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The Role of Globalization in the Development of Firms Competitiveness - Term Paper Example

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"Role of Globalization in the Development of Firms’ Competitiveness" paper states that despite the forces of globalization, locality advantage remains the key determinant of competitiveness’. The paper identifies whether the evidence from corporations and specific industries supports this view. …
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The Role of Globalization in the Development of Firms Competitiveness
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Download file to see previous pages The power of firms within their local market defines their potential to compete effectively the other firms that operate within the same sector in the international market. The fact that despite the existence of many multinationals, local firms have often more powerful presence within the market of a specific country that supports the above view. As an example, we could refer to the supermarket industry and the case of UK where Tesco, a firm that is well expanded across the country dominates the country’s relevant market despite the fact that there are other firms within the same market that have become international, like the case of Marks and Spencer. Indeed, in accordance with a series of current data (the most current available) published by the Guardian (see Appendix section, Figure 1) Tesco dominates the British supermarket sector with a significant difference from the second most powerful competitor (26% for Tesco and 17% for Asda). In other words, locality and national advantage keep on remaining a fundamental criterion for the competitiveness of a firm. Globalization can help the firm to acquire a more active presence within the international market but not necessarily to achieve a higher rate of growth or to increase its competitiveness, especially in the national market.

Globalization is a phenomenon well expanded around the world. Regarding specifically the business activities, it is stated by Mueller (1994, 407) that ‘multinational companies have been effective in diffusing best practices across borders: one implication is that organizational and globalization effects may complement or even counteract the societal effect’. On the other hand, the global market could be represented using a series of schemes. The most known study regarding globalization and its effects on business are one of Porter.  Indeed, in accordance with Porter (1998, 77) ‘today's economic map of the world is dominated by what are called clusters: critical masses - in one place - of unusual competitive success in particular fields.   ...Download file to see next pages Read More
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