Global Context of Management - Essay Example

Industry/Country Global context of management-Laptop in USA] [Name] [Course] [Lecturer] [Date] Effects of globalization The PC industry in US has experienced tremendous growth as a result of globalization. Computer hardware has become cheaper over the past decades with reduction in price by 10%-30%. This has come as a result of globalization in production and the growing demand to have smaller, cheaper and more powerful hardware hence increasing innovation in software, hardware and other computer services. Although globalization has contributed majorly to the growth and innovation of the US PC industry, the relevant key players in the industry still have many concerns about globalization. The industry is threatened by the decreasing prices of the hardware and majority of the firms have registered losses in the recent past with some having to close down. As a way to counter this problem, the government of US is working closely with the universities to bring out more skills in the field of IT in order to be at par with the growing demand of more sophisticated machines. The market for the US PC industry products has also been severely affected by other global competitors such as India and China. Currently, China is considered as the leading innovator in the technological world and this has posed a great threat to the laptop industry in US since China is now able to produce highly competitive products compared to those of the US (Hirscheim et al 2009). Global division of labor has also benefited the PC industry in US in many ways. This international collaboration has supported rapid integration of advanced technologies and quicker innovation of computer products. Most of the PC firms in US have moved their development tasks to Asia while the work involved in early-stage development and designing of products is done in the US. Finally, the consumers of the laptops all over the world, including those in United States, are on the receiving side with the ever decreasing prices in hardware, software and services which is a product of globalization (Macher and Mowery 2008). Economy forecast Clearly, the US economy has been projected to grow at a GDP rate of 4.81 to 5.09 percent annually. The GDP is expected to be US$ 1.122 trillion by the end of 2015. The GDP per capita is forecasted to enjoy a healthy growth. Despite this, different global factors have affected the PC industry from growing. The slowing global economy that has been experienced from 2008 has had an impact on the spending on business capital in the small and large corporations. American PC manufacturing has had a decline of approximately 3.8% in the spending on the IT products. The computing spending on hardware is expected to have a decline of approximately 14.9%. Since 2010, the decline has reported steady recovery in the global PC market is expected to decline from 5.4% to 4.1% in 2012 (Americans Digital Economy). GDP projection for the USA between 2005 and 2012 Currency is an important part as the PC manufacturing companies depend on global sales that are mainly determined by the exchange rates of the currency. The weaknesses or strengths of the dollar are expected to have an impact on the sales and manufacturing trend of the PC. The American forecaster also predicts that the market is also going to face stiffer competition from the emergence of small developing country economies like China, Brazil, Latin America and even India. It is even more complicated as forecast shows that some markets in most of the developed countries has become saturated thus the penetration of the products may face competitions that are hard to penetrate. This implies that the companies will have to dig deeper into their marketing reserves to be able to convince the buyers to buy their products (American Digital Economy). Ecological and environmental challenges The toxic materials and gases produced in the manufacture of the products has also had a negative effect to the environment as massive toxic gases and waste products are deposited in to the rivers and other water bodies. The effect of this has resulted in to global warming and change in the weather patterns as a result. The drastic change of climate has made it even difficult for the meteorological department to be able to predict the weather patterns and thus have witnessed a reduction in the agricultural production (Widmer, Oswald-Krapf, Sinha-Khetriwal, Schnellmann, & Boüni, 2005). It must also be addressed that the materials used in the production and manufacturing of the computer products have not been disposed off well. The companies have not had a proper green mode of depositing the wastes for it not to have serious and adverse effects to the environment. this has led to the destruction of the soil as well as the microorganisms found in it which are essential to the environment (Magalini & Huisman, 2007). It is evident that the laptop and PC industry in US is being faced with major ecological and environmental challenges. To begin with the industry is blamed for the for the continual disposal and uncertified recycling of computer products and materials which have negative impact on the environment and the human health. The industry has been blamed for the depositing of the ferrous and non ferrous materials in the environment (Ogilvie, 2004). Secondly the industry has been blamed for the increased lead and other metals like, cadmium, mercury and hexavalent chromium materials that have adverse effects of lead poisoning. The metallic materials have not only had serious effects to the human population but also the wild and animal population (Magalini & Huisman, 2007). Political Factors American political environment has been gradually changing. According to Gartner (2009), laptop PC Industry being a major part of the American economy has greatly been affected by these changes in the political environment. Clearly, increase focus on environmental effects of high-tech trash has resulted to implementation of environmental regulations on this industry. Political environment within the America have been directly involved in certification and testing thus affecting the supply chains for PCs and laptops increasing cost to this industry. Further, environmental policies have affected the industry in that; the industry is facing pressures from environmental groups to assume responsibilities for its old products (Gartner 2009). Government In every given business environment, the government plays a major role in the way business is operated. Gartner (2009) asserts that, the current changes within the American government policies are widely affecting the potential growth rate in the laptop and PCs market. These policies created by the government are important since they help to regulate computer market structure thus ensuring competitors are not creating competitive advantages in the expense of the general public(Gartner 2009). Legal Metafacts (2009) maintains that, within the PC and laptop industry, legal factors are very essential since it is observed that organizations are expected to work within distinctive legislative factors. Within this industry, legislation constantly hinders computer business by placing tedious obligations. These obligation forces the PC and laptop industry look for alternative methods of establishing computer markets and target groups. Legal factors are also fundamental since these factors assists in creation of market conditions which usually benefit business (Metafacts 2009). Technological advances Within the PC and Laptop Industry, there are several technological advances that influence that development of the industry especially in the America. Rose (2001) asserts that, changes in technology are happening at a very fast rate. Due to fast rate the industry is being forced to increase its product line. The industry is adopting technological changes as its past technology is gradually becoming obsolete. The most notable technological advances within the industry are that it has increased the demand of computers through the use of direct business model (Rose 2001). This has further resulted to improve on the industry e-commerce capabilities which can be observed in many PC and Laptop Companies within the America. Further, technological advances such as reduced cost, standardization of Intel and Window and increased processing power possessing low power consumption are the fundamental reasons for the current increase of laptop segment as opposed to the PC industry. Rose (2001) maintains that, it is evident that such advances are expected to constantly change in the near future. This is because new technologies such as Hosted Virtual Desktops (HVD) are placing a threat of entirely changing the industry dynamic especially due to the possible emergence of cheap computers accompanied with cheap software. Estimates indicate that HVD market is expected to raise $1.3 billion revenue in 2008 to $65.7 Billion in the year 2013. This is because HVD consists of a centralized computing whereby processing is done on servers as opposed to an individual client. Elements of culture and society that have affected PC and Laptop Industry It is quite evidence that there several aspect of culture and society within America that have great significant impact or influence on the industry. According to Comai & Tena (2007) within the society factor such as preferences, education, income levels and cultural factors that constantly influence demand pattern which varies in different region within America. Income level and education level within the society affects more on brand perception of computers producers. Research indicates that households that are considered to have higher income have higher percentage of laptop possession as compared to PCs. This have forced the industry to formulate strategies in premium pricing and performance as compared to windows PCs while within the same time gradually increasing the market share of laptops. Based on cultural aspects, it is evident that different regions widely affect the occurrence of seasonal sales which widely affects the performance defined by the PC and Laptop Industry (Mindtools 2007). For instance, in America the industry experiences increased sales during December due to the festive season and during august when students are opening or reporting back to school. It is similarly evident that changes in cultural and societal elements are likely to change in the near future due to improved quality education. This symbolizes that education level is likely to affect both preference and product demand within the industry. Conclusion It is evident that political, government, legal, technological, social and cultural factors play significant role within the PC & laptop industry. It is therefore important for this industry to utilize the above described factors to their benefit as well as greatly understanding market trends and forecast. 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Washington D.C. : National Academies press. Magalini, F. & Huisman, J. (2007) Management of WEEE & costmodels across the EU: could the EPR principle lead US to a better environmental policy? In: Proceedings of the 2007 IEEE international symposium on electronics and the environment. 143–8. http://www.regconnect.com/content/isee/ Metafacts, 2009, Just How “Different” and Elite Are Apple Customers - Socioeconomically, Behaviorally, and Attitudinally? http://metafacts.wordpress.com/2009/04/05/just-how-different-and-elite- are-apple-customers-socioeconomically-behaviorally-and-attitudinally/. Mindtools, 2007, SWOT analysis: discover new opportunities. Manage and eliminate threats www.mindtools.com/pages/article/newTMC_05.htm Ogilvie, S.M. (2004) WEEE and Hazardous Waste. AEA Technology Environmental, Oxfordshire. Realff, M. J., Raymond M., Ammons, J. (2004) E-Waste: An Opportunity, Mater 7 (1), 40. Rose, K. 2001. Squeak: open personal computing and multimedia. New York: Prentice Hall Widmer, R., Oswald-Krapf, H., Sinha-Khetriwal, D., Schnellmann, M. & Boüni, H. (2005) Global perspective on E-Waste. Environmental Impact Assessment. Read More