Internal Assignment April 2023 Exam.

: International Business

Answer for Question 1:

Introduction:
Globalization is a business method in which understanding, ideas, goods, and records spread
globally. Furthermore, this term is meant to be used in an economical business context that
means the merging of separate, distinct, and isolated national markets into a large global
marketplace through free waft services, free trade values, and supporting the resources in
business. Moreover, globalization is also using the convergence of economic and cultural
systems to promote the necessary changes within the business. This case study will discover
significance of globalization in developing ideas, values, and cultures. Business development
and specialization will be mentioned because of globalization. The advanced development of
the era could be considered to improve the changes related to globalization.

Concepts and application:

Definition of Globalization- Globalisation can be defined as an assimilation of different

countries through the exchange of ideas, financial resources, information, goods, and
resources.

Globalization helps to support higher customer offerings to the people globally, which
increases the price of gross domestic products inside the business. Moreover, it can enhance
the unemployment business rate and increase the work value of better-skilled inside the lower
charge values. Globalization additionally enables to aid the of infrastructures and monetary
growth in business. The asset and people flow smoothly in business to integrate the
investments and change services, which includes the commodities flow and obstacles
hindering business.

How globalization helps in the mixing of cultures, values, and ideas-

Similarly, globalization is specialized in the financial system as the values of products and
services drive aggressive advantages. Globalization regulations help to promote international
cooperation, open borders, and free alternate offerings to pressure economic globalization
within the marketplace. Furthermore, globalization helps to enable enterprises to get
admission to attract the high demand for raw materials and work on the services and excellent
best within the business.
Advantage of globalization-

Globalisation is driven by advancement and changes in the world economy. Globalisation has
changed the whole world socially, economically, and culturally and has brought tremendous
socio-economic change and internationalisation of business worldwide.

Globalisation has both positive and negative impact on the economy of country.

The advantages of globalization can be understood by four aspects of globalisation,

1. International Trade:
With globalization, trade restrictions/barriers imposed by several countries have been
relaxed to a great extent which has increased the business transactions between
countries.
2. Employment Opportunities:
Because of globalization, many multinational organisations (MNCs) have invested
capital in different countries and have expanded their reach globally by establishing
new branches and subsidiaries in different countries, hence increased the employment
opportunities.
3. Exchange of Technologies:
Another advantage of globalisation, exchanges of latest and advanced technologies by
developed nations to developing nations, which made the production methods of
developing countries more effective and efficient.
4. Financial Integration:
Financial integration means that the global economies are closely linked and leading
to a free flow of capital and financial resources within countries globally.

Similarly, the globalization era is the competitive advantage for corporations that increase the
improvement of organizations. It supports better business or patron services globally by
enhancing the rate of GDP. The country's government promotes globalization to aid us in
financial growth, advancement, and competitive infrastructures. Conversely, globalization
supports home changes in businesses to meet consumers' or boom overseas clients' demands
to develop the usual boom. The best examples of globalized organizations include
McDonald's, Amazon, and Ford Motor to drive dependable customers because they affect the
first-class changes associated with globalization within the market.
Another common example of globalisation can be seen in Business Process Outsourcing
(BPO) and Knowledge Process Outsourcing (KPO) that is being used to advantage national
differences in production costs.

Disadvantage of globalization-

Despite the aggressive advantage, globalization also reflects a darker side where growth in
the inequality issues in the world through increases in poverty results and specialization. The
favours of globalization can be decreasing the slow developing country and unparalleled
growth because of the excessive investment had to undertake the brand-new generation and
help.

Negative Consequences of Globalisation:

1. Unparalleled economic growth:

The major negative consequences of globalisation witnessed by the world during the 20th
century is of unparalleled economic growth. During this period, the GDP of countries
increased almost up to five times, but the increase was not steady. Most of the expansion
occurred during the latter half century due to rapid trade expansion and financial
liberalisation.

2. International inequality:

International inequality has become a major issue during the 20th century. According to
World Bank, inequality is defined as “the disparity of income and standard of living among
nations and their citizens.”

The disparity was seen between the rich and poor nations; richer nations were getting richer,
while the poorer nations were getting poorer.

3. Deteriorating workers’ interest in advanced nations:

As a result of high competition and due to the free movement of goods and services, workers
from high-wage jobs have been displaced as the organisation shifted their interest in towards
low cost and high profit processes which provide more opportunities to labour intensive
nations at the cost of Deteriorating workers’ interest in advanced nations.

The common example is outsourcing, which has seemingly depleted employment

opportunities in advanced countries. Organisations prefer to outsource work to developing
countries because of the availability of highly skilled labour at a very low wage in developing
countries.

4. Financial crises:

The global crisis of the 1990s affected the economies of Mexico, Thailand, Indonesia, Korea,
Russia, and Brazil. Some of Economists consider the globalisation responsible for this crisis.

Some countries have maintained an impressive economic growth but are not fully prepared
for sudden downturn faced by the international market.

In addition, some malpractices and mismanagement at the international level can also
attribute to financial crisis.

5. Loss of National Sovereignty:

The globalisation is sometimes result in loss of national sovereignty. Due to the integration of
world economy, countries are losing their autonomy in terms of economy.

To provide relaxation and comply with international trade policies, countries have to
compromise with their domestic objectives and follow conventions proposed by international
institutions, such as WTO and International Monetary Fund (IMF). The diminishing tariff and
non-tariff trade barriers to promote free flow of goods and services are the common
examples. These barriers were often imposed by countries to protect their domestic
industries. However, international conventions such as UNCTAD, Convention on
International Sale of Goods (CISG), and other obligations to remove trade barriers affect the
autonomy of some nations.

Conclusion:

Therefore, globalization has been critically incorporated and mentioned within the above
section to discover the adjustments in modern-day business. The present-day marketplace
trend has been at once updated or influenced due to globalization. Moreover, globalization
has enabled expensive natural assets to enhance business values worldwide. The economic
development has been improved due to using the stock's business changes, worldwide scale,
and reliable human rights to defend customers and employees. To guide the destiny boom,
globalization has related to the fuelling economic globalization, mobile communications, and
blockchain to design better effectors of business values.
Answer for Question 2:

Introduction:
Global sourcing is the practice of sourcing from the global market for goods and services
across geopolitical boundaries.
The main aim of Global sourcing often to exploit the global efficiencies in the delivery of a
product or service. These efficiencies are in terms of low-cost skilled labour, low-cost raw
material, new technology, extreme international competition, and other economic factors like
tax breaks and low trade tariffs.
Global sourcing initiatives and programs form an integral part of the strategic sourcing plans
and procurement strategies of many multinational companies.
Global outsourcing based on international marketing is intermediate to the suppliers and
product demand that propagated the firm's performance development in business. From the
competitive analysis, it argued that international and lean focus on the buyer is beneficial,
especially for providers and buyer demand. The alternative approach and internal outsourcing
evaluate the organization's performances that depend on the competitive factors, which
include the size and employees of organizations. In this study, the reliable facts about
worldwide sourcing, its limitations, and its advantages will be discussed, and the importance
of global outsourcing and recommendations shall also be elaborated.

Concepts and application:

The global outsourcing shows the competitive interest in the organization's sustainability
stage to mean customers' interest. It promotes the last product components to simplify all
transactions and moves that want to be addressed in marketable products. Global sourcing
involves the production operations set up in various countries to serve the marketplace
analysis or buying the components to pressure the modifications inside the business.
International and worldwide sourcing attract reliable input and output based totally on the
national economy in business.

Major Reasons of doing Global Sourcing for International Business:

Global Sourcing is done as part of the buying process for getting cheap materials and
products from other countries outside the home country for availing special benefits in terms
of cost or quality.
Lower Cost:

To get the economic advantages, certain tasks which are cheaper in other countries can be
outsourced meeting the quality standard while choosing global supplies of labour.

Accessibility of Raw Materials:

If the raw material available for the manufacturing is available in other countries, it is good to
depend on global sourcing for the supply. Possibilities for economic factors also need to be
considered while contacting global sources for the requirement of the materials.

Reciprocal Service:

The global sourcing can be done on mutually agreeable terms, means that a seller of service
could be the purchaser of another service.

Competitive edge:

Global Sourcing can bring a competitive edge to international businesses and help elevate
them in the market.

Advantages of global sourcing:

The global sourcing of goods and services has advantages as well as disadvantages that can
go beyond low cost. The several advantages of global sourcing, beyond low cost are learning
to perform business in a potential market, tapping into skills or resources unavailable
domestically, developing alternate supplier/vendor sources to stimulate competition, and
increasing total supply capacity.

One of the benefits is more manufacturing capacity that drives the possible benefits and
regulates the product's decreased fee to enhance the manufacturing ability. The money's
better fee is using the reviews and reliable global sourcing or business partners to get quality
suppliers' services. Better satisfactory merchandise can gain better international experiences
to increase a robust community and power the excellent values to develop trust with the local
business partners. The overseas suppliers are driving the marketplace emergence to expand
the brand-new cutting side and brand new to regulate the business innovations and extra
rivalry changes.

Critical evaluation, limitation, and challenges of world sourcing:

Despite of the various advantages acquired from global sourcing, some key disadvantages of
global sourcing can include language, financial instability, cultural differences, and
regulatory and legal issues affecting currency fluctuations, hidden costs associated with
different cultures and time zones, exposure to financial and political risks in countries with
(often) emerging economies, increased risk of the loss of intellectual property, and increased
monitoring costs relative to domestic supply. Furthermore, the regulatory and felony
problems created diligence within the place of business that affected the satisfaction of
suppliers' work in business. Exchange and currency price versions also evolved challenging
conditions to include international sourcing in business.

Recommendation for global sourcing:

Global methods and sourcing play a better function in driving global business aid.
Furthermore, setting up a firm date with the stakeholder and providers drives better
information in their building agreement with and capability and drives better business
expectation putting. It's recommended that a sourcing method be established to improve
enterprise relations to assess higher negotiation terms and potential modifications inside the
business. But it's far quite vital to power better services, goods, and logistics costs to manage
the business challenges in the present-day time.

Common examples of globally sourced products or services include labour-intensive

manufactured products produced using low-cost Chinese labour, call centres staffed with
low-cost English speaking workers in the Philippines and India , and IT work performed by
low-cost programmers in India and Pakistan and Eastern Europe.

Conclusion:

To conclude, the global resourcing has advanced significantly to lower product prices and
access opportunities related to new business in a potential market. Furthermore, the
aggressive challenges and benefits advanced due to global sourcing include the sourcing
strategy, supplier development, enhanced skills and managing business transportation risks.
The organisation's performance has been correctly navigated thru strategy or techniques of
worldwide sourcing. However, the evaluation and monitoring of business performances have
performed a crucial function in assessing the quality of services and goods in the business.
Suppliers' performances have been compiled or more advantageous with an analysis of
company expectations and business standards.
Answer for Question 3a:

Introduction:
The emerging marketplace in business refers to an economy that experiences considerable
economic growth and possesses some, but not all, characteristics of a developed economy.
The emerging markets are of the economies which are under transition from developing
phase to developed phase, means the nations whose economy is growing to become more
advanced, but are not yet classified as a developed country. Some common characteristics of
emerging markets which makes the emerging markets favourable are Market volatility,
Growth and investment potential, High rates of economic growth and Income per capita.

Moreover, the emerging market is transitioning the section to expand better adjustments in
business and mitigate the challenges to meet the business objective.

Concepts and application:

Why do companies such as Gillette target emerging markets-

The companies such as Gillette target emerging markets because the developed markets are
already saturated and the potential for further growth is not appropriate to sustain. To sustain
the consistent growth is only possible through the product diversification such as in case of
Gillette which moved into lines such as home permanents, disposable lighters, ballpoint pens
and batteries and expand its business operation in developing countries where the presence of
low-quality products pave way for the new and high-quality products sold by the
multinationals. That is the reason why the companies like Gillette choose to expand in
emerging markets, despite its recent lousy experience in developing countries and the former
Soviet bloc.

Gillette’s Goal in emerging market-

The main focus of Gillette has been to provide the best health and skincare-related
solutions. The main target was the Low-pay clientele in emerging market, who couldn’t
afford Gillette’s exorbitant cost, resorted to the outmoded, but still widely used, two-edged
razor shaving equipment.
The Gillette’s target marketplace helps to determine the development and transition section of
the company with innovative and low-cost solutions to serve the target market. The targeting
strategy of this business is aggressively affecting the developing market. At the end of the
20th century, Gillette analysed the competitive increase in the global market corporation. The
product availability of this business is in over 200 countries, and the current number of
working employees in this business is 44,000 and with the right offering combined with a
strategically chosen market, a company can expect to grow their revenue at a steady rate in
emerging market.

Market Breakout strategy used by Gillette-

Gillette (a P&G company) has successfully implemented a razor-and-blades strategy means

reduce the cost of razors by product development. Gillette has invested in an installed base by
selling the razor handles at low prices, and then it has sold the razor blades at high prices to
justify the prior investment. In this manner the users or customers of this company affected
the business growth and sales in business.

Gillette’s top selling brand Mach3 and Fusion razors were too expensive for many consumers
in India and other emerging and developing markets and the needs of consumers in rural
India and at the bottom of the pyramid remained a lucrative, but unaddressed, opportunity.

In India, a brand-named Super-Max held the lead in double-edged blades, which cost 1.5 to 2
INR. Competitors like Gillette had no choice but to cut their prices.

Gillette conducted a year of intensive research over the Indian men’s purchases and usage of
razors. Gillette done reverse engineering by fixing a price tag for the product before starting
product reengineering. On completion of intensive research, Gillette launched the product
“Gillette Guard”, an affordable price razor for 15 INR and blades for 5 INR. This low-weight,
plastic, disposable razor offered a close shave minus the frequent cuts from the quick-rusting,
double-edged products offered by competitors.

And very soon, the brand Gillette Guard rapidly captured 50 percent of the Indian shaving
market, despite being higher priced than Super-Max, demonstrating that affordability
balances low cost and product performance. The Gillette Guard was the company’s best
option for penetrating India’s large rural emerging market.

Conclusion:
Gillette holding a strong market depth in safety razor business and need to diversify its
product line and to target other emerging markets. Acquisition of the company Astra was a
master stroke in its expansion. Therefore, no matter of the competitive challenges, innovative
technology has been recommended for razor business to apply constant growth to extract the
potential benefit from emerging economy. The information and IoT-like generation help to
support the razor market to announce digital services to global consumers. With the help of
progressive technology and global innovation, this company has been measuring workers'
performances and getting into a new emerging market such as Argentina.

Furthermore, product diversification is one of the strategies used by this company to drive
permanent adjustments in products consisting of batteries, ballpoint, and disposable razors.
The company's target market was different countries, including India, China, Poland, and
Russia. But selecting a suitable market is essential in improving the business demand and
helping the work values in business.
Answer for Question 3b:

Introduction:
The potential for growth in emerging markets comes with its own set of risks and challenges.
Even though, most of the emerging markets have started political, legal, and financial reforms
but still the challenges/dangers remain. Many countries still lack in protection of property
rights, corruption culture still exist, pass laws designed to impede trade, and still have a weak
financial infrastructure. If companies are not aware of these potential challenges, they may
not see the success they hope to in emerging markets.

The rising marketplace of Gillette will face several troubles primarily based on market
development. The aggressive danger for massive businesses consists of excessive debt and
insufficient foreign or currency exchanges.

Concepts and application:

In general, the biggest challenge for companies planning to expand in emerging markets
would be understanding the local culture, market, and expectations. The emerging markets
are so complex, the companies can benefit only if they have detailed plans and products
tailored to a specific market. For this the companies have to first observe consumer habits and
local customs present in a company’s desired market.

The Dangers for Gillette Company of Targeting emerging markets:

The dangers to Gillette on targeting emerging markets include the possibility of the financial
crisis that could affect the sales of the company and could lead to negative sales figures.

For instance, as mentioned in case study, the financial crisis which started in Thailand that
later it spread across Asia and affected the sales of Gillette Company. If an emerging
economy proves to be a bad economy that would result in losing money for the company in
the long run. For instance, Gillette had high sales in Russia before the financial crisis which
made Russia the third largest consumer of company manufactured blades. However, after the
financial crisis struck, Gillette’s Russian sales plummeted 80 per cent in a single month. This
way the product was completely wiped away from the market.

In addition, the investments made by the company also face a setback in their expansion plan.
For instance, Gillette had expansion plans for Russia and Argentina that would worth $64
million which were now at risk due to the financial crisis caused by the slowing down of
these economies. Other than that, the worst danger that the company had to face in the
emerging markets was the immediate fall in share prices (Gillette shares tumbled by 36% in 6
months) that could result in quickly losing of huge money of investors creating fear among
potential investors. As a result, the company had to shut down its 14 factories and lay off
10% of its workforce.

Furthermore, different risks, including political risks, may affect the rising market of
companies along with volatile markets, unstable political situations, and rules carried out by
the authorities on enterprises. The financial dangers may affect the organization's excessive
inflation, raw materials demand, and labour staff to address the adverse modifications in
business increase. Furthermore, the top competition from different groups also is an
aggressive threat to Gillette's business, including Unilever and different companies, added to
the market to affect the customer segment of the industry.

Marketing strategy Suggestion to improve the Gillette goal market-

As per the case study explained above, the Gillette market is about growing a satisfied
customer market through offering low-cost products and easy-to-access services facilities.
The target marketplace of customers can target the age range from 18 to 34 years of
customers to include different professions. Despite the defined target market, it is
recommended that Gillette's marketing mix also can adopt a pull & push marketing strategy
to receive competitive success.

Instead of depending on the wholesalers and sellers, it would be better to reach out to target
customers by own. This can be done by sending marketing agents for door to door selling
where they would keep ahead the additional benefits and gains that the customers could attain
using company products. Also, it is better to display the cutting-edge advantages that the
company product offers to the customers as compared to other products. Thus, the customers
will continue to make demand for company products irrespective of the availability of low
price and low-quality products available in the market.

In addition, the company could apply some levels of push marketing also wherein they could
introduce discounts and additional benefits along with the purchase to initiate the process of
purchase by the customers. This way a mixture of pull and push marketing strategy could
help in maintaining presence in the global market.

Conclusion:
As explained in above case study, it is evident that the potential for growth in emerging
markets comes with its own set of risks and challenges. And same is applicable in case of
Gillette which also have the dangers in terms of possibility of the financial crisis that could
affect the sales of the company and could lead to negative sales figures.

Therefore, be able to hold on its significance in the developing economies is possible through
the application of the mixture of pull and push marketing strategy. The company (Gillette)
will be able to achieve customer preference before other company products. The business will
continue to maintain its stipulated growth levels and high returns can be expected in the long
run.