Myth of Globalization
The term “Globalization” is not a
new idea to us. It can be traced back to the 60s in the last century when it
was first introduced to the world (Steger, 2010). Under the effect of
globalization, different nations have shared a more standardized and similar
system in terms of economy, education, society and politics etc. Globalization
narrows the gaps among different countries and allows the entire world and
people in different nations to get closer.
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It is believed that globalization
encouraged the international trading among different nations. Companies can
manufacture and sell products globally more efficiently and cheaply. For
example, the increasing trend in adopting outsourcing services reduces the
production cost. Therefore, globalization is supposed to lead to higher
consumption in global products and empower the growth of global companies. However,
the flourish of local flea markets, farmer’s markets, swap-markets etc in the
highly globalized and developed countries, like the European countries and the
USA, does show the opposite: people like buying local products. So is it true
that globalization promotes global products and lead to greater powers for
global companies?
Though globalization benefits
companies by reducing the production cost, it does not guarantee consumers a
cheaper price. In addition, studies show that globalization sharpens the income
inequality and poverty problems to a certain extent (Wade, 2004). Many global
products are still unaffordable to the poor. Therefore, the small-scale markets
like flea markets are still prevalent that people can buy the necessities at a
low price. Globalization may not always bring the advantages to the global
companies.
There is another point. It is a common
view that nowadays global brands take a big part in the everyday consumption.
One can find a great variety of foreign products in a supermarket next-door.
One can say that sometimes our choices are conditioned by the multinationals
that might impose their products to the consumers. Big brands are widely spread
all over the world. We can easily find French shops in Asia and they benefit
from a wide popularity.
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However, flea markets and other
type of local fair still exist in every European country and in the USA. They
take a large part in people's daily life. It is usual to see weekend markets
full of customers buying local production like fruits, vegetables or even
object from artisans. People would buy in the flea markets may imply that they
can find the suitable products only in the local market. Despite of formulating
the global strategies to tackle the business challenges in the global market,
the highly standardized nature of the global products still makes it difficult
to fulfill the local individual’s needs unless the companies can figure out the
strategies to manage market-by-market needs (Sinclair & Wilken, 2009).
We can look at the problem from
the behavioral point of you. Globalization brought standardization of
consumption so people may have the feeling their choices are done for them.
Therefore, they are more and more willing to buy authentic, local products in
order to prove themselves they make their own choices while consuming.
Even if the global processes
facilitate the consumption as more foreign products are brought to the market,
people realize they are more attached to their local production. We can say
that it may be a sort of resistance. They may not want to follow the global
trend and consume in the way they want to.
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It is easy to fall into the trap
that globalization empowers the multinationals to make more profits by selling
their global products. However, the situation is not always true that other
factors should be taken into account like the abilities of the consumers to
purchase the products and how well does the products can meet the consumers’
needs.
Reply to 51440005daydreamer
Hi daydreamer, thanks for your comment. It is true that to some extent local markets cannot compete with the global markets dominated by the international companies because of the limit of products variety. With the huge capital and large market share from all over the world, MNCs really can control the global markets against local market. For example, many people in Hong Kong will buy Coca cola once they want to buy soft drink no matter how many local or mainland china brands are there. This can reflect the truth that MNCs really can totally go into the local markets to influence local people’s buying choice.
The development of globalization has reached the high level already. There must be some global brands in every country every city. We think that the progress of globalization will not stop in the future. The local markets still can survive due to their customization of consumers, familiarity with the local market demand and cheaper prices. Yet, as you said, they can never compete with the MNCs and global markets.
Reply to 40041603_IBstudent
Nowadays, local markets such as flea markets, farmer’s
markets, swap-markets are still in high demand mainly because the products they
provide can meet people’s needs with lower prices. However, international
companies are trying to reduce the gap in order to expand in the local market.
For example, in order to reduce cost, large international companies are using
the new logistics and specializing the production. When going to the local
markets, many companies do researches and make modifications on their products
in order to adapt to the specific markets. In addition, these companies can
make use of their competitive advantages such as economies of scale, good brand
images and so on. Even though the demanding of flea markets, farmer’s markets,
and swap-markets remains very high, will it shrink smaller and smaller as the
technology developing and the globalization going on in the future? Are there
some factors that cannot be replaced by international companies so that these
markets will always be valued by consumers? What will be the globalized market
like in the future? The “invisible hand” – market will give us the answer.
Extension Section and Responses to Comments
Reply to 51440005daydreamer
Hi daydreamer, thanks for your comment. It is true that to some extent local markets cannot compete with the global markets dominated by the international companies because of the limit of products variety. With the huge capital and large market share from all over the world, MNCs really can control the global markets against local market. For example, many people in Hong Kong will buy Coca cola once they want to buy soft drink no matter how many local or mainland china brands are there. This can reflect the truth that MNCs really can totally go into the local markets to influence local people’s buying choice.
The development of globalization has reached the high level already. There must be some global brands in every country every city. We think that the progress of globalization will not stop in the future. The local markets still can survive due to their customization of consumers, familiarity with the local market demand and cheaper prices. Yet, as you said, they can never compete with the MNCs and global markets.
Reply to 40041603_IBstudent
Dear IBstudent
Thank you
for your comment and your point of view is very relevant and clear. However, we
would like to explain that it not exactly what we were trying to say in our
blog. It is not only about the resistance to big multinational companies but
mostly about the fact that some consumers get frustrated about the products and
the y quality they can have in big supermarkets.
Our point is to say that
somehow global companies like Wal-Mart cannot respond to all the consumers’
demand that is why people decide to return to the “basics” and shop in small
markets next to their house. I agree with you on the fact that people will
always go to local markets but not because of some principles, they do it in
order to experience something more authentic than things they can get in huge
supermarkets.
Reference
Steger, M. (2010). Globalization. NY: Sterling Publishing
Company.
Wade, R. H. (2004). Is
globalization reducing poverty and inequality. World Development, 32(4), 567-589. doi:10.1016/j.worlddev.2003.10.007
Sinclair, S., & Wilken, R.
(2009). Strategic regionalization in marketing campaigns: Beyond the
standardization/glocalization debate. Journal
of Media & Cultural Studies, 23(2), 147-157. doi:
10.1080/10304310802710496
Nigel Hollis (2009), Rethinking Globalization
Team Omega,
ReplyDeleteIt might be true that "globalization narrows the gaps among different countries and allows the entire world and people in different nations to get closer", but I believe that this assumption must be nuanced.
Your article made me think just how globalization can sometimes improve our lives, especially for individuals living in developed countries. Indeed, I wondered, without the impact of globalization, how would be my standard of living, and how would be the standard of living of the populations of underdeveloped, developing and developed countries. What objects, products, services would have been unreachable without globalization? Conversely, what local businesses, for example, local markets, sellers of neighborhoods, small local businesses were unable to survive because of globalization?
To sum up, your article made me thoughtful and helped me to realize how globalization, in somehow, can change lives, of our generation at least. This is why I am expressing my gratitude for you Omega !
I fully agree that there is still a great need for the local markets even with the presence of large multi-nationals but even in Hong Kong it is clear that the people who work in these markets actually attempt to capitalize on Globalisation. In walking though the markets of Hong Kong, any food stall which has drinks will usually stock coca-cola which is a global brand and through selling this they are making money from it.
ReplyDeleteIn addition many markets are selling counterfit products, for example it is very easy to buy Beats Audio headphones. A large amount of the people who buy these will be foreigners who see them at a much cheaper price than they can get back home and therefore the markets are only getting this business through brands such as Coca-cola and Beats Audio positioning themselves as a global brand.
This is a very good first blog because I totally agree what you guys opinion. In fact, globalization is helping us together but it is not really helpful to all of us. For example, you guys are talking about how cheaper labor not equal to cheaper product price. That is very correct because I believe most of us are thinking about this situation because we always give out higher price for the foreign product. However, in my opinion, I think that globalization is a good thing is because people are trying to work together even though they are from different countries, they are trying to build up something together, and love to make something happen. But I know that some companies are using this globalized idea to make something bad like cutting people wages, giving them bad working condition and so on. All in all, I like the first blog you guys create.
ReplyDeleteDear Omega
ReplyDeleteThank you very much for your article. Actually it tells me something that I did not know before. I have heard of flea markets, but I did not notice that this kind of markets exist in many European countries and are in high demand.
I have been always thinking that globalization actually narrows the gaps among different countries as it drives many MNCs to import and export products from all over the worlds and makes people’s preferences become similar. However, it may not be the truth. With globalization, people’s references become more and more different as there are many choices we can get, not only from local markets but also from overseas markets. Globalization may narrow some gaps between certain people from different cultures; but at the same time, it enlarges the some gaps between people from the same culture.
Nonetheless, I do agree that many people sharing the same culture will still have similar preferences, and I also agree that they go to this kind of markets due to the lower price. But on the other hand, under the situation of globalization, when we have more choices, it is very difficult for us to find some traditional but unique goods. I am wondering that whether there are some people who like to consume in plea markets showing their interests in those old but unique products that has special worth?
Hello, team Omega,
ReplyDeleteThank you for sharing the myth and the information of flea market. I think that it would be better to pose the name of the myth in the heading or bold the sentence of myth. It is quite confused what the myth is when I am reading the blog.
There are two issues mentioned in the blog that I do want to talk about. Firstly, it is said that some people are more attached to local products and have sort of resistance to global products and global trends. I believe that these people do exist; but the resistance depends on whether you have power to do so. In Hong Kong, we do not have much local products; for example, when you buy a car in Hong Kong, you cannot find any local brand because no cars are made from Hong Kong. Also, when you buy smartphones, you can only find foreign brands in Hong Kong. Hence, I think, as a hongkonger, we do not have much power to resist global products and trends.
Second, in the last paragraph of the blog, you mentioned ‘Are there some factors that cannot be replaced by international companies so that these markets will always be valued by consumers’. I come up with one factor for that - relationship. When buying a product, some people may think of their relationship with the supplier. Just like buying vegetables, some people go to flea market to buy vegetables not because the vegetables provided in the multinational market are not fresh, but because the long-term relationship they build with flea market’s sellers. And close relationship is the kind of factor that international companies cannot replace.
That’s all I want to share. Thank you for reading.
An interesting topic! I agree that local markets are under great impact of globalization. Large corporations enjoy the economics of scale and they can sell goods in a cheaper price.
ReplyDeleteTake Hong Kong as an example, the Link Management Limited introduces big brands stalls into its malls. Those local shops are expelled from its malls. What is left is the monotonic type of brands and large corporations. Most of the local small shops and brands are closed down. The consequence is higher price of goods and services we need to pay. In the past, people paid the products and goods. But now, other than the goods itself, we pay for the “high quality” of services as well.
Hong Kong can be a typical example for this Myth. I think Omega can do some study on Hong Kong market. There are many critics that once all the malls and shops are replaced by big corporation and big brands, citizen will suffer eventually. Is it true? How citizen are being affected? Which aspects affected most? So on.
Dear Omegas :),
ReplyDeleteI'd like to say that the argument presented by you above had me look into a phenomenon which I had never really considered before when thinking of globalisation. Very original!
However there are a few arguments or perspectives I'd like to point out. First of all, I believe it is not a point for discussion whether globalisation promotes global products, of course it does! I also believe that the rise in popularity of 'flea' and other markets is not in any way related to income inequality, especially in developed countries. Flea markets, particularly in the USA and EU, are often seen by buyers as a means of leisure; some take it as a hobby, whilst others tend to see it as a nice way of spending an afternoon. In terms of food related markets and farmer's markets, I would like to point out that actually, in countries such as the UK and USA, the prices for organic, fresh and local produce are generally much higher, meaning that such products are considered a luxury. This is particularly true for more industrialised areas, such as big cities.
I also disagree with the point you've made in relations to the impositions and influences of multinationals on the products consumers demand. The only way for a business to thrive is to provide a service or a product that is in high demand, whether a standard or niche product, demand is the what keeps products "alive". Furthermore, in support of the point above, major food retail outlets in the UK, such as Sainsbury's, Tesco, Waitrose, have introduced their own ranges of organic and fresh local products, proving multinationals respond to customer's demands and not vice versa. It is the promptness of these larger companies' response to such demands that play a threatening role in the existence of these small 'flea' markets; due to economies of scales and other advantages, they can offer customers lower prices and larger ranges of products, threatening to eliminate these markets. 40037988
Hi Omega!
ReplyDeleteYour argument is very interesting! I agree with you that in some industries such as food and retail, local markets are quite competitive in the local markets. But there are still several points that I want to discuss with you.
First, the categories of products provided in local markets are very limited. For example, in the farmer's markets, consumers can only find fruits and vegetables which grow in the local farms. People cannot find fruits grow in foreign countries in local markets. Consumers' needs cannot be fully fulfilled in this situation.International companies, with their efficient logistic systems, can provide more kinds of products with relatively low price.
Second, in some industries, such as clothing and cosmetics, consumer will prefer famous international brands. So I think international companies still have competitive advantages when selling these products.
I believe that local market can still be popular among local consumers because it has its own advantages. People like this type of shopping and prefer the products with lower prices. But these markets which consist of small business will not become the main future trends in global markets. In my opinion,globalization and the growing power of international companies will be the main trend.
Hello Omega!
ReplyDeleteFirst of all, I have to say that I agree with Loner. When I first started reading your paper/article, I was a little confused of what your myth is about. It would really help out if you had made a header for it or pointed it out bluntly.
I agree with most of what you said, concerning flea markets and farmer's markets, etc are a big part of people's daily lives. You can even add in the wet markets that are prominent in Hong Kong and China. Many people prefer to buy their groceries from wet markets everday rather than the super market. And yes, you will find global-wide products at these wet markets and farmer's markets. It is quite inevitable.
However I would have to disagree with your point that people go there for the lower prices. I think wet markets and flea markets do tend to have local products at lower prices but usually not farmer's markets. All the farmer's markets I've been to are usually quite more expensive than what you would find at the local super markets. That is because they tend to be organic. But beyond that, I believe that another huge factor of why people will continue to support local markets is because they know it's more environmentally friendly.
Thank you for the enjoyable article. I found this article easy to relate to, because it discusses something that is near and dear to my heart.
ReplyDeleteMy grandparents established a dried foods and confectioneries shop at the local market in their earlier years, which I might add did quite well at the time, as it allowed my mother and her 5 brothers to go to college.
But recently, things have changed. In addition to the industrial hollowing of the city, a massive department store called "Home-plus" was established in the vicinity of my grandparent's local market, introducing a colossal array of foreign goods, mostly household products and foods. The effect was quite obvious and devastating. As Elena Lombardo has mentioned above, it is often the case that local products cannot compete in terms of price with global products, that take full advantage of economies of scale and experience economies.
So I have to disagree with your statement that "Therefore, they are more and more willing to buy authentic, local products in order to prove themselves they make their own choices while consuming." The cheaper, vacuum-packaged seduction of Home-plus's goods were more than enough to buy over the consumers, and eventually my grandparents had to close shop. Through localization and transnational strategies, joint-ventures with local companies and outsourced production, MNC's are becoming experts at finding local niches and pushing the local merchants (like my grandparents) out of the market. So I believe that so long as the MNC's hold the upper hand in product placement, price and distribution, they will have a dominating sway on consumer demand, and I frankly have to say that your hope that local flea markets will continue to appeal to local consumers (especially the poor) is overly optimistic.
To make the article more engaging, I suggest that you establish your position and myth right off the bat, and give evidence and examples that your assertions that flea markets and farmers markets are still flourishing despite the advancements of globalized products, because this is clearly contrary to my experiences, or that of my grandparents, to be exact.
I apologize if my stance seems overly argumentative, it is not what I intended at all. But I do believe that your article has given me fresh insight into a personal subject for me. Yet I must conclude that I am still to be convinced that globalization has beneficial effects on local artisans and markets.
Hi, team Omega!
ReplyDeleteThanks for your sharing and it is really a great blog. I agree that global companies do benefit from globalization such as reduce general production cost as you have mentioned. Many people believe that the MNCs , such as Wal-Mart, Gap and Nike provide jobs for the workers in the developing country and pay them wages to make them better off. However, the workers haven’t got workers’ rights and are treated inhumanly. For example, Nike paid only US$0.45 perday for their sweat-shop workers in Indonesia in 1991, not enough to maintain the basic living (Roddick, 2001). Others may also consider that MNCs brings advaced technology into developing countries to help them develop. However, the nature of the work is usually low-level. MNCs usually keep knowledge-based, high value activities at homeor advanced countries. In another words, MNCs keep the technology and skill distance between the poor and richcountries (O’Higgins, 2003).
I also agree with you that the local markets are still in high demand. The local companies have a deeper understanding of local demands and culture which MNCs lack. The localized niche markets are difficult for global companies to reach.
In conclusion, in my opinion, MNCs are taking advantage of globalization. However, their powers won’t increase infinitely. There will be a balance between globalization and localization.
References:
Roddick,A.(2001).Take it personally. Austria: Griffin Press.
O’Higgins,R.E.E. (2003).Global strategies-contractions and consequences. Corporate Governance, 3, 3, 52-66.