Strategy of Competitive Pricing as a Backbone to Mitigate the Impacts of Globalization - Essay Example

World economy Introduction In this age of competitive rivalry and economic slump, sustainability and retention is the most essential requirement of any organization. Without which an organization may not prosper or retain its image and market share in the entire globe in the future era. However, in order to fulfill such inner desires, it’s extremely essential to recruit talented and experienced leaders as well as employees within the organization. Only then, the manager or the leader might identify the changing trends and demands of the target customers and act according to it. And then, it might prove effective for the organization to present varied types of inventive products as per the requirements of the customers thereby amplifying the brand image and productivity of the organization in the market among other rival players. Moreover, in order to enhance the level of reliability and loyalty of the customers over a brand, customer retention is also extremely essential. It might prove effective in enhancing the brand value of the organization thereby amplifying its level of competitiveness to a certain extent in the future age among other players. Hence, it might be depicted that, in order to cope up with the challenges of globalization, customer retention and introduction of inventive products are extremely essential. Discussion The main drivers of globalization Globalization is described as the process to move towards a more integrated and inter-reliant economy. This is mainly due to certain key environmental factors such as competitiveness, market trends, technology, political and economic scenario. Competitiveness- it is denoted as another vital environmental driver that offered significant impacts over the profitability of the organizations operating in diverse segments. Therefore, in order to cope up with such challenges, maximum extent of the organizations decided to offer varied types of inventive products to retain its brand image and customer base for longer period of time. Economic downturn- it is also another factor that offered a negative impact over the functions and operations of the organizations. As a result, in order to survive, most of the organization implemented the strategy of presenting value-added products at lowest possible price. So that, it might be used by the individual of varying age groups, religions, living standards and life style. Only then, the level of turnover and profitability of the organization might get enhanced with a significant extent in the future era as well. Thus, from the above paragraph, it might be analyzed that globalization makes nation-states more inter-dependent over one –another, i.e. more integrated into a global economy (World Trade Organization, 2008). Technology- introduction of varied types of technological machines and equipments resulted in amplification of the attrition ratio of the employees. Therefore, in order to cope up with such discrepancies, the management of the organizations decided to recruit experienced and talented staffs so as to enhance the productivity as well as performance of the employees. This strategy proved extremely advantageous for the employees and the organization thereby amplifying its rate of sustainability and dominance in the market in the future era as well (Porter, 2008). Introduction of varied laws- introduction of varied types of laws in order to cope up with the negative impacts of intensive rivalry and economic meltdown, presented significant impact over its operations. As a result, the organizations had to offer qualitative products at a competitive price so as to retain its competency in the market among other contenders (Johansson, 1997). Moreover, introduction of innovative products might easily satisfy the requirements of the customers of varying life styles. This clearly states that globalization integrated all the states and nation into one economy. Impact of the Key Drivers of Environment All the above mentioned factors offered significant impact on the below stated points- The world trading system- in order to cope up with the competitive challenges, maximum extent of the organizations desired to introduce varied types of inventive products at lowest possible price. Only by maintaining this strategy, the market value and share price of that organization might remain in a stable position as compared to others. Along with this, the export and import facilities of the organization might get enhanced to a certain extent as compared to other rival players. And so the brand image and reputation of the organization might remain stable in this extensive competitive scenario (Porter, 1986). The business strategy of today’s US-based global corporations and their European counterparts- to substantiate the negative impacts of globalization, maximum extent of US-based global organizations desired to implement survival strategy. According to this strategy, higher concentration is offered over the research and development department so as to invent, varied eye-catching products. This might prove effective in fascinating varied types of customers thereby amplifying its profitability and market value (Higheredl, 2010). The world monetary system- in order to maintain the financial system of the economy in a stable condition, varied types of laws are introduced. These laws proved extremely effective in maintaining a proper wage structure for the employees of the organization thereby stabilizing their living standard. And it might also reduce the discrepancy among rich and poor within an economy (Highered. Mcgraw-Hill, 2012). Global commodity prices-the prices of all the commodities are determined in such a way so that it might be availed by the individual of varying living standards and income groups. Only then, all types of products might be easily used by all individual, thereby amplifying the brand image and reputation of the brand in the market among others. Along with this, the profitability and total sale of the products of a specific brand might also get enhanced thereby amplifying its dominance and sustainability in the market as well (Aicpa.org, 2010). Therefore, it might be stated that, the impacts of globalization might be stabilized only by presenting the products at competitive price. Conclusion Conclusively, it might be stated that the strategy of competitive pricing acted as a backbone that easily mitigated the impacts of globalization from the economy. As a result, it helped in integrating all the nation and states into a single economy, thereby reducing all sorts of discrepancies and negative impacts. And, the financial condition as well as the economic prosperity might also get enhanced, which is extremely essential in this aggressive scenario. References Aicpa.org. (2010). Global Trends 2025: A Transformed World. Retrieved from: http://www.aicpa.org/research/cpahorizons2025/globalforces/downloadabledocuments/globaltrends.pdf. Highered. Mcgraw-Hill. (2010). International Business. Retrieved from: http://highered.mcgraw-hill.com/sites/dl/free/0071088059/933454/IBChap1.pdf. Highered. Mcgraw-Hill. (2012). Globalization. Retrieved from: http://highered.mcgraw-hill.com/sites/dl/free/0078029244/935561/Chapter01.pdf. Johansson, J, K. (1997). Global Marketing: Foreign Entry, Local Marketing, and Global Management. New York: McGraw-Hill. Porter, M, E. (1986). Competition in Global Industries. New York: Springer. Porter, M., E. (2008). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Springer. World Trade Organization. (2008). Globalization And Trade. Retrieved from: http://www.wto.org/english/res_e/booksp_e/anrep_e/wtr08-2b_e.pdf Read More