Both sides of the globe
The term globalisation was first coined in the 1980s although the concept stretches back centuries. The world continues to grow smaller with speedier and more accessible travel.
Finding points of difference that are the distinguishing marks of individual countries is becoming more difficult as shopping malls are built and McDonald's opens more Drive Thrus. And here in the UK it is possible to buy products that were once seasonal, all year round, and if you want Vegemite or biltong, you can have it.
The resolve of Western states to build and strengthen international ties in the aftermath of the Second World War laid the groundwork for today's globalisation. It has diminished national borders and created fusion among national markets. The fall of protectionist barriers has stimulated the free movement of capital and allowed companies to set up more than one base around the world.
So, globalisation touches all of us, but is it a good thing or bad? Increased international trade has made us wealthier and allows us to lead more diverse lives. For consumers and capitalists this is good. Strong trade has given us more choice when shopping, increased spending power, higher living standards and more international travel.
Globalisation has also promoted information exchanges, led to a greater understanding of other cultures and widened democracy.
However, it is not all good news. It may be argued that the West's gain has been at the expense of the developing countries. Globalisation may also put jobs in the Western world at risk as companies shift their production overseas to take advantage of low-wage economies.
International media, satellite television and increased personal travel have all helped to put national cultures and identities under threat.
The huge, global companies can be more powerful and influential than democratically elected governments, and shareholders' interests may be put above those of communities and even customers. Global economies of scale are also killing off smaller businesses which cannot compete.
More and more companies are not only multi-national, but global. Nestlé, the world's biggest food company, operates in more than 80 countries, but this is almost small fry when compared with Siemens, which operates in 190 countries.
With globalisation has come global sourcing, a term used to describe a centralisation of the purchasing function and a consolidation of the supplier base. Among the larger international companies, sourcing is often centralised because it is cheaper. Economies of scale come through collaborative purchasing and enable companies to achieve differentiation, a lower cost base or both.
Asda is able to source globally through Wal-Mart and in 2001 relaunched its general merchandise sector with 5,000 new lines, of which 2,000 were sourced globally through Wal-Mart. As a result, own label manufacturers have been keen to use Asda to build a wider relationship with Wal-Mart.
Many companies have had to address cost differences, even if there are good reasons for them, such as production or labour costs. However, while global sourcing has grown in importance, so has local sourcing, to enhance consumer choice.
Whatever we think of globalisation, it will increase. There are few places you can go where it is not possible to drink Coca-Cola or eat a Mars bar.
However, a backlash to this uniformity will always exist, giving rise to a demand for local sourcing and for the protection of cultural identities. And that cannot be a bad thing. n
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