Introduction
Globalisation has existed since the ancient period, with notable changes in the system taking place as countries grow and develop. Michie (2019) denoted that globalisation is the interdependence of the global economies, which works through cross-border trade in products, technology, movement of investment, and information. Various nations have developed partnerships and economic groups to facilitate the process of globalisation. Policy structure that considers different countries’ economic, social, and political structures are the pillars governing globalisation. Since its beginning in the ancient era, when the movement of goods and people began, the significant impact of globalisation in the global economy took a steady path in the 20th century. Many multinational corporations function in the current global economy through the guidance of globalisation. Advanced economies such as the U.S., Canada, the U.K., and Japan have dominated the international exchange of goods and services for decades. However, the emergence of China, Russia, and India, among other emerging economies, has changed the playground in international economics by imposing a competitive advantage on various countries around the globe.
The concern is whether globalisation is dead, alive, or experiencing difficulties. O’Sullivan (2020) suggested that globalisation is dead and countries should focus on incorporating a multipolar world. As predicted by O’Sullivan (2020), the multipolar world will acquire dominance from the America, China, and European Union regions. However, that does degrade the remaining regions in the globe as they still will play a significant role in the functionality of the multipolar world. Another concern O’Sullivan (2020) raised is the monetarism activism that countries, through their financial sectors, have imposed on their economies. The derivation of political concern that surrounds the multinationals has created tension in the expansion and operations of such corporations, thereby jeopardising the normalcy of globalisation. Power (2023) established that current events, like the breakout of the Covid-19 pandemic, the Russia-Ukraine war, Brexit, and the tension between the U.S. and China, are some of the concerns that are killing globalisation.
Impact of Globalization on Marketing Strategy
Petersen et al. (2020) derived that for the period 1990-2018, Japan was the country that realised the enormous globalisation-induced growth in real gross domestic per capita, with an approximation of €1,790 followed by Ireland and Switzerland at €1,610 and €1,580 respectively. However, the report acknowledged the slight decline in globalisation since 2007, when the global economy experienced a financial crisis caused by the collapse in the housing market in the U.S. A summary of the data analysis on globalisation for 1990-2018 is shown in Figure 1.
Figure 1: Globalization Data 2020
The line graph in Figure 1 provides an overview of the decline in globalisation after the 2007 financial crisis. Also, the tabulated table gives the difference in changes in the globalisation index, with a significant depreciation occurring after 2007 as indicated in the nine list countries of Netherlands, Ireland, United Kingdom, Germany, USA, Romania, Japan, China, and India. With the changes in globalisation depicted by Petersen et al. (2020), the urge to narrow its influence on marketing strategy is vital as Naghi (2013) denoted that the contemporary companies that produce products for global consumption face stiff competition in the international market that demands dynamic global marketing activities. The process has created consistent amendments to the marketing policies and agreements between countries. Governments have introduced regulation measures to trade, with others like Russia imposing a total burn on genetically modified food products from sales in the country. Such adjustments in restriction, along with geopolitical status, impose a significant threat to globalisation.
Opportunities
Mathew (2023) established that globalisation comprises the interconnectivity and independence of global businesses, which requires an international marketing strategy to function effectively and efficiently. Countries apply different marketing plans that cover price, product, distribution, and cultural strategies. In the effect of opportunities, globalisation significantly influences contemporary businesses as they seek to enlarge their reach and capitalisation. Therefore, as globalisation supports, some existing opportunities in the international marketing strategy include increased competition, consumer awareness, new technology, cost reduction, and expansion of reach.
With the increased flow of information between countries, globalisation has created vast opportunities to explore the invention of new technology. Technology-augmented production is the current norm in various economies. Countries like China, Japan, the USA, and the United Kingdom, among other countries, are trending as the leading applicants and inventors of new technologies in the market (Dechezleprêtre et al., 2011). Access to various technologies has created new and effective marketing techniques and is efficient in covering a large population of the globe. Some of the better marketing techniques include introducing digital marketing with connectivity through digital gadgets and the Internet of Things. Bala and Verma (2018) denoted that digital marketing is flexible and cost-effective, with the target population enlarged, unlike traditional marketing techniques. Digital technologies have created marketing process automation that applies new marketing technologies through globalisation.
Globalisation creates the opportunity for firms to reduce costs or production. Through trade and interaction by the movement of people from one region to another, the companies can access production raw materials from various countries, which creates a negotiation advantage for that raw material and further lowers the production cost. Human capital is another vital input in producing goods and services (Ferguson & Reio, 2010). With the help of globalisation, human capital has been moving from one country to another, and people learn and acquire vast production skills, which regulates production costs through lowering wage rates (Brown & Lauder, 2001). Mathew (2023) denoted that outsourcing material and labour creates marketing aspects that reflect on the quality of final products. Also, technology has supported efficient marketing that lowers the cost of resources applied to impose fair prices on commodities in the global markets.
Globalisation creates increased competition for businesses through access to multiple markets worldwide. The stiff competition forces firms to develop compelling marketing strategies that differentiate them from their competitors. As firms compete on the global rather than the local stage, they intend to adjust their product quality to match the stiff competition and gain market advantage. The theory of comparative advantage applies in such cases as firms tend to major in producing those commodities they hold the advantage in to ensure they capture new markets and expand dominance in the existing markets (Mathews, 2002). In addition, businesses must pursue trends in the global market to stay ahead of the possible competition. With the urge to remain competitive in the global market, businesses have to work brilliantly and complicated in the presence of competitors that also intend to copy any new idea that gives an advantage in the market.
Another opportunity provided through globalisation is increased consumer awareness. The movement of products and people between various countries creates an increased audience targeted by the producers. Global digital connectivity has created the opportunity for commerce, which is vital in boosting the growth and development of countries. With access to a broad market through e-commerce, the marketing strategy influences product prices as consumers can choose to buy goods from one country to another (Le & Liaw, 2017). The possibility of moving goods directly from production units to consumers through the connections of e-commerce is a game changer in the marketing strategy for companies and consumers. Consumer awareness increases the bucket for choices of goods and services. Therefore, consumers are likely to choose goods and services of preferred quality, as depicted by their ability to purchase such products.
With the derived globalisation opportunities and their relations to international marketing strategy, the other side of the analysis that posits that globalisation is dead provides the threats to globalisation with such focuses based on the contemporary situations that have created fear of depletion of globalisation.
Threats
Several threats have emerged that are making globalisation seem impossible in contemporary society. Concerns related to political instability, protectionism, nationalism, pandemic, climate change, and income inequality are imposing a deathbed for globalisation (Agwu, 2021). Even though the situation worsens, countries are making progressive agreements and friendships that can consolidate the trend for future trade patterns. The need for new international economic order is viable as countries depend on each other for survival.
Globalisation faced an upsetting situation during the breakout of the Covid-19 pandemic. The pandemic caused the close of businesses and the movement of people from one country to another also stuck as people embraced the lockdown policies introduced by various governments as the mitigation procedure for combating the spread of the Covid-19 virus (Debata et al., 2020). The pandemic not only closed globalisation but also disrupted the domestic production process. The global economy was set on depression, negatively affecting production, investment, and social aspects of life. Statista Research Department (2023) reported that even though it is hard to derive the exact damage caused by covid-19, the approximate show that in 2020, the global gross domestic product (GDP) decreased by 3.4%. However, the economic recovery in 2021 saw the global GDP increase to US$92.3 trillion from US$84.54 trillion in 2020. With such a positive recovery trend, the globe experienced another unexpected shock ignited by political instability between Russia and Ukraine.
Political instability covers a variety of conflicts between countries, regions, or at worse global conflicts. Such conflicts include civil wars, terrorism, and regional wars, which all negatively influence trade. The current political instability that has affected globalisation is the Russia-Ukraine war. The conflict has ignited oil price shock in the international market (Ben Hassen & El Bilali, 2022). Since oil is a significant input in the production of goods, the cost of production has increased and subsequently increased prices of commodities worldwide. Such influence directly relates to the international marketing strategy because businesses have to adjust their price strategy to meet the cost of production and maintain the market advantage. The political instability has changed the trade treaties between countries, like the case of Russia and the Western region, in which the West has imposed sanctions on Russia to reduce its political power and manage the conflict in Ukraine. However, such policy affects other countries that trade with Russia in various capacities making the entire globalisation a complex process to facilitate in the current world.
Climate change is another serious threat to globalisation. The impact of climate change on the production of food and other manufacturing products is a concern that the world has noticed, and it is working on the mitigation processes that champion clean energy in the production process (Mills, 2009). Food shortage that has resulted from climate change has ignited price strategy in international marketing. With producers targeting to make profits, the need to adjust food prices because of low supply is an economic basis from the laws of demand and supply. The theory of market equilibrium posits that whenever the supply is low, the prices of commodities shoot upwards because of the increased demand. Climate change, particularly global warming, threatens people and deters them from moving across the world. The basics of globalisation denote that the process involves the movement of people from one region to another as they facilitate the exchange of goods, technology, information, and culture. However, in the presence of global warming, people will fear travelling to severely affected regions. The current global warming situation is the instance of Italy’s prevailing temperatures rising for the better part of 2023 (Gayle, 2023).
Protectionism and nationalism are other forces that can terminate globalisation today. Countries have launched a trend of imposing tariffs, quotas, and import bans on various commodities. For instance, Russia has banned the importation of GMO food in the country (Peter, 2015). Such moves have limited globalisation more negatively. Nationalism through movements or sentiments can hinder globalisation. For instance, the sentiments by China about the dollar’s dominance in international trade have ignited a global debate that has seen countries like Russia, Brazil, and India, among others launching new trade agreements that do not involve transactions in dollars (Admin, 2023). The concern about income inequality that can persist because of globalisation threatens the system. Globalisation can induce wages to drop in advanced economies while maintaining low wages in developing economies (Stockhammer, 2013). Since governments work through fiscal and monetary policies to control wages in a manner that seeks sustainability, globalisation can challenge such initiatives and make developed countries lose their worth in the labour market.
Practical Recommendations
With the current concerns about globalisation, such as the impact of climate change, geopolitics, the hegemony of dollar and euro currencies, protectionism, and nationalism, globalisation is in limbo. A practical move to save the international market requires the constitution of a new system that caters to every country globally to draw benefits and manage their economy in a more structured manner. Some practical recommendations that can save international trade with attributes of international marketing taken into consideration include the removal of dollar hegemony, the embrace of technology, and the global redress of climate change, among other measures that can sustain the functionality of the international market.
Establishing new currencies for regional and global trade should be the priority. Currently, the U.S. dollar is the dominant currency for international trade. In fact, for several years, the dollar has been attached to the oil trade globally. Until recently, countries like Russia and China dropped oil transactions using the dollar and now apply Yuan (Aizhu, 2023). Other developing countries intend to join the trend and formulate bilateral means of trading without applying the dollar as the intermediate means of exchange of goods and services in the market. Regional trade involving countries within the same continent should apply a common currency to transact goods and services. Therefore, continents like Africa, Asia, and South America can each create a single currency that every country can apply, just like the case in the U.S., where the dollar applies in every state, and the management of the monetary system lies with the federal bank.
The global mitigation for climate change is an imminent concern that every country should join by contributing resources to ensure that the process of launching clean energy is realised by 2050. Industries should engage in carbon control and other pollution controls that have deteriorated the ecosystem. Even though countries cannot contribute equal resources to facilitate the mitigation process, countries with vast capacities, like the U.S., U.K., Japan, and Canada, among other G7 members, and the BRICS members, should lead the process. Furthermore, the need to embrace new technology, like using electric vehicles instead of fuel combustion vehicles, is a trend that can regulate carbon emissions and control for further deterioration of the global climate.
In the face of protectionism, introducing regional markets is another solution to embrace the functionality of the international market. Since regions can function with a single currency as proposed in the first stage, the urge to avoid a solitary market is a direct link to an international marketing strategy through which the members of a given region, like the case of the U.K. market, provide multiple market choice that can sustain producers and consumers if globalisation fails to function. Therefore, regions like Latin America, the Middle East, Africa, and Asia can form a regional market structure that allows for trade with a single currency, which is not the dollar or euro, as has been dictated in the past by the dominance of the dollar in the international market.
The ongoing geopolitics in different parts of the world requires a harmonious approach to settling disputes and embracing peace and unity. The exploitation that some countries like France and the U.S. have remitted to regions like Africa and the Middle East should stop because those invasions, which those powerful do in the course of mining minerals, have ignited constant conflicts in some countries. For fair trade, advanced economies like the U.S., the U.K., and other Western powers should allow the Middle East, Africa, Asia, and Latin America to conduct mining for the minerals in their countries and then trade them on a fair marketing scheme that does not involve exploitation and geopolitics.
Conclusion
For an extended period, globalisation has provided significant growth in the world. The expansion created by international marketing has helped multinational corporations to function effectively and efficiently as they can access materials for production and a ready market for the produce. Globalisation has given consumer awareness to which the advantage relies on the consumption choices made by consumers in the market. A direct link for the control of product, price, people, and place in the marketing strategy applies globalisation initiatives. The availability of various products in the markets through globalisation affects the price strategy in international marketing. Also, the product strategy, particularly the production quality, depends on the provision of inputs through the supportive model of globalisation. Therefore, globalisation holds a significant positive impact on the international marketing strategy, and it is viable for countries to formulate new mechanisms of embracing globalisation instead of letting it die as purported by the new trends in the world of trade.
In the contemporary view, globalisation is dead. The collapse of globalisation arises from geopolitics, climate change, protectionism, and the pandemic, among other challenges that have imposed the decline of globalisation since the 2007 financial crisis. The tension between China and the U.S. has triggered the multipolar system where various countries are now emerging to support either side of the trade giants in the world. Currently, China is fighting the U.S. dollar hegemony while maintaining the lead in the product market. The U.S. has controlled the money market for several years, and its economy depends on the dollar’s applicability in international trade, particularly oil trade. With the challenging effect coming from China, Russia, and India, among other emerging economies, the fate of globalisation is still being determined. Therefore, the need to formulate a new multipolar order for international trade is viable, considering the tensions in the global market. The prevailing situation, like protectionism and nationalism, has also created a split in the functionality of globalisation as developing countries now call for bilateral trade deals that they demand should hold countries at equal levels for fair trade. Therefore, with an imminent solution to the existing problems in international trade, globalisation is alive.
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