Globalization and proliferation
Globalization and proliferation of information technology have dramatically altered the way business is conducted. Firms seeking a competitive advantage have the option of outsourcing their production to countries with cheaper overheads. With the click of a button, funds can be transferred from one location to another, speeding up financial transactions and ensuring real time payment for supplies and deliveries. Emerging markets with impressive growth rates are the next frontier for expansion opportunities whereas green options and sustainability concerns are increasingly dictating the manner in which business is carried out.
Corporate governance encompassing ethical practices and the need to satisfy stakeholder interests has undergone radical changes in the last two decades. Public indignation over executive greed and the collapse of corporate giants like Enron and World. Com saw the introduction of stringent accounting and corporate rules that enhanced accountability and transparency. Annual general meetings provide an opportunity for shareholders to query executive decisions, change the board of directors or resolve to fire the CEO.
Outsourcing of production to cheaper investment destinations like China and India enabled firms to retail their products at a lower price than the competition. Smart businesses took advantage of this opportunity to increase their market share and expand their horizons into emerging markets with lower disposal income levels. Service industries have achieved phenomenal growth with new global ventures overtaking investment in traditional manufacturing and agricultural sectors.
The use of IT in promoting customer care through call centers has witnessed significant foreign investment in emerging markets with the necessary infrastructure platforms. This has boosted internet use and expanded the scope for fiber optic applications. E-commerce as a sales and marketing tool has transformed business by providing a cheaper medium to reach a global audience. Most firms have invested in websites that provide comprehensive information about the firm, its products and purchasing options.
The advent of online payments for goods and services has reduced company overheads by eliminating the need to operate physical retail outlets. Lower costs of production have contributed to cheaper goods and services and encouraged consumers to buy more of the products on offer. Cross cultural marketing issues have impacted businesses as globalization has pushed firms to expand into markets with different cultural backgrounds. It has become imperative for firms to translate company information and product specifications into local languages for the target population.
In some instances, changing the brand name with a local one is the best option to get the target population to indentify with the product and create brand loyalty. Environmental concerns and sustainability issues have impacted the supply chain and production processes in most companies. Consumers are demanding that businesses employ strategies that protect the environment and sustain the availability of supplies. The use recyclable materials in production and packaging play an important role in influencing household decisions to purchase a commodity.
Those firms that address these concerns have seen their market share grow substantially. In conclusion, globalization and IT will continue to play an important role in determining the direction that businesses will take in the future. Greater reliance on IT solutions will improve on supply and delivery times while expanding the market reach of firms through online advertising. By developing a culture of accountability and transparency, stakeholder influence in the running of business firms will be enhanced. References Introduction to business