Advantages and Disadvantages of Globalization

There are many advantages and disadvantages of globalization. Essays, articles, and even research papers have been written on this subject. Let us explore some of them.
How many phenomena have a global impact? If you are to count, they could be counted on your fingertips. Globalization is one of them. So before going into the details, let's try to grasp this concept first. Simply put, globalization is an ongoing process of integration of regional economies into a global network of communication and execution. Let me explain this a bit. Assume that you are a mango farmer in India and you grow very good quality mangoes over there. Obviously, your fruit is highly appreciated in India, but you also know that you shall get a better value in the US. So, the network of communication and execution that allows you to sell your fruit in US is basically the phenomenon of globalization. (At least the Indian farmer is happy about the advantages of globalization in India, he is earning better.)

Globalization: Advantages and Disadvantages

Instead of giving a few pointers here and a few pointers there, explanation on these concepts should do more justice to the subject. Have a look at the following:

There has to be operational differences between various companies in different countries. What I mean to say is, a car manufacturer in the UK will manufacture a car with a different operation than a car manufacturer in Italy (for example Jaguar and Ferrari). Both are trying to take advantage of the operational differences that they have between them. And both companies are trying to sell a car in America for a greater value. So if you want your product to have an appeal on a global scale, then obviously, marketing on a global scale is required.

Advantages of Global Marketing
  • Lower Marketing Costs: If you are to consider the lump-sum cost, then yes, it is high, but the same cost goes even higher if the company has to market a product differently in every country that it is selling.
  • Global Scope: Scope of this kind of marketing is so large that it becomes a unique experience.
  • Brand Image Consistency: Global marketing allows you to have a consistent image in every region that you choose to market.
  • Quick and Efficient Use of Ideas: A global entity is able to use a marketing idea and mold it into a strategy to implement on a global scale.
  • Uniformity in Marketing Practices: A global entity can keep some degree of uniformity in marketing throughout the world.
Disadvantages of Global Marketing
  • Inconsistency in Consumer Needs: An American consumer will be different from a South African one. Global marketing should be able to address that.
  • Consumer Response Inconsistency: A consumer in one country may react differently as compared to a consumer in another country.
  • Country Specific Brand and Product: A Japanese might like a product to have a traditional touch, whereas an American might like to add a retro modern look to it. In this case, a global strategy is difficult to devise.
  • The Laws of the Land Have to be Considered: Original company policies may be according to the laws of home countries. The overseas laws may be conflicting in these policies.
  • Infrastructural Differences: Infrastructure may be hampering the process in one country and accelerating in another. Global strategy cannot be consistent in such a scenario.
Overall globalization has been a big boon for the developing countries, but there are a few who say that it has been a curse. Let us take a look at both these aspects of globalization.

The Advantages
  • GDP Increase: If statistics are of any indication, the GDP of the developing countries has increased twice as much as before.
  • Per Capita Income Increase: The wealth has had a trickling effect on the poor. The average income has increased to thrice as much.
  • Unemployment is Reduced: This fact is quite evident when you look at countries like India and China.
  • Education has Increased: Globalization has been a catalyst to the jobs that require higher skill set. This demand allowed people to gain higher education.
  • Competition on Even Platform: The companies all around the world are competing on a single global platform. This allows better options to consumers.
The Disadvantages
  • Uneven Distribution of Wealth: Wealth is still concentrated in the hands of a few individuals, and the common man in a developing country is yet to see any major benefits of globalization.
  • Income Gap Between Developed and Developing Countries: The wealth of developed countries continues to grow twice as much as the developing world.
  • Different Wage Standards for Developing Countries: A technology worker may get more value for his work in a developed country than a worker in a developing country.
  • Reversal of Globalization: In future, factors such as war may demand the reversal of the globalization (as evident in inter world war years), and current process of globalization may just be impossible to reverse.
Culture and globalization have really become interwoven aspects in modern lives, but one must remember the negative effects of globalization as well. I hope the above comparison is satisfactory to the reader.
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Last Updated: 10/7/2011
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