GLOBALIZATION AND

ENTREPRENEURSHIP
UNIT-5
GLOBALIZATION AND ENTREPRENEURSHIP

Globalization is the spread of products, technology, information, and jobs across

national borders and cultures. In economic terms, it describes an interdependence of
nations around the globe fostered through free trade.
Taking a company globally is a big step for any company. But in order to be
successful, it is essential that the company understand the needs of the consumer in
all of the parts of the world they do business in.
Global market research is the task of finding out what consumers want and
planning how to produce those products. However, the term global means doing this
task on a much larger scale. Instead of finding out what consumers want locally or
nationally.
DEFINITIONS

The coordinated performance of marketing activities to create exchange across

countries that satisfy individual, organizational and societal objectives.
Global marketing coordinates activities across different country markets.
Global marketing is conducted across countries (Not domestic or foreign)
Global marketing should be motivated by individual, organizational and societal
goals.
Global market research is the task of finding out what consumers want and
planning how to produce those products. It differs from traditional market research
because it is on a much larger scale. Some components to consider when
conducting global market research include the product, location, marketing, and
price.
 COMPONENTS OF GLOBAL MARKET RESEARCH

There are important components to think about when conducting global market research.
The product- products may need to be altered to meet the demand and the taste of the area.
For example, maybe in Japan they eat different food than what consumers eat in Europe.
This difference may force a food company or restaurant to adjust their products accordingly
for each area.
Location- This considers how consumers purchase products. Do they go to the store? Do
they purchase online? An area without internet connection would probably not benefit from
a strictly online store.
Marketing- How do you reach your customer? If you are trying to reach a customer where
television is not readily available, you probably would not want to use television
commercials to market your product.
Price- Like we mentioned earlier, in different areas of the world, the prices of products
change. It is important to do research on what consumers are willing to pay in each area of
the world.
HOW TO CARRY OUT MARKET RESEARCH

Entering the international market arena needs careful business planning. One of
the first things you need to do is to learn about the target locations. For this, you
have to conduct an extensive international audit. It will not happen overnight.
You have to build a strong market research strategy. Here are the steps.
1. Carry out a market research before entering the new market.
2. Continuously do an international market research to adapt to new market
developments.
3. Find more channels for your research.
4. Think of all possible questions.
5. Conduct the market research methodically
 GLOBAL SUPPLY CHAIN

An integrated process where several business entities such as suppliers, manufactures,

distributors and retailers work together to plan, co-ordinate and control materials, parts and
finished goods from supplier to costomers.one or more of these business operate in different
countries.
Advantages of Global Supply Chain
Reduce total cost
Inventory cost reduction
Increase forecast accuracy
 Productivity increased
Improved capacity
Expand international connection
Delivery improvement
 MARKET RESEARCH ELEMENTS

1.Target audience: This is one of the most important criteria in all stages of product development,
especially when you need to identify market opportunities. By studying your customers, you can
get a rough estimate of how often your product will be bought or how much they are willing to
pay for your services.
2.Market size: Tally the sales of your competitors or try to identify the number of potential
customers if your product is new. The numbers you get will be the approximate market size. If you
are already a market player, you will have your own number.
3.Market growth: Review figures and facts from the previous 5-10 years in the chosen industry to
see whether the market is growing or declining.
4.Competition: It is necessary to estimate whether the competition is low or high to forecast which
type of launch you have to use, the price you should choose for the product and how much of the
promotion will require funds.
 DEFINITION OF GLOBAL TRADE

Global trade, also known as international trade, is simply the import and export of goods and
services across international boundaries.
Goods and services that enter into a country for sale are called imports. Goods and services that
leave a country for sale in another country are called exports. For example, a country may import
wheat because it doesn't have much arable land, but export oil because it has oil in abundance.
 Global trade can create economic wealth on a global scale as each country maximizes its revenue
and growth by focusing on what it does best and saving money on imports that would be more
costly for it to produce domestically.
Global trade can also reduce international conflict and war.
Global trade creates long-term mutually beneficial relationships or a symbiosis.
 FINANCIAL FEASIBILITY

A financial feasibility study, or FFS, should assess the viability of a project based on major pivotal component:
will the project or business have enough cash to complete the project (and generate a profit). One of the
bottom lines of any business is whether a company can sustain itself, pay its employees and of course make a
profit. A financial study can help in this assessment. Components to considers include:
1.Company Expenses
2.Revenues.
3.Assets
4.Liabilities
5.Cash flow (money in, and money out).
An economic or finance feasibility study is developed for companies that seek to understand the amount of
capital they need to procure to successfully start and complete any given project.
Financial feasibility audits and assessments are necessary to help you make critical decisions. They inform
your understanding of whether a prospective investment in a new project or an extension of an existing one is
likely to be worthwhile.
HOW WE DELIVER OUR FINANCIAL FEASIBILITY SERVICES

Our financial feasibility specialists will begin by obtaining a good

understanding of the project and its target market. Based on that understanding,
we will develop a comprehensive set of assumptions regarding the following:
• The estimated cost of your investment.
• The period of project completion and the timing of the cash outflow.
• How the project will be financed (equity, debt, or a combination).
• The cost of the funds (capital) that will be invested in the project.
• The sources of operating revenues and the magnitude of the revenues
projected to be realized after project completion.
• The operating costs of the project after completion.
BENEFITS OF FEASIBILITY STUDY

Prepares the companies for up to date information regarding statistical information on

any project, i.e. market for products, real estate development, demographics, income
streams, etc.
Creates a knowledge of how much capital, if any, is needed for the project’s launch and
success. Again, this can be for any business, high tech, real estate, oil, energy etc.
Helps with strategies. Since the financing needs are known this can help with
strategizing next moves or first mover advantage for new areas.
Identifies areas for growth.
Inspires confidence in the management team since obtaining the numbers can strengthen
a business and its leadership belief in the company’s success.
Feasibility studies provide intelligence, statistics for the management team.
THE BIGGEST TRENDS IN ENTREPRENEURSHIP

1. Everyone is doing it. It seems like everyone calls themselves an entrepreneur.

According to Inc, nearly a fifth of all working adults in the US are “entrepreneurs”. The
barriers to entrepreneurship are technically low. You don’t need a ton of capital. It is
generally fairly easy to go through the bureaucratic steps to be an entrepreneurs.
2. Intrapreneurs are becoming more common. Many established companies are
promoting innovation through internal entrepreneurs. These are employees that are
allowed to work like entrepreneurs.
3. Solopreneurs are increasing. A solopreneur is an entrepreneur who runs their
business alone. They don’t have employees, but may have contractors. Solopreneurship
is rising as it’s lean, nimble, minimal, and free. For example, only one person can run an
e-commerce store at the beginning.
4. Marketers are becoming Entrepreneurs. More and more people with marketing
ability are taking up entrepreneurship. With the rise of social media, it’s increasingly
marketing ability that sells any product.
5. Hiring contract workers is the thing to do. Since it is getting more expensive to hire
and retain experienced staff, a common solution is to find term contractors. It’s a win-win
for both the contractor and start-ups/small enterprises.
6. Entrepreneurs are laser-focused on revenue. More entrepreneurs are seeing the need
to focus on revenue, first and foremost. Funding is limited. The entrepreneur is forced to
gain early viability and near instant revenue.
7. Few entrepreneurs are starting big companies. Most companies are digital. They focus
on digital technology. The ideal entrepreneurial venture now happens with a laptop and a
vision. Large scale ventures like a manufacturing plant, or a transport company is not a
popular pursuit.
8. Technology is becoming more and more disruptive. Take the examples of AirBnB and
Uber. These startups have redefined hotel industry and transportation industry. New
entrants include Virta Health, which connects diabetes patients directly with doctors via
video chat. Roadrunner Recycling that connects people with scheduled pickups and various
waste management solutions.
9. Working from home. Almost every startup is leveraging the power of remote work.
And many startups are taking that to the next level and going completely online. Startups
like Knack and Toggl are 100% virtual.
10. Marketing is getting more interactive. Twitter/Facebook is an example. Users
comment or retweet. Social media marketing is making marketing a two-way
conversation.
11. Consumers are in control. You can’t manipulate or trick people into buying your
product. That just doesn’t work today. Being honest works. They can also easily give
feedback. Negative feedback instantly ruins your reputation.
12. The Internet of Things is here. Internet of Things (or IoT) connects devices to the
Internet to open up new possibilities for using those devices. Apps to control those
devices through IoT are in demand. Data from wearable devices or even your fridge
13. Automation is rising. Chatbots and digital assistants are increasing. They are also
getting intelligent. Some even answer like a human would do.
 OFFSHORING

“Offshoring is defined as the transfer of worker’s productivity to abroad as part of

outsourcing or as a part of an in-house transfer of work.
Offshoring allows US companies to capture value by creating markets, jobs and
production of goods in other countries.
Major jobs offshored are in the fields of information technology, financial services,
human resources and purchasing and manufacturing.
Types of Offshoring:
Production Offshoring
IT Enabled Offshoring
Innovation Offshoring
MARKETS AND OFFSHORING

The globalization of service offshoring and outsourcing begun to take off in late
1990s. The basic driving force was the growth and technological improvements in
information and communication technology (ICT).
The initial offshore market consisted of IT services as a result of the increased
demand arising from the increased adoption of computer technologies by
businesses.
Offshoring services has as evolved from mainly IT services towards business
process services and from low end to higher value added services and more
knowledge based services such as research and analytics. The trend to more
business processes is a logical consequence of the fact that the basic enabling
technology of business process offshoring is the availability of software and
effective infrastructure to handle business process outsourcing.
OTHER MAJOR BENEFITS

 Focus on core activities (Innovation, Research and Development).

Reducing waiting time
Accelerated process cycles
Fragmentation of supply chain enables side by side development
Elimination of recruitment costs, liabilities of employees
 Flexibility- Eliminating hiring and termination costs
Increase GDP for both countries
Better Technology and infrastructure
Benefits from profits.
RECENT TRENDS IN GLOBAL ENTREPRENEURSHIP

Global Business
Global business consists if transactions that are devised and carries out across
national borders to satisfy the objectives of individual, companies, and
organizations. These transactions take on various forms, which are often
interrelated. Primary types of international business are import export trade
and foreign direct investment (FDI)
“Foreign direct investment (FDI) is an investment made by a company or an
individual in one country into business interests located in another country.
FDI is an important driver of economic growth”.
1. Business from home: Managing a business remotely has become the norm for many
entrepreneurs, particularly those who are just setting up their businesses. However, instead of
striving to grow out of their garages like the million-dollar companies that started from home,
many businesses had to revert back to where they started. With the popularity of online shopping,
the prevalence of social media use, the nearing implementation of 5G networks, and the
increasingly sophisticated computers available on the market, it seems that having a commercial
space is no longer a requirement for building a thriving company. You can easily facilitate
transactions from the comfort of your own home or virtually anywhere in the world.
2. Global Business power by remote work: Digital nomadism enabled entrepreneurs to manage
their business from their home or other parts of the world, globalism is the practice of working
with international teams to build, support, and expand their businesses.
3. Mobile Commerce: Modern business seems to have an overarching tenet–get to customers
wherever they are. This is part of the strong general trend of going customer-centric today. And, at a
significant portion of the time, consumers are now glued to their phones. People clock in around
three hours and fifteen minutes a day on average on their phones. Just like how the internet and the
rise of mobile technology allowed for digital nomadism and more globalism, it also paved the way
for more and better mobile commerce. Now, entrepreneurs can manage to chip away at their giant
competitors even from the comfort of their homes. In fact, it can be claimed that they have had a
hand at doing so.
4. Social Commerce: Social commerce has risen organically out of social media use. As social
media becomes more popular, many people just started doing something quite natural-they started
selling and buying online social media sites and apps.
Social commerce is a natural progression as E-Commerce and social media both become widely
used. There are many species of social commerce from user-curated shopping, to group buying and
from peer recommendations to social network-driven sales.
5. Increasingly Niche Market: an increasing number of people want highly-specific and
sometimes customizable products. To wit, this is the trajectory where being customer-centric
will lead. And, high customer-centricity is the breeding ground for more niche markets.

6. The Continuous Rise of Subscription-Based Business: In the original intent of its

authors, a disruption only happens when a product or service takes root in simple applications
(Clayton Christensen) at the bottom of a market. Then, it moves up this market and
eventually displaces more established competing businesses. Also, innovations are disruptive
only when they allow a whole new population of consumers at the bottom of the market
access to products or services that were inaccessible to them before. Thus, disruptive
innovations democratize goods, services, and the benefits that come with them.
7. The Continuous Rise of Subscription-Based Business: According to a recent report, the
global subscription and billing market will be worth $11.1 billion by 2027, growing at a CAGR of
14.4% from $3 billion in 2020. This is because of two main factors–the rise of subscribers to
existing brands and the increase of new subscription-based models. Moreover, the end-user
industry segments are aplenty. They include telecom, healthcare, media and entertainment, retail,
and IT, among many others. Today, the subscription-based model in businesses is picking up more
steam. Think about music and movie streaming or even planned meals. Our local gyms have a
subscription-based scheme as well.

8. Adoption of Disruptive Technology: a disruption only happens when a product or service

takes root in simple applications at the bottom of a market. Then, it moves up this market and
eventually displaces more established competing businesses. Also, innovations are disruptive only
when they allow a whole new population of consumers at the bottom of the market access to
products or services that were inaccessible to them before. Thus, in the preceding section,
technologies like Uber and Airbnb can be considered as disruptive technologies.
9. Growing Importance of Social Responsibility: Many approach corporate social responsibility
(CSR) efforts as just another type of PR stunt. Some companies have these departments just to keep up
appearances. companies are now being more careful about how their operations affect their external
stakeholders (e.g., the communities surrounding their operations and even non-customers affected by
their products). Also, many entrepreneurs take advantage of this trend as well. Socially-mindful business
is now big money. And it is only gathering steam.
10. Increasing Diversity: Today, we see a surge in demand for diversity. This is not only in the media
we consume. It is also in and about the bigger business landscape. However, diversity has always been
around. It’s just not as recognized and valued as it is today. It brings many business advantages.
11. Food for thought: This trend, one may argue, is more of a societal shift than a pragmatic need per
se. But, there may be pressures to have more diversity in the next few years in the workplace. This
makes it a pragmatic concern for companies and entrepreneurs as well.
Yet, diversity is undeniably an asset. It is also arguably better for entrepreneurs to have a diverse set of
points of view to draw information and inspiration from. In this way, entrepreneurs can see their
businesses from many more angles.
11. More Specialized Business Education: The changing business landscape and new
disruptive technologies, many educational programs needed restoring, especially to enable
education continuity amid the pandemic. Moreover, business education is looking to add
more specialized programs as well. Business schools are trying to rapidly meet the demands
of the evolving business landscape. To start, there is more ongoing cross-disciplinary
collaboration (Higher Ed Dive, 2019) going on between business schools and other academic
disciplines such as engineering and computer science.
12. Younger Entrepreneurs: Many younger people have strong motivations to become
businessmen. Moreover, they possess positive outlooks when it comes to business (Guidant
Financial, 2019). In addition, those that own small businesses are pretty confident of the
political climate of today. They are also happy with their roles as business owners. And, they
will likely continue to do so for a long while.
13. More Internet Media Outfits: Many entrepreneurial young people resort to creating
internet content. The Great Recession and, more recently, the pandemic have contributed to
creating this type of niches. Gamers, comedians, artists, educators, and many more flock to
social networks to create and monetize content. Enterprising young people don’t have to start
their own brick-and-mortar business. They can now create media outfits on their interwebs.
Internet media and content seem to be a good fit for entrepreneurial young people. This is
because 96% of internet users that are on YouTube (99firms) are in the age range of 18 to 24.
This makes it easier for younger creators to make relatable and engaging content for their
peers. In the next few years, we expect more and more entrepreneurial youth to venture into
creating internet media outfits.
14. Mobile Businesses Will Adapt and Evolve: Mobile businesses have been booming. In fact,
experts estimate the market size of the food trucks industry alone to be $1.3 billion in 2021, with a
growth rate of 2.4% (IBISWorld, 2020). What’s also great about the food truck industry is that it is
made up of a diverse set of people. The good things about these businesses too is that you don’t have
to put up a front office. You can just advertise on social platforms and via word of mouth.
15. Hyperlocal Specialty Shops: There are many kinds of hyperlocal specialty businesses out there
(IBISWorld, 2020). Their common ground is that they sell products and services uniquely relevant to
their localities. Of course, there are many segments in one locality. Hyperlocal specialty shops
examples include religious shops, thrift stores, fireworks retail, smokers’ accessories, art supplies,
and antiques among many others. They cater to the interests of various segments or niche markets in
their localities. They also exude a community vibe with close-knit ties. Thus, many are just primed to
amass a steady stream of passionate local patrons.
16. Green Business: As mentioned in the previous section, many entrepreneurs are gunning
for environment-friendly products. This is a big segment today. The eco-conscious movement
spans different industries (World Forum Disrupt), including green consulting, green app
development, energy efficiency auditors, and recycling businesses. Moreover, this includes
the green products mentioned before.
Environmentally-conscious policies, products, and information drives have affected the
psyche of consumers. In fact, the automotive industry which is identified as a culprit when it
comes to pollution is slowly going green thanks to the pressure.
young entrepreneurs could ride the wave of this trend. Professionals like accountants and
engineers can put up green consultancy businesses. Organic food delivery is also a hit. In
fact, it is not that hard to think of green businesses to put up. They can range from green
products to professional services like solar panel installation.