Definitions And Concepts Of Globalization Commerce Essay

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Globalization is a system in which it refers to reduction and removal barriers between national borders of the countries in order to facilitate the flow of capital, goods and labor. It's a combination of technological, political, economical , and biological factors.

To develop the global economy globalization is a system of interaction among the countries. Globalization refers to the integration of economics, and societies of the world. Globalization involves technological, political, economic and cultural exchange made possible largely by advances in transportation, infrastructure and communication.

globalization increasing integration of economies and societies around the world, transcending the boundaries of the nation state, particularly through international trade and the flow of capital, ideas and people, the transfer of culture and technology, and the development of transnational regulations.

Effects of Globalization

According to economists, there are a lot of global events connected with globalization and integration.

It is easy to identify the changes brought by globalization.

1.   Improvement of International Trade. Because of globalization, the number of countries where products can be sold or purchased has increased dramatically.

2.  Technological Progress. Because of the need to compete and be competitive globally, governments have upgraded their level of technology.

3.  Increasing Influence of Multinational Companies. A company that has subsidiaries in various countries is called a multinational. Often, the head office is found in the country where the company was established.

An example is a car company whose head office is based in Japan. This company has branches in different countries. While the head office controls the subsidiaries, the subsidiaries decide on production. The subsidiaries are tasked to increase the production and profits. They are able to do it because they have already penetrated the local markets.

The rise of multinational corporations began after World War II. Large companies refer to the countries where their subsidiaries reside as host countries. Globalization has a lot to do with the rise of multinational corporations.

4.   Power of the WTO, IMF, and WB. According to experts, another effect of globalization is the strengthening power and influence of international institutions such as the World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank (WB).

5.   Greater Mobility of Human Resources across Countries. Globalization allows countries to source their manpower in countries with cheap labor. For instance, the manpower shortages in Taiwan, South Korea, and Malaysia provide opportunities for labor exporting countries such as the Philippines to bring their human resources to those countries for employment.

6.   Greater Outsourcing of Business Processes to Other Countries. China, India, and the Philippines are tremendously benefiting from this trend of global business outsourcing. Global companies in the US and Europe take advantage of the cheaper labor and highly-skilled workers that countries like India and the Philippines can offer

7. Civil Society. An important trend in globalization is the increasing influence and broadening scope of the global civil society.

8. Competition. in the new global business competition of markets increased due to the market becoming worldwide , companies have to upgrade their products and use technology skillfully in order to face increased competition.

9. Religious increased interrelation of various religious, groups, ideas, and practices and their ideas of meanings and values of particular spaces.

10. Social including humanitarian aid and developmental efforts develop a system of nongovernmental organizations as main agents of global public policy.

Pepsi profile





Country of origin

United States


1898 (as Brad's Drink)

June 16, 1903 (as Pepsi-Cola)

1961 (as Pepsi)

Related products



Dr Pepper

7 Up

Irn Bru

Cola Turka

Big Cola


Pestel analysis


Pepsi is required to abide food laws and policies with all its ingredients .Pepsi have to pay deposit legislation to the government

Economic conditions

In tight economic conditions people can cut down foodstuff and grocery items. Beverages are also subjected to recession.


At city areas marketing is target where the greater part of the teenage population lives.aim of Pepsi at age, sex not financially level or physical conditions.


Pepsi is in position to implement new technology that improves its products, packing, and other aspects of its operation due to technological change and for improvement in packaging and production skills new ideas of marketing can be produced daily.


The plastic which used in Pepsi bottles increase the pollution in the environment and also cans.pepsi packing cost is 15c per can which is very high.


There are standards to be taken into account to eliminate overnight competitors as well as social implications.

Swot analysis


Brand strength

Strong core brand

Strong existing distribution channel

Strong market position

Strong revenue growth

Economies of scaleFiltered Water makes the production and profit margins a lot greater on their bottled water sales.


Alliances and acquisitions

Bottled water growth

Pepsi's ability to meet their tastes with current product lines .

Growth in emerging markets

Introduction of new products


Concentrated in North America (US, Canada, Mexico), where almost 70% of revenues come.

Health Craze will hurt soft drink sales.

 -Unhealthy snacks


Strong competition

Declining economy/recession

Sluggish growth of carbonated drinks

Coca-Cola & other smaller, more nimble operatorsCommodity price increases, fluctuating oil prices effect production and distribution

Effects of globalization on Pepsi

Globalization plays a significant role and effect to international business. Globalization is threatening the fabric of diversity of cultures. The far ranging effects of globalization policies will not be felt in economics of improvised countries but in the deterioration of local cultures in every part of the world.

There is a sense of uneasiness everywhere. There is a growing fear that the world is moving towards becoming a singular entity where there are no differences. Though equality is a high placed principle, the absence of plurality is frightening. One cannot imagine a world where everyone eats sees drinks and thinks in a same way. The proponents of globalization often point out the improved lifestyles of people, increased buying power and choice, easy access to credit and possession of sophisticated gadgets as the gifts of globalization. The voluminous employment generation is often considered as the boon of globalization. The availability of internationally recognized food products is heralded as a great revolution. What we have to oppose is this tendency of lauding anything which comes from foreign countries

Pepsi has company extensive promise to milieu in providing secure and vigorous environment for the employs and the community. The opposition against Pepsi (and other similar products) is symbolic one. By boycotting the usage of Pepsi we have to send strong signals. In this era of increased customer focus, intelligent buying decision is the best strategy we can employ against globalization. Our ability to stand still despite the glamorized marketing techniques should be our main strength. That is the only way to oppose globalization at an individualistic level.

Pepsi is devoted to scheming , creating and operating amenities that guard the people in the terms of physical resources . Pepsi is committed in reducing the crashing of business in environment through protection and recycle ways. We have to oppose Pepsi at a different level. We have to oppose it because it has taken the market away from local competitors in an unethical way.

We have to oppose Pepsi not because of lab reports or any other technical grounds. We have to oppose it because it is available even in remote villages where there is no proper drinking water. we have to oppose Pepsi is economic reason because the People who are following the developments of Pepsi in India have argued that the manufacturing cost of Pepsi does not go beyond Rs 3/bottle. That means it loots the hard earned money of our countrymen and passes it to its home country. Isn't it a strong reason enough to boycott Pepsi? From small towns and middle class People do not drink Pepsi to quench their thirst but to make a statement. It is this artificial social highness which is induced by Pepsi that we have to fight. If people drink Pepsi as any normal drink we have no problem. But if they drink it just to make a statement then we oppose it.

If Pepsi decided to surmount the international market so there can be options the company will come across and it is important that the management of Pepsi should choose marketing strategy that is better for company to be more competitive as there is providing of needed environment encouraging to marketing activities .

.without having attention and consideration the marketing plan and strategy is not complete. For improving the Pepsi services and products company can use media like T.V for advertisement and also can use internet. These are testing times for anti-globalization supporters. Globalization has become a reality and it is hard to go back. Only one thing that can be done now is empowering people with facts and enabling them take right decisions.

Effects of Pepsi on globalization

When allegations of pesticide contamination were published on the front pages this month in India, Coca-Cola and PepsiCo executives were breezily confident that this was a crisis they could handle.

But three weeks later, they are still struggling to win back the confidence of consumers. Partial bans on their products remain in a quarter of India's states, and a complex legal battle to overturn them is only just beginning. The companies acknowledge that, because of their own miscalculations, things have not gone smoothly.

Coke and Pepsi stumbled badly in their response to the pesticide allegations: they underestimated how quickly this would spiral into a nationwide scandal, misjudged the speed with which local politicians would seize on an Indian environmental group's report to attack powerful global brands, and failed to respond swiftly to quell the anxieties of their customers.

In short, two of the world's biggest brands failed to do what they do best: pitch the virtues of their products directly to their customers. The unfolding battle offers a cautionary tale for multinational corporations doing business in developing countries, especially one like India where political sensitivity to foreign influences is so acute.

In some ways, Coke's and Pepsi's immediate responses came right out of crisis management textbooks. As soon as the Center for Science and the Environment announced that drinks made by the two companies in India contained on average more than 24 times the safe limits of pesticides, both companies knew they were headed for trouble.

They formed committees in India and the United States, working in parallel on legal and public relations issues. They worked around the clock fashioning rebuttals. They commissioned their own laboratories to conduct tests and opted to wait until the results came through before commenting in detail.

This approach quickly backfired: Their reticence fanned consumer suspicion. They became bogged down in the technicalities of the allegations, instead of focusing on winning back the emotional support of consumers.

"They got behind the curve, and now they are chasing the crisis," said Richard Levick, president and chief executive of Levick Strategic Communications, a U.S. company specializing in advising businesses in this kind of crisis.

Coke and Pepsi executives concede that this has been a difficult fight.

"We have some way to go to restore consumer confidence in our brands," said Kari Bjorhus, Coca-Cola's communications director.

Rajeev Bakshi, who heads Pepsi in India, agreed that there was much work to be done. "Has our side of the story got across to the consumer yet?" he said. "Not really. I am concerned about that."

On Tuesday, the companies got a boost as India announced that the findings of the Center for Science and Environment had not conclusively proved that the soft drinks contained pesticide residue. The federal Health Ministry, which constituted a special panel Aug. 4 to look into the center's survey, sought additional details from the group.

"The conclusion of the expert committee is that the report of the CSE does not provide conclusive evidence for presence of different pesticides in the concentration reported," the health minister, Anbumani Ramadoss, told lawmakers in Parliament on Tuesday. He also said the government was seeking to put in place benchmarks for soft drinks sold in the country by January.

When the problem first surfaced, the companies were sure that they knew how to handle it, because this was the second time that they had fought identical allegations. The same environmental group said that it had found pesticide residues in their products in 2003, and lessons from that episode linger. Still, both companies were unprepared for the political controversy this time around.

Within days of the new allegations, first one state and then another announced partial bans on Coke and Pepsi products, preventing them from being sold in government offices, hospitals and schools. Politicians on the left and right instantly exploited the populist potential. The southern state of Kerala, which is left-leaning, introduced a total ban on the sale and production of colas.