Globalization and the Value Chain
The ultimate aim of any business is to make a profit. For this to happen, the company must ensure it complies with all the factors of the market. Therefore, the value chain must reflect the goal of the business. Consumers are the central focus in creating an effective value chain. The main aim is to ensure consumer satisfaction with the products in a purchase.
Budgeting
Globalization influences budgeting by ensuring considerations for expansion. While creating budgets, the focus is on the distribution of the products and services at a local level. However, with globalization, businesses aim at expansion beyond their border (Defraigne, 2017). Managers are forced to include expansion measure considering the relevant competitions in their budgets.
Competitive advantage
Globalization provides a competitive advantage to a business. Businesses with greater reach have a more extensive consumer base and trust. Therefore, they can effectively undertake their marketing activities without significant challenges (Lauridsen, 2018). Besides, globalization may turn a business into a monopoly. As a result, marketing managers must focus on creating a strategy that ensures global reach and may ultimately influence budgeting.
Corporate social responsibility
A business has responsibility for the surrounding community. It must protect the welfare off the consumers. Administrators are forced to consider the global outreach of their business before making social responsibility decisions. CSR activities must also have a global outreach based on the product’s reach, which includes other host nations.
Culture
Each nation contains its own culture. As such, for businesses to expand to a new market, the biggest consideration is the community’s culture. Administrators must formulate policies that are not offensive to the host culture. Understanding the host’s culture provides a competitive advantage over newer entrants.
Customer need
Consumer needs are the most crucial aspect of consideration for the success of a business. As such, when entering into newer markets in foreign nations, a company must ensure that the products meet the needs of the consumers (Thompson & Smith, 2017). Production officers must understand the differences between product consumption in the home and host countries.
External resources
Globalization influences the availability of external resources. One important consideration for managers is the availability of raw materials and labor. Therefore, before expansion to newer countries, a business should focus on the availability of resources and the competitive advantage they provide.
Financial
The most important consideration for a business under globalization is the availability of financial services. Financial officers are tasked with selecting the most suitable services available in the market (Gereffi, 2019). Importantly, the opening of borders for trade has increased the number of available financial services provides.
Goals
Each organization has its own goal. However, organizations have to shift their goals and objectives to cover the whole market when considering its expansion abilities into newer markets around the globe. Therefore, strategic planners provide focus on newer markets when creating budgets and resources for production.
Idea generation
The ultimate duty of project managers is t generate and implement newer programs. With the rise of globalization, companies can acquire newer business ideas from the creating of platforms and marketing (Presutti, 2016). Generated ideas must rhyme with the customer needs of the host country. Idea generation methodologies may differ between nations and markets.
Information management
Globalization has forced stringent management measures for business. With the increasing risk of information theft due to advancements in technology, forcing companies to create better security measures (Defraigne, 2017). Besides, public relations managers have to control the spread of information to avoid disinformation due to fast-spread capabilities. Resulting from globalization
Infrastructure
Infrastructures are crucial to the success of a business. Due to a rise in globalization, governments have created infrastructures connecting one region to the other. The advancement in technology ensures that products meet consumer needs and that business can manage their budgets and operations efficiently.
Leadership
For a business to be successful, it should have a proper leadership structure. Globalization has enhanced the export and importation of skills. The exportation of skills has risen over the last ten years (Lauridsen, 2018). With this, human resource management and executive boards can acquire the best available leadership qualities in the market, increasing market productivity.
People – human resources
Human resource is essential in the development of a business. Globalization has led to the availability of cheap labor and an increase in the importation of labor. A large workforce increases production (Presutti, 2016). Besides, companies can move production to regions where there is an available workforce.
People – customers
The ultimate goal of value chain is customer satisfaction. Globalizations increase the number of consumers available for a specific product. As a result, managers and other policy-makers have to influence their productions to the desire of consumers of the targeted region despite the probability of an increase in the costs of production.
People – shareholders
Shareholders are the main owners of a company. With the rise of globalization, cross border investments have become possible (Gereffi, 2019). As a result, entrepreneurs have to form businesses and policies favorable to both local and international shareholders
Political (external)
The external political environment influences the expansion goals of a business. For instance, a company cannot expand to a politically unstable nation. With increasing globalization, managers can effectively choose countries with a conducive external political environment for trade (Defraigne, 2017). Therefore, promoting decision making.
Political (internal)
The internal political environment is the management and administrative decision-making procedures. Each company has its decision-making processes. However, the management and other executives should consider views from non-local parties in a business. This statement implies that there is a need to offer considerations to views and opinions from members of a company from other regions.
Product development
The process of product development is an essential one. As a result, production managers and other decision-makers must focus on the availability of material necessary in the development process. Globalization promotes the availability of resources and labor that essential in product development (Thompson & Smith, 2017). It provides competitive advantages to organizations outsourcing resources.
Strategy
Growth is vital for the success of any organization. However, with the rise of globalization, the determination of better growth strategies has become harder. Therefore, for the success of any organization, its growth strategies must consider external and internal factors of the region of operations (Presutti, 2016). Globalization provides for better finance and planning.
Supply chain management
SCM officers are in charge of the control of the supply chain. Currently, organizations can seek products and services supply from the global level due to globalization. As a result, policy formulators have to ensure that they create a system that allows for competitive tendering and procurement (Thompson & Smith, 2017). This process will, in turn, promote product management.
Technological consideration
Technology has dramatically influenced value chain. However, globalization has further advanced the importance of technology. As such, businesses must use technology that is efficient to them (Defraigne, 2017). Luckily, the increase in interaction between nations allows for the selection of the most effective and efficient technology.
Conclusion
The value chain of a business is crucial in consumer satisfaction. As seen, it influences the decision-making capacity of the involved parties. However. Globalization has complicated the consumption of goods and services influences several elements that promote consumer satisfaction. Each organization must consider the fragility of its decision-making parameters to ensure minimal impact on the value chain.
References
Defraigne, J.-C. (2017). Sustainable growth in China and the EU: Competition or Cooperation? An analysis stemming from the globalization of the value chain. Dial.Ur, pp. 5-27. Retrieved from https://proxy.bib.ucl.ac.be/proxy-dial
Gereffi, G. (2019). Global Value Chains and Development: Redefining the Contours of 21st Century Capitalism. Cambridge University Press.
Lauridsen, L. S. (2018). New economic globalization, new industrial policy, and late development in the 21st century: A critical analytical review. Development Policy Review, 36(3). doi: https://doi.org/10.1111/dpr.12299
Presutti, W. D. (2016). Understanding the Dynamics of the Value Chain. EBSCO Publishing.
Thompson, P., & Smith, C. (2017). Working Life: Renewing Labour Process Analysis. Palgrave Macmillan.