Globalization has made the world a global village by means of technological advancement, advanced product supply ratio and increased cash flow. While many critics have periodically objected about the perils globalization has caused regarding the declining employment opportunities and lower revenues for SMEs in the developed countries, there are also prominent benefits that globalization has established, which cannot be overlooked.
By definition, Globalization is defined as a process where the companies carry out their businesses irrespective of the boundaries. Globalization is majorly responsible for introducing new products in the markets of various countries simultaneously. The process is carried out by the companies that are well-established and are interested in increasing their revenues to an international level.
Globalization is a way to lower the operating costs and also significantly helps in reducing the risk of a new product. However, for such measures, the companies require to develop policies and strategies that will help them in becoming a successful multinational organization. By means of globalization, the companies can diversify their risks of associated costs that can boost the profits to a remarkable extent.
The main disadvantage of globalization is that it is responsible for the outsourcing of jobs in foreign countries particularly in the developing countries where the operating costs are less expensive. This causes unemployment in the developed states, which is a crucial factor. Another drawback of globalization is that SMEs are not able to compete with the big giant that causes lower profit margins from that aspect to the economy. In addition to that, companies should be considerate while entering a new market and conduct an in-depth research that will allow them to interpret the needs and wants of the targeted audience.
Because of the technological developments, the globalization process can be achieved easily by companies now. Companies can expand the business units and attain a competitive advantage at great momentum.