In your small business, globalization is potentially more important than you realize, to make new customers all around the world and to capture new ideas from other businesses like yours from different parts of the globe to compare them with yours. Considering globalization can help your business so much and you’ll see why.
Internet Marketing to a Global Market
If you have a small business that works through the internet, for instance you’re selling products online, you may have products that are not yet present in certain countries you selling to or want to sell into. Also advertising on the internet is a great way to get people to visit your website and buy your products. Internet advertising it is less expensive than creating traditional marketing campaigns in an individual country. This creates a broader potential for sales.
Generates New Ideas
All across the globe there are large and small successful businesses that have powerful innovative ideas. Globalization is a way to share your ideas with the world and gain ideas from other countries. Small businesses can gain these new ideas and apply them as their own.
Sources for Raw Material
Globalization makes possible many different ways to get almost anything from anywhere in the world and has created different sources of raw material and resell it as retail. Globalization also allows small businesses to gain access to more wholesale products to apply them to their own business. By purchasing items from other countries and continents, small businesses may also authorize whole functions to these different countries. Many small businesses tend to not have the ability to create in-house departments for functions they need but may not have the ability to get, such as marketing, etc. The business may authorize these functions to other countries instead.
Negative Impacts on Small Businesses
However, not everything about globalization is good for small businesses. Competitors could possibly get cheap production from other countries and are able to offer a cheaper price for products against yours. This makes it harder for localized small businesses to compete. Therefore, it is important for small businesses to create opportunities for changing their ideas, price and quality of their product if they want to stay ahead of their competitor. Technology is also a very hard thing to keep up with. When buying, the customer wants the newest and latest. A small business needs to keep up-to-date with all of the technological changes if working in that area.
Here is a real example of the effects of globalization in reverse
Chicken of the Sea cans tuna. This company had a plant in American Samoa, they employed on average about 2000 workers. When minimum wages in American Samoa were legislated to uneconomic levels the company moved the canning plant over to Georgia, USA were they invested in higher levels of capital in equipment that required only around 200 workers to operate. The workers in Georgia got higher salaries, but that that was offset by the amortized investment in capital which requires fewer workers.
A change in minimum income rules urged the move. Samoan workers were initially relieved, but that changed soon after.