The effect of globalization always divided into positive and negative effects.

The effect of globalization always divided into positive and negative effects.

student 1

Globalization doesn’t effect my project at this point. The model I’m developing relies on local brick and mortar locations in order to provide the full range of our products. I can envision a point where we expand to wider global markets however the method for doing that will be through offering franchise opportunities in the regions where we are considering expansion.

By utilizing local franchisees in any expansion plans we overcome language and cultural barriers that may exist in the new markets. Similarly, local owners will be in a position to navigate any legal or ethical issues that are unique to their region/country.

This week’s text covered globalization from the standpoint of utilizing digital resources. While my model does fall within this market our plan is to couple those online services with live personal help, so there won’t be a user in Paris France or London England if we do not have an office in those regions. We are not putting our product out on the internet for all users but rather offering our online services as part of a larger package of services tied to a local office.

student 2

The effect of globalization always divided into positive and negative effects. Some economists have a positive outlook regarding the net effects of globalization on economic growth. … Foreign Direct Investment’s impact on economic growth has had a positive growth effect in wealthy countries and an increase in trade and FDI, resulting in higher growth rates. Multinational corporations are a result of globalization. They occupy a central role within the process of globalization as evidenced through global foreign direct investment inflows.

For example, the Foot Locker Inc. is a large multinational corporation that includes two segments: Athletic Stores and Direct-to-Customers. The Athletic stores segment is the one of the largest sportswear and footwear retailors in the world. It operates 3,363 athletic retail stores in 23 countries. The establishment of the braches is an effective way to promote the brand in different countries. According to the statistics of Yahoo Finance, the revenue of oversea sales accounts for large proportion in total revenue. The retail stores that locate in 23 countries would able to generate more profits for the company. It indicates the globalization has positive effect on the development of the company.

On the other hand, the globalization also has negative effects on the operation of the multinational corporations. For example, the weakness of foreign currencies against the U.S. dollar could require the company to either increase prices or decrease the profit margins in locations outside of the U.S. The growth of the prices will likely to have negative impact on the demand for Foot Locker’s products (Zacks Equity Research). The Foot Locker is American company and will be influenced by the floating exchange rate in other countries. Foreign currencies in a weak position compare to dollars in the currency market. Thus, the depreciation of the foreign currencies will decrease the consumer demand outside of the America.

Reference

Foot Locker (FL) Exhibits Operational Strength, Risks Remain (Nov 24, 2016). Zacks Equity Research.Retrieved from https://www.zacks.com/stock/news/240223/foot locker-fl-exhibits-operational-strength-risks-remain