Globalization creates more opportunities for UK business than threats. To what extent do you agree with this agreement?

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Samuel Ma

Globalization creates more opportunities for UK business than threats.

To what extent do you agree with this agreement/ (40 marks)

Globalization is the growing trend towards worldwide market in products, capital and labour, unrestricted by barriers. In many years, companies want to increase their sales, profits, or maybe fulfil their ambitions, they started to change themselves and become a multinational company, with the expansion through free trade between countries where the reduction in tariffs or quotas have been helping a company to work better than ever.

As globalization is a way to expand the company, there must have opportunities, or else, the company will not do it. Through globalization, businesses will have the greater opportunity for selling goods in other countries. Entering a new market which is not saturate can give the chance to increase sales, economies of scales and improved profitability. For example: China. It has the biggest potential market in the world due to the rapid growth, also the China government policy initiatives spur demand Different companies are exploiting it. Mothercare is one of them, they signed a joint venture with DF Brands and opened store in India and China. Through the sign with joint venture, or joining a partnership, the risk of globalization will reduce, for any impacts on stores or firms, it will be split and solve between them.

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By expanding themselves through either China or India, firms might benefit from the reduction in cost too. As the labour cost will be lower due to the lower wage rate, cost of production, e.g. raw material and the rent of properties will be lower as well. They might also benefit by develop relationship between clients or even adopt the local culture wherever they locate the business, which help the business in the long run, as they are able to interact with customers. According to the article, Tesco’s success is due to their ability that acts like a local company ...

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