21st Century Globalization: Transforming Economic, Political & Social Landscapes - Essay Sample

Introduction

The global economy of the 21st century has had a substantial role to play in transforming the economic, political and social landscape. The pace of the structural changes witnessed in the globe today has proved more rapid and pervasive than it has been seen in the world previously. Globalization has helped in melting national borders and has been effective in creating free trade, which has improved economic integration. Most companies are increasingly expanding to foreign nations in search of more profits and revenues. With this in mind, this paper seeks to compare the theories of international business and whether they are in line with the realities of expanding to foreign nations taking to consideration the case study of Arla Foods internationalization plan to Nepal.

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One of the essential factors of globalization, as stipulated in the textbook, is the fact that management of a foreign venture requires a variety of practices from one country to another (Hill & Hult, 2019). Also, Wolf (2017) backed the claims by asserting that a complex decision-making process is required during the internationalization processes. For the international venture to be a success, Smith (2019) stated the need to understand the trading practices of a country in question, particularly issues related to currency and investment systems and adjust desirably. From my experience in the global business plan aforementioned, I have realized that all these concepts given match the realities of internationalization. In the business plan, I learned that the culture of the people residing in a country could have a substantial effect that could either be positive or negative, especially in food ventures. For instance, some nations such as Nepal consist of people from a variety of cultures and religions. Majority of these religions do not consume meat. Opening a meat production company in the area would not attract most consumers from different faiths in Nepal. However, they can consume animal products that include milk. Arla Foods that deals with the manufacture and production of milk products could work well in Nepal. Mainly, this showed that cultural familiarization is an essential theory of globalization that applies to the realities of internationalization.

Further, currency considerations affect global business practices as stipulated by Hill and Hult (2019). Importantly, the trend of adopting a flexible market by focusing on the exchange rates arrangements have substantially resulted in the movement towards currency convertibility (Smith, 2019). It is worth noting that most nations have eliminated the restrictions on exchange for the international transactions taking place in the world today hence creating conditions suitable for the growth of domestic foreign exchange markets where the determination of exchange rates is done without any issues of inflexibility. In the business plan, I had to consider the currency value of the Nepali currency since it significantly affects the overall pricing strategy of the venture. Mainly, this implies that the decision for determining the pricing of commodities depends on an array of factors such as currency value that ought to be included in a business plan, which identifies the odds and benefit of setting up a company in the foreign market.

Consequently, Hill and Hult (2019) indicated that a company ought to assess the foreign market and select the most suitable one before internationalization. Further, Wolf (2017) argued that the choice of an international market is based on the profit potential of a business in the selected country. Thus, this requires identification of the market size, present and future wealth of the consumers, costs and risks and the value created by the venture based on the suitability of the items sold and the nature of competition. The factors discussed applied to my business plan since I considered the competition in the country and considered that the dairy industry is not one of the booming industrial sectors in the region hence making Nepal suitable for the foreign venture of Arla Foods. Further, I assessed the affordability of the target consumers to the products that Arla Foods will offer to the Nepalese by determining the country's GDP and the rate of employment a well. All these factors could adversely affect the internationalization venture hence ought to be focused on during the planning stage to identify the most suitable nation for the internationalization venture.

Another entry decision that is indicated by Wolf (2017) is the first-mover advantage determined by the timing of entry. The first-mover advantage enables a firm to capture the target market and create a secure brand positioning that competitors are not likely to match with once they advance to the nation. However, the timing of entry was not a factor that was considered in the business plan for Arla Foods internationalization to Nepal. If the strategy aimed at internationalizing to countries such as China, the timing strategy would have worked. In the case of Nepal, most companies are not likely to consider opening a foreign venture, mainly due to its poor economic conditions, which made the business plan and strategy an interesting one to focus on, as it was mentioned in the business plan. Importantly, Nepal is not a strong economy but contains other factors suitable to attract Arla Foods to internationalize in the region. Many dairy farms, especially those that have established themselves in developed nations, may not consider the internationalization strategy to Nepal since it would slow down their economic growth. However, for Arla Foods, internationalization to Nepal would be a commercial advantage for the corporation considering that Arla Foods is not well-economically positioned to compete with other dairy companies in developed nations.

In the business plan, Arla Foods considered the political, economic, and legal systems of a country. According to Thornhill (2018), these factors could raise critical ethical issues that pose some implications for an international venture. The political, legal, and economic systems of a country could influence the attractiveness of a nation as a site for investment. The plan evaluated the pros and cons of the political and legal framework of the country. The drawbacks included the fact that the government lacks effective laws and regulations that influence good governorship. However, the pros included the promotion of the Foreign Direct Investment (FDI) and the issuance of subsidies to dairy firms interested in internationalizing to the region. Such benefits outweigh the cons that Arla Foods could come up with ways of solving them. For instance, the issue of lack of active unions to secure employees could be resolved by coming up with a culture where the company ensures good working relations with the workers and provides them with their benefits as stipulated in the overall organizational culture. Also, Arla Foods could opt to address any form of labor issues internally to avoid problems that include loss of working hours that could affect the overall productivity of the firm.

As mentioned by Hill and Hult (2019), issues of the supply chain could have a profound effect on an international business venture. Consequently, Vaitheeswaran (2019) indicated that some of the strategic objectives of a company during its internationalization plan would be to ensure that the overall costs of moving the raw materials to finished products remain low for the generation of profits. The supply chain affects the pricing strategy. The issues of the supply chain match discussed in theory match the realities of starting a global business. In the business plan, it was realized that a comprehensive distribution strategy would be valid for Arla Foods to compete in Nepal. The overall strategy considered led to the realization that it would be cost-effective to set up an operations plant in Nepal. Importantly, the globalization of the food company could have profound effects on the supply chain. The onset of globalization, as Vaitheeswaran (2019) stipulated, has created complexities in the management of the supply chains. The increase of disruptions is possible in the case for Arla Foods, which requires the need for risk management structures.

Additionally, Nepal is a country whose dairy industry sector is not well booming. As a result, the supply chains in the nation for dairy products are limited. Therefore, Arla Foods' business plan considers setting up an operating plant in the country as a solution to this issue. As Vaitheeswaran (2019) asserted, in instances where the supply chain operations are under its control, as it is the case for Arla Foods, instances of disruptions are likely to be limited. Thus, the company can access the information and could be easier to identify, quantify, prioritize, and also mitigate risks to enhance better decision making. Maintaining the supply chains in Denmark would make it harder for Arla Foods to reduce risks for sound decision making. The solution for setting up a supply chain operating plant in Nepal would be most suitable in ensuring minimal supply chain disruptions in the internationalization strategy.

One of the good news of globalization, as seen in the global business plan, is the fact that people from a variety of advanced and emerging economies claim that international trade and global business relations are suitable for the nations. According to Pilling (2018), people tend to voice their opinions asserting that global business ties are ideal for their economies when foreign corporations build new factories in their nation. In this business plan, Arla Foods' internationalization to Nepal is good for the Nepali economy since it will help in the creation of jobs for most Nepalese. Also, the tax accrued from the supply chain operations and overall production and distribution network will help increase the total GDP of the country. Such benefits could lead to deeper economic integration in the nation. The trade will create jobs hence increase the wages accrued by the Nepalese. However, the business strategy will work against the popular belief that trade lowers the prices of commodities in the country.

On the contrary, the foreign venture seeks to increase the revenues accrued for the business. Lowering the prices will not be an act of gaining profits. The setting of the rates will not only be dependent on the country's factors but also on the costs of products to ensure profit increment. As Pilling (2018) indicated, the ugly consequence of the sentiment is the skepticism about trade and foreign investment. The trade agreements approve a deal with claims that it could spur growth and jobs. In the event of failure, citizens of Nepal would likely develop skepticism to trade deals and foreign business investments in the country. The most suitable solutions that Arla Foods could implement is to ensure that the majority of the Nepalese are employed in the supply chains, production and distribution facility of the corporation. Also, the company ought to provide the workers with the desired wages that would increase their motivation and would create a positive mentality on the business venture. Such solutions would help prevent trade skepticism.

Conclusion

To sum this up, this paper seeks to compare the globalization theories and the realities of globalization in practice. Most of the globalization theories match the realities of globalization in practice. As seen in this paper, the methods indicate the need for complex decision making processes and supply chain management techniques. In the business plan for Arla Foods internationalization to Nepal, complex decision-making was a necessity and the rig...