The Impact Of Globalisation On Business: Analysis Of Samsung Company
Introduction
Globalisation is termed to as the process by which the world is becoming interconnected due to advancements in the levels of technology, cultural exchanges, and international trade. With the rise in the competitive intensity in various sectors around the world, most companies have started changing their business models with the aim of maintaining their sustainability in the markets. Some of the benefits of globalisation include free movement of goods services, an increase in the productivity of firms and the strengthening of the global market. However, globalisation has been linked to drawbacks such as stagnation of the local economies, social injustices, imitability of products and services and unfair competition. In this essay, the focus will be directed on globalisation and its impact on some of the stakeholders for the Samsung Company. Globalisation has both positive and negative impacts on business and organisational performance.
Drivers of Globalisation
Technology: Advancements in the levels of technology have facilitated the displacement for good from one country to the other. Through e-commerce, a consumer can purchase products from a company in a foreign country and have them delivered within the agreed time.
Converging consumer tastes: Customers will always prefer purchasing products from companies that meet their needs. Most companies have taken advantage of the rise in consumer demand to expand their operations into various countries around the world.
Trade liberalization: Trade liberalization is a major driver for globalisation in that it encourages interdependence and the supply of goods and services among countries. The efficiency in the flow of goods across borders provides companies with the opportunity to bolster their financial performance.
Communication and transport: The rise in the popularity of social media has led to an improvement in social networking. Transportation networks have been expanded significantly in the past two decades, and these are characterized as major drivers of globalisation.
Background Information on the Company
Samsung Company is a South Korean technology Company that has its headquarters in Samsung Town, Seoul. Having been in operation for the past eight decades, the company has experienced significant growth. The success of the firm has been attributed to factors such as the hiring of skilled and qualified workers, keeping up with the pace of the ever-changing technology and investment in Research and Development. Some of the products for the firm include automotive parts, electronics, medical equipment, and semiconductors among others. Service offered by Samsung includes advertisements, construction, hospitality, and financial services. Lee Kun-hee is the chairman for the company while Lee Jae-yong serves in the capacity of the vice chairman. The two leaders are tasked with the role of ensuring that the employees meet the set goals and objectives for the firm.
Impact of Globalisation on the Stakeholders of Samsung
Samsung is among the tech companies that have benefited immensely from globalisation. In the past two decades, for instance, the firm has expanded into various countries around the world. Advancements in the levels of technology have created a platform for enhancement in the sales of the firm in the countries where it has operational bases. Globalisation has stakeholders directly for the company both positively and negatively.
Consumers
The consumers of Samsung around the world have been affected both positively and negatively. Globalisation has made it easy for Samsung to have a close relationship with its customers. Currently, the company has retail stores in estimated 200 countries where customers purchase newly-launched Samsung smartphones or electronic gadgets. In the event of grievances, consumers hardly have to contact the headquarters in South Korea. Customers are usually advised to visit the retail stores and will have their issues addressed.
With the aspect of globalisation, the supply chain for Samsung has also been enhanced. A consumer in Ghana, for instance, can now purchase the latest Samsung Galaxy S8 on Alibaba and it will be delivered to him or her within the shortest period. Convenience has been brought to the doorstep of the customers because of their ability to purchase products from various online platforms. Due to globalisation, importation costs for some of the firm’s products have declined significantly, and this has in return been beneficial to customers.
Globalisation has also had a negative impact on Samsung consumers. With the aspect of globalisation, there has been an influx in the electronic devices for the firm. Consequently, this poses a major environmental risk to the global population. A country that is faced with high pollution rates exposes its civilians to health hazards. Samsung products are made from a non-biodegradable material, and when they are not properly disposed of, they may have negative environmental effects. Another major negative impact of globalisation on the consumers of Samsung is that it has provided them with an opportunity to access information from the rival firms with ease. Some of the customers have since shifted their loyalty from Samsung to Apple and Oppo brands.
Suppliers
Suppliers are another group of Samsung’s stakeholders that have been affected by globalisation. The company maintains a good relationship with its suppliers, and this has since had a positive impact on its productivity. In the modern day, suppliers can easily deliver raw materials to the company, and this is attributed to the advancements in the levels of technology. Samsung sources its raw materials from Europe, the U. S. , and Africa. Globalisation has created a platform for the efficient delivery of the products to the various Samsung plants.
Another major benefit for globalisation to the suppliers of Samsung is that it has improved the communication between the firm and the suppliers. Before the discovery of the internet, it was hard for the suppliers to deliver messages to Samsung on the types of products at their disposal or their prices. However, in the modern day, the suppliers can log into the webpage for Samsung and communicate with representatives from the firm. Moreover, improved communication because of globalisation has bolstered the ability of the suppliers to deliver the right types of raw material to the company within the agreed time.
Globalisation, on the other hand, has had negative impacts on the suppliers. Samsung has on several occasions been criticized for favouring suppliers from the developed country and under-paying suppliers in the developing countries such as Congo. From a broad perspective, this affects both the suppliers and the economies of their country. Moreover, globalisation has simplified the ability for the Samsung’s rival firms such as Apple Company to snatch its suppliers. By convincing the suppliers with better pay, Apple has been criticized for eating into the supplier-base for Samsung.
Conclusion
Globalisation has in the past two decades gained immense popularity. Some of the major drivers of globalisation include advancements in technology, trade liberalization, international investments, and communication. Samsung is among the companies that have benefited from globalisation, and this is evidenced by its global dominance in the tech sector and the strong financial performance. Stakeholders for the company such as consumers and suppliers are directly affected by globalisation. The level of communication between the company and its suppliers and consumers has increased significantly due to globalisation. The same case applies to the delivery of raw materials by the suppliers and finished goods to the consumers. However, globalisation has led to a surge in environmental degradation and the rise in cases of shifting of consumer and suppliers’ loyalty from Samsung to its competitors such as Apple.
Reference list
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