T2 - globalization
Posted: Sun Jun 01, 2014 7:20 am
Number of companies that are selling their products worldwide is increasing. Does this phenomenon have more advantages or disadvantages?
It is true that more and more international companies and enterprises are expanding their business to almost every corner of the world. While this trend has certain drawbacks, I believe the overall benefits of it outweigh its disadvantages.
On the one hand, the expansion of multinational companies poses a threat to local businesses. To take China’s car industry as an example, in the 1990s, the Chinese government opened its automobile market to foreign countries and then Japanese cars started to flood into China. As a result, many local Chinese car makers suffered tremendously from the significant drop in their profit. It was hard for them to compete with those Japanese brands because of the lower price and higher quality of these Japanese cars. From this example, we can see that the impact of foreign products could be damaging to the local businesses of a country.
On the other hand, there are also many benefits accompanying this trend. To begin with, consumers can directly benefit from the introduction of foreign products as these large companies usually can provide cheaper and higher quality products as well as better services. Furthermore, local businesses can also learn advanced technologies and management experiences from these international companies. Let’s look at Chinese automobile industry again, after suffering about 10 years from the impact of the introduction of foreign cars, several Chinese brands started to reclaim their losing land in this business because they improved the quality of their products by adopting new technologies and management.
To conclude, from my perspective, although the expansion of international businesses could pose a certain threat to local industries in a short term, it is more beneficial to consumers and the global economy in a long run.
It is true that more and more international companies and enterprises are expanding their business to almost every corner of the world. While this trend has certain drawbacks, I believe the overall benefits of it outweigh its disadvantages.
On the one hand, the expansion of multinational companies poses a threat to local businesses. To take China’s car industry as an example, in the 1990s, the Chinese government opened its automobile market to foreign countries and then Japanese cars started to flood into China. As a result, many local Chinese car makers suffered tremendously from the significant drop in their profit. It was hard for them to compete with those Japanese brands because of the lower price and higher quality of these Japanese cars. From this example, we can see that the impact of foreign products could be damaging to the local businesses of a country.
On the other hand, there are also many benefits accompanying this trend. To begin with, consumers can directly benefit from the introduction of foreign products as these large companies usually can provide cheaper and higher quality products as well as better services. Furthermore, local businesses can also learn advanced technologies and management experiences from these international companies. Let’s look at Chinese automobile industry again, after suffering about 10 years from the impact of the introduction of foreign cars, several Chinese brands started to reclaim their losing land in this business because they improved the quality of their products by adopting new technologies and management.
To conclude, from my perspective, although the expansion of international businesses could pose a certain threat to local industries in a short term, it is more beneficial to consumers and the global economy in a long run.