas line issue � Russia cut off the gas line to Ukraine (developing country) for its debt and decided to construct international sea gas pipeline to GERMANY and recently PRESIDENT JOE BIDEN waived sanctions against company constructing the gas pipelines between RUSSIA and GERMANY. This shows the inequalities and it widens gap between rich and poor.

  • Technology Transfer:

    when it comes to technology transfer globalization plays a major role. The countries which lacks in technology will do technology transfer with other countries. In this patent plays a major role. E.g., India has to depend on other countries for military technologies like jet, tankers etc. those days. The country will sell the products but it will not transfer license for manufacturing the same in India.
  • Environmental Issues:

    the foreign companies not only exploit the natural resources but also creates environmental pollution issues. E.g., COCA COLA contaminated water and polluted the environment via south Indian plant from which beverages were exported to foreign countries. already water crisis is prevailing in India
Still few theorists, professors and economist believe that globalization is a failure why because few countries had reduced duty only for few products which shows the selfish activity of a country and we can clearly witness and understand that only powerful nations i.e., economically well established nation is ruling the world by not letting developing countries to become a developed country and still India is not a truly a globally economic state. Globalization is a tool which can be used in both positive and negative aspects and only way to prevent the usage of globalization in a negative aspect is by bringing awareness regarding globalization and its impacts among the citizens of India.

  1. Vinay Kumar Malhotra, International Relations (4TH ed. 2016). Saylor Academy
  2. Fundamentals Of Global Strategy, 2012,
  3. Norwich University Online, International Business Strategies in a Globalizing World, 2017, International Business Strategies in a Globalizing World | Norwich University Online
  5. Pankaj Ghemawat, Globalization: The Strategy of Differences, (2003), Globalization: The Strategy of Differences - HBS Working Knowledge
  6. Prof. Richard Lynch, International and Global Strategy, (2014), Global Strategy - Professor Richard Lynch (
  7. Impact of Globalization on International Business Strategy, Impact of Globalization on International Business Strategy |
  8. Aashish Pahwa, Business Strategies, 2021, What Is Business Strategy? - Components, Levels, & Examples | Feedough

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