Globalization, the process by which companies operate through interdependent relationships, allows goods and services, financial capital, and information to flow across international borders. These relationships result in competition among many firms, domestic and international, against one another. Under globalization, financial assets might be borrowed from a lender in one country to buy raw materials and components in another country. Production equipment could be developed in a third country, built in another and installed and operated in still another, where it produces products for sale that will be shipped to yet another country.
Business Risks of Globalization
Such business ventures require extreme caution in communication and decision making, since linguistic and cultural differences complicate strategic business decisions. Consequently, partnering with professional translation company is essential. Choices that shape decisions become increasingly important with the complexity of exchanges and business processes across economic markets. Consequently, while globalization offers businesses many opportunities, it also introduces new risks.
Many risks are associated with operating internationally. One of the most obvious is the frequency of long learning curves involved with becoming established and competing in a new market. During the learning period, because businesses typically operate inefficiently, performance suffers until necessary knowledge and expertise are developed or transferred from the home market. Consequently, long-term performance may suffer with substantial globalization.
Trends Driving Globalization
Among the strongest trends driving globalization is the emergence of the BRIC economies. These advanced, emerging, high-growth economies, Brazil, Russia, India, China and South Africa, make up 41% of the world’s population and are expected to grow at a pace of 4.6% in 2017, thus creating new opportunities for global marketers. In addition to the BRICS, growth in the VISTA countries, Vietnam, Indonesia, South Africa, Turkey and Argentina, is driving globalization. With nowhere near the economic might of the BRIC countries, growth opportunities in the VISTA nations nevertheless make them attractive too. Aside from the BRICS and VISTA countries, Mexico and Thailand are also extremely attractive to global marketers. As these countries continue to grow, they become more lucrative targets for large multinational businesses.
Regardless of the size of your company or the products it produces or sells, taking advantage of globalization demands strong communication skills among channel members, employees, government organizations and customers. To communicate with your stakeholders, a company must have language translation services that can complete jobs quickly, accurately and affordably.