1) Brief introduction of ourselves
I’m Shantal Lung. I’m a local student from Human Resources Management(HRM) programme. I’m going to finish my bachelor degree this year and start searching for a graduate job in HR or marketing field in Asia-Pacific region, including but not limited to Hong Kong, Singapore, Taiwan and Shanghai.
I am Denise Law. I am a Year 3 local student who is now studying HRM. The reason why I take this course is to understand more about the current topics and management practices globally. As nowadays people advocate the importance of globalization, being aware of international knowledge such as the culture differences of different nations and managing global uncertainty not only broaden my horizon, but also beneficial to my future career. After graduate, I want to know the banking industry and my interest more comprehensively through working as a management trainee in the related industry. My target is to be at managerial level in the future.
I am Poey Tse majoring in HRM from Hong Kong. This is my final year of study. I would like to make use of my final semester to communicate with more foreigners and learn more about different countries culture because I want to join an international company in the future in which there will be many coworkers from different countries. Therefore, I believe that this course can help me to enrich my international knowledge.
I am Denise Law. I am a Year 3 local student who is now studying HRM. The reason why I take this course is to understand more about the current topics and management practices globally. As nowadays people advocate the importance of globalization, being aware of international knowledge such as the culture differences of different nations and managing global uncertainty not only broaden my horizon, but also beneficial to my future career. After graduate, I want to know the banking industry and my interest more comprehensively through working as a management trainee in the related industry. My target is to be at managerial level in the future.
I am Poey Tse majoring in HRM from Hong Kong. This is my final year of study. I would like to make use of my final semester to communicate with more foreigners and learn more about different countries culture because I want to join an international company in the future in which there will be many coworkers from different countries. Therefore, I believe that this course can help me to enrich my international knowledge.
I’m Yuki Yip. I am a year 3 student and my major subject is HRM. I like playing badminton and travelling. In the future, I want to be a successful management so I would like to know more about the international situation and management. I hope I can get a lot from the class such as knowing the foreigner students and exchange our experiences as well.
I’m Rita Lo. I am studying in HRM department. I want to get more knowledge relation to the world from the class. As I want to be a more professional management staff, global management skill and knowledge would help me to succeed my future career. Also, I hope I can know more foreign students in the class so I can learn a lot from them.
2) Explanation of the Group Name
The name of our team is “ELITE” which means that all our teammates are elites and thus we are going to be a dream team. There are 5 letters in the name and every single letter represents one characteristic of our team. The first “E” stands for energetic showing that all of us are full of energy to study and are enthusiastic toward learning. The “L” stands for leadership because we have already got some leadership skills in order to run the team smoothly and we hope that all of us can develop more excellent leadership skills through doing teamwork. The “I” represents intelligence as our teammates are clever and possess knowledge to cope with the team work later on. Then, the “T” means teamwork reflecting that we are willing to show the team spirit to cooperate and collaborate with every teammate. Last but not least, with the above characteristic, we will be qualified to get the second “E” meaning elite. That is why we call ourselves “ELITE” (Energetic + Leadership + Intelligent + Teamwork = Elite)
Despite the fact that we may not fully fulfil the above characteristc at the current moment, we hope that we can improve ourselves to be the real elites via doing the comming team activities and course work.
3) Explanation of the Logo
The logo is constituted of two parts, our group name Elite and a scarlet flame. As mentioned before, Elite is stand for energetic, leadership, intelligence, teamwork and elite respectively. We hope we all can fully fulfill the first four elements in order to be the last red E, which is being an elite person in the global society. Besides, this scarlet and aggressive flame represents our determination of pursuing of this goal. Thus, no matter how hard the difficulties we encounter, we will overcome them bravely and whole-heartedly and our determination is just like this red flame.
4) Our group goals for the class in relation to school, work and life:
4) Our group goals for the class in relation to school, work and life:
As our entire group members are studying in HRM department and we are going to graduate from the university after this semester.
For school, we aim at studying more about global management from the class, we believe that it can benefit us and enrich our international experience. Meanwhile, we can have a broader view to look at the international situation and cases and therefore we can have more point of views in our coming projects and assignments.
For work, we all have projected to upgrade our management knowledge over the world as we want to be a more professional management staff. As we know, only studying the specific HR skills and knowledge such as the recruitment and selection, training and development may be not sufficient to our future career. Living in such an international city like Hong Kong, it is definite to take an action to learn more and know more about other countries that we can search more opportunities around the world.
For life, we want to improve our life standard as soon as possible and we believe that knowing more about the world would be more skillful and easier to broaden our social relationship.For example, knowing more about other countries' culture help us to solve international conflict and get along with foregners well.
For school, we aim at studying more about global management from the class, we believe that it can benefit us and enrich our international experience. Meanwhile, we can have a broader view to look at the international situation and cases and therefore we can have more point of views in our coming projects and assignments.
For work, we all have projected to upgrade our management knowledge over the world as we want to be a more professional management staff. As we know, only studying the specific HR skills and knowledge such as the recruitment and selection, training and development may be not sufficient to our future career. Living in such an international city like Hong Kong, it is definite to take an action to learn more and know more about other countries that we can search more opportunities around the world.
For life, we want to improve our life standard as soon as possible and we believe that knowing more about the world would be more skillful and easier to broaden our social relationship.For example, knowing more about other countries' culture help us to solve international conflict and get along with foregners well.
5) What excites your group most about the weekly topics
We are all interested in those topics related to human resources management, particularly for week 6 topic - Leading and Motivating Workers in International Cultural Contexts. Compared with HR practices, managerial strategies and approaches are much easier to be modified and diffused from one country to another, as well as from one corporation to another successfully. Each county, culture and generation has their own sets of work attitudes,...⋯⋯ styles and values. Any attempt for a single HR management approach across different age groups, different countries within an organization will not work. Therefore, our group is much excited to learn about how the cultural difference influences the ways to engage and motivate workers.
Week 9 topic - Organizational Learning and knowledge management would remain as a hot issue in this century. The ability to consolidate experience, identifying cause-and-effect relationship, and hence creating and sharing knowledge would be essential for organization to gain competitive advantage in global marketplace. We all wish to learn the up-to-date methods in enhancing knowledge creation, learning and sharing in workplace.
Other topics we want to explore include change management, organization transformation and cross-cultural negotiations. Change management and organization transformation are vitual for companies to surive under dynamic global environment. Cross-cultural negotiations skills and tactics are very useful to different situations we probably encounter in the future.
We are all interested in those topics related to human resources management, particularly for week 6 topic - Leading and Motivating Workers in International Cultural Contexts. Compared with HR practices, managerial strategies and approaches are much easier to be modified and diffused from one country to another, as well as from one corporation to another successfully. Each county, culture and generation has their own sets of work attitudes,...⋯⋯ styles and values. Any attempt for a single HR management approach across different age groups, different countries within an organization will not work. Therefore, our group is much excited to learn about how the cultural difference influences the ways to engage and motivate workers.
Week 9 topic - Organizational Learning and knowledge management would remain as a hot issue in this century. The ability to consolidate experience, identifying cause-and-effect relationship, and hence creating and sharing knowledge would be essential for organization to gain competitive advantage in global marketplace. We all wish to learn the up-to-date methods in enhancing knowledge creation, learning and sharing in workplace.
Other topics we want to explore include change management, organization transformation and cross-cultural negotiations. Change management and organization transformation are vitual for companies to surive under dynamic global environment. Cross-cultural negotiations skills and tactics are very useful to different situations we probably encounter in the future.
6) Myth about globalization
Our team is interested in a myth regarding globalization could increase competition and therefore enhance competitiveness. We know that many people dose believe in it. However, our team has reservation about it.
For those who agree with this myth, they think that globalization makes a breakthrough allowing companies to overcomes the geographical boundaries and have expansion.
Let us take Adidas as an example. Adidas enhance competitiveness because they could enjoy the benefit of globalization shifting their manufacturing to low labor cost countries like China and India. Also, they enlarge their customer base by entering into various countries’ market. With larger customer size, they could enjoy economies of scale having an advantage to lower the average cost. Additionally, increasing competition from other global competitors like Nike and Puma motivate Adidas to enhance their competitiveness by creating new competitive advantages like developing new materials for higher quality’s shoes and stylish design to distinguish from their competitors. From this example, it seems that globalization really increase competition and increase competitiveness.
Nonetheless, in our team opinion, we think that globalization is not as fantastic as the example mentioned above. Globalization does bring more harmful effects which people always neglect. First of all, globalization hampers competition because many local small and medium size enterprises (SMEs) are eliminated through competition. They do not have enough capital as well as market influence to compete with the incoming powerful global competitors. Therefore, to reduce loss caused by the decreasing sales, the best way is shut down their business.
A typical example is fast food industry. Many small size fast food shops have shut down these years due to the international competition from McDonalds, KFC, Café de Carol etc. These large size companies sell food in lower price than those SMEs and open as much as branches as they can. Meanwhile, the SMEs cannot offer such a low price and they cannot afford the high land rent boosted by the large companies. As a result, many of them closed down and create oligopoly problems which solely a few large company dominates the market.
Furthermore, after oligopoly phenomenon appears, those dominators have less motivation and incentive to enhance their competitiveness. Eventually, they may on one hand start to lower their quality to further save cost and on the other hand increase the selling price to increase revenue. This problem also applies to fast food industry. For example, the menu of McDonald is more or less the same for many years. Also, they can increase their price frequently. For instance, Café de Carol increased the food price after Lunar New Year.
Indeed, there are a lot of industries facing this problem like convenience store being occupied by 7-11 in Asian countries, toothpaste industry being occupied by Colgate and Hazel & Hawley and even the sport swear industry (occupied by Adidas and Nike) mentioned above etc. All these show that global competition will create monopoly problem and hence reduce competition and competitiveness. As a result, our team find out that the myth (globalization could increase competition and therefore enhance competitiveness) is not true at all.
Extension
In response to the those comments on this blog, we would like to explain more about our myth and points of view.
It is no denying that globalization can help the market to be more competitive that the local quality of goods would definitely be boosted up due to the global competitors. However, we should not ignore that the globalization harms the small budgeted companies especially the local companies because of many global companies established in the same place. To analyze more, try to think of a point, the global companies have lots of capital that they can do marketing and advertising to promote their products. With millions of advertising on the TV, magazines, newspapers and etc...the customers would most likely tend to try the new products mentioned on the advertisements in the global companies. For example, take Mc'donals as an example again, they have made a lot of promotions about their new products quarterly on the TV advertisement, people at home will be attracted with the new promotions and then they will get a try of the products. On the other hand, the small local restaurants just run their business with small budget and their limited loyal customers would be those people living around the restaurant. Although they sometimes would try to copy the products from the welcome restaurants, they were failed to attract much more customers as possible because there is fewer people who know about it and there is not enough budget to promote their products in the market. Thus, the small companies would be affected by global companies as they cannot get more potential customers in the market due to their small capital.
Advertising from global companies has really made much effect to the local or smaller companies. Apple company is an obvious evident to prove that the crowd just pay attention on the bigger companies. Although other companies such Nokia(we are not meaning that Nokia is not a big company, just comparing with Apple.) have done a lot of improvements on their products, the public would tend to only purchase Apple's products as we can see that almost everyone has an iPhone on hand. We now can watch Apple's advertisement on TV, but how about Nokia? Who cares Nokia anymore? Who knows about the new product from Nokia?
Our team is interested in a myth regarding globalization could increase competition and therefore enhance competitiveness. We know that many people dose believe in it. However, our team has reservation about it.
For those who agree with this myth, they think that globalization makes a breakthrough allowing companies to overcomes the geographical boundaries and have expansion.
Let us take Adidas as an example. Adidas enhance competitiveness because they could enjoy the benefit of globalization shifting their manufacturing to low labor cost countries like China and India. Also, they enlarge their customer base by entering into various countries’ market. With larger customer size, they could enjoy economies of scale having an advantage to lower the average cost. Additionally, increasing competition from other global competitors like Nike and Puma motivate Adidas to enhance their competitiveness by creating new competitive advantages like developing new materials for higher quality’s shoes and stylish design to distinguish from their competitors. From this example, it seems that globalization really increase competition and increase competitiveness.
Nonetheless, in our team opinion, we think that globalization is not as fantastic as the example mentioned above. Globalization does bring more harmful effects which people always neglect. First of all, globalization hampers competition because many local small and medium size enterprises (SMEs) are eliminated through competition. They do not have enough capital as well as market influence to compete with the incoming powerful global competitors. Therefore, to reduce loss caused by the decreasing sales, the best way is shut down their business.
A typical example is fast food industry. Many small size fast food shops have shut down these years due to the international competition from McDonalds, KFC, Café de Carol etc. These large size companies sell food in lower price than those SMEs and open as much as branches as they can. Meanwhile, the SMEs cannot offer such a low price and they cannot afford the high land rent boosted by the large companies. As a result, many of them closed down and create oligopoly problems which solely a few large company dominates the market.
Furthermore, after oligopoly phenomenon appears, those dominators have less motivation and incentive to enhance their competitiveness. Eventually, they may on one hand start to lower their quality to further save cost and on the other hand increase the selling price to increase revenue. This problem also applies to fast food industry. For example, the menu of McDonald is more or less the same for many years. Also, they can increase their price frequently. For instance, Café de Carol increased the food price after Lunar New Year.
Indeed, there are a lot of industries facing this problem like convenience store being occupied by 7-11 in Asian countries, toothpaste industry being occupied by Colgate and Hazel & Hawley and even the sport swear industry (occupied by Adidas and Nike) mentioned above etc. All these show that global competition will create monopoly problem and hence reduce competition and competitiveness. As a result, our team find out that the myth (globalization could increase competition and therefore enhance competitiveness) is not true at all.
Extension
In response to the those comments on this blog, we would like to explain more about our myth and points of view.
It is no denying that globalization can help the market to be more competitive that the local quality of goods would definitely be boosted up due to the global competitors. However, we should not ignore that the globalization harms the small budgeted companies especially the local companies because of many global companies established in the same place. To analyze more, try to think of a point, the global companies have lots of capital that they can do marketing and advertising to promote their products. With millions of advertising on the TV, magazines, newspapers and etc...the customers would most likely tend to try the new products mentioned on the advertisements in the global companies. For example, take Mc'donals as an example again, they have made a lot of promotions about their new products quarterly on the TV advertisement, people at home will be attracted with the new promotions and then they will get a try of the products. On the other hand, the small local restaurants just run their business with small budget and their limited loyal customers would be those people living around the restaurant. Although they sometimes would try to copy the products from the welcome restaurants, they were failed to attract much more customers as possible because there is fewer people who know about it and there is not enough budget to promote their products in the market. Thus, the small companies would be affected by global companies as they cannot get more potential customers in the market due to their small capital.
Advertising from global companies has really made much effect to the local or smaller companies. Apple company is an obvious evident to prove that the crowd just pay attention on the bigger companies. Although other companies such Nokia(we are not meaning that Nokia is not a big company, just comparing with Apple.) have done a lot of improvements on their products, the public would tend to only purchase Apple's products as we can see that almost everyone has an iPhone on hand. We now can watch Apple's advertisement on TV, but how about Nokia? Who cares Nokia anymore? Who knows about the new product from Nokia?
I feel that competitiveness has improved greatly due to globalisation, smaller companies are now unable to attain a natural monopoly due to the fact that geography is no longer an obstacle. It is true that many businesses have had to close down due to the fact that big multinational companies have moved into their territory but if this smaller company for example in the fast food industry could provide a better product compared to the relative low quality of chains such as McDonalds and could make their customers have a better dining experience at a reasonable price then there would still be a demand for them. There will always be small time companies who are able to find their niche in the market and therefore stay in business even with the big multi-nationals as direct competitors. It is only the strongest and most innovative small and medium sized companies which are able to survive against the large chains which I is a good thing for global competitiveness.
ReplyDeleteI also believe that globalization actually enhances competition. It is true that many multinational corporations have entered local markets and caused some smaller local businesses to close down. However, this competition from these foreign multinationals are actually creating a new competitive environment and enhancing the competition. This is because these large companies will lead to increased pressure for the local businesses to increase their efficiency to remain competitive. This may actually lead to decreased industry price or enhanced services and products in order to remain in business according to the article “Foreign Competition and International Diversification” from the Strategic Management Journal (Wiersema & Bowen, 2007). It is true that some prices have increased over the years in the fast food industry, but this is due mainly to inflation rather than reduced competition. There are also competition law set out by the government which include the law to prohibit such action as a cartel where the a few MNCs increase their prices higher than normal. Also, the small businesses that are forced to close down may likely be the ones that are not operating efficiently or have been providing a less than average service or product at higher prices. Therefore, MNCs can either help these businesses improve their current operations, or drive them out of the industry to make room for new and more innovative small businesses. Small businesses such as sole proprietorships are the most common form of businesses and although many fail in the first few years, there will constantly be new ones to replace the ones that were forced out of business. In addition, small businesses usually do differentiate themselves by offering much cheaper prices or focusing on a specific group. MNCs are really just giving local businesses a challenge, and I believe in today’s society, competition is all about challenging each other.
ReplyDeleteYou have chosen an interesting topic and i agree that a lot of multinational companies are taking over the world. But as far as i see it i think there will be or already is a trend where the people demand smaller and more genuin for example coffee shops to go to instead of for example Starbucks. Therefore i think there will be like a balance in the market. Big companies like mcdonalds and KFC will be always be demanded by the people since they are very well established brands. But at least for me i prefer many times to go to small companies where i feel more special as a customer. I also agree with the comment before that its a good thing for a global competition.
ReplyDeleteLike what the others have mentioned, I do disagree with the concluding statement made by the group. Firstly, I do believe that globalisation does increase competition and enhance competitiveness. My reason being that, without the stiff competition introduced by these foreign MNCs, many of these local SMEs are more likely to rest on their laurels since they would not feel the pressure or have little incentive to constantly innovate or come up with attractive products or services (Knight 1998). But with globalisation in place, this changes everything.
ReplyDeleteNo doubt, the local market might still be about the ‘survival of the fittest’, even without globalisation. But the difference is the number of competitiors and the amount of external pressure these ‘foreign companies’ could exert. The existing number of local competitors in the market might be negligible and they might be less worried about overtaking one another. Rather, these companies might be more likely to make homogenous products and they would be satisfied with having a certain amount of market segment, similar to a oligopoly situation (Knight 1998). However, with globalisation, this would thwart the game plan and might even threaten their foothold in the current market segment. Thus what I believe that, these intense competition provided by the MNCs brought on by globalisation would force these MNCs to be more competitive, which in turn would increase competition and enhance competitiveness.
I also believe that globalization actually enhances competition. It is true that many multinational corporations have entered local markets and caused some smaller local businesses to close down. However, this competition from these foreign multinationals are actually creating a new competitive environment and enhancing the competition. This is because these large companies will lead to increased pressure for the local businesses to increase their efficiency to remain competitive. This may actually lead to decreased industry price or enhanced services and products in order to remain in business according to the article “Foreign Competition and International Diversification” from the Strategic Management Journal (Wiersema & Bowen, 2007). It is true that some prices have increased over the years in the fast food industry, but this is due mainly to inflation rather than reduced competition. There are also competition law set out by the government which include the law to prohibit such action as a cartel where the a few MNCs increase their prices higher than normal. Also, the small businesses that are forced to close down may likely be the ones that are not operating efficiently or have been providing a less than average service or product at higher prices. Therefore, MNCs can either help these businesses improve their current operations, or drive them out of the industry to make room for new and more innovative small businesses. Small businesses such as sole proprietorships are the most common form of businesses and although many fail in the first few years, there will constantly be new ones to replace the ones that were forced out of business. In addition, small businesses usually do differentiate themselves by offering much cheaper prices or focusing on a specific group. MNCs are really just giving local businesses a challenge, and I believe in today’s society, competition is all about challenging each other.
ReplyDeleteI also believe that globalization actually enhances competition. It is true that many multinational corporations have entered local markets and caused some smaller local businesses to close down. However, this competition from these foreign multinationals are actually creating a new competitive environment and enhancing the competition. This is because these large companies will lead to increased pressure for the local businesses to increase their efficiency to remain competitive. This may actually lead to decreased industry price or enhanced services and products in order to remain in business according to the article “Foreign Competition and International Diversification” from the Strategic Management Journal (Wiersema & Bowen, 2007). It is true that some prices have increased over the years in the fast food industry, but this is due mainly to inflation rather than reduced competition. There are also competition law set out by the government which include the law to prohibit such action as a cartel where the a few MNCs increase their prices higher than normal. Also, the small businesses that are forced to close down may likely be the ones that are not operating efficiently or have been providing a less than average service or product at higher prices. Therefore, MNCs can either help these businesses improve their current operations, or drive them out of the industry to make room for new and more innovative small businesses. Small businesses such as sole proprietorships are the most common form of businesses and although many fail in the first few years, there will constantly be new ones to replace the ones that were forced out of business. In addition, small businesses usually do differentiate themselves by offering much cheaper prices or focusing on a specific group. MNCs are really just giving local businesses a challenge, and I believe in today’s society, competition is all about challenging each other.
ReplyDeleteI would like to point out two aspects of MNCs and competition to add to this discussion. First i want to highlight the fact that most of the MNCs in the service sector actually are franchisers and second, I wish to introduce the concept of 'Creative Destruction'.
ReplyDeleteEven though smaller businesses (with unpopular products/services) are driven out of the market the MNCs taking their place in the market will in most cases employ and be managed by locals. A big advantage of starting a business as part of a franchise is that the local entrepreneur will experience the benefit of a strong, known and respected brand. I would like to argue that a venture backed by a strong brand in fact lowers the barriers to entry substantially for the entrepreneur, both when it comes to attracting partners, customers and potential investors. Additionally, people working in international businesses will be exposed to MNC best practises and alternative to their culture’s traditional way of doing business (both company internal and external activities). These people, filled with new knowledege and ideas, can then use this experience and information to their advantage when and if they chose to start (or join) another business.
Surely, in the long term, more dynamic knowledge of the management (coupled with a more competitive environment) will give birth to more innovative business solutions and strategies. Innovation is widely held to be the driver of economic development and growth through creating a competitive advantage.
This leads to my second point. Creative destruction (Schumpeter 1942) as a concept entails that destruction of the value of the traditional way will follow the introduction of innovation into a soceity/economy. However, in the long term these cycles of new innovations will sustain economic growth as it introduces new ways of thinking and challanges the power of the old. As was already mentioned by someone before me, overcoming the challanges that competition gives rise to is a process of renewing and bettering the business practices to make yourself more attractive and more able to respond to customer values – especially by looking at values not already represented in the marketplace.
In more or less corrupt business environments olgiopolies will always be a problem. However, another perk of globalisation is the speed of information flow from one nation to another – and from one customer to another. Big MNCs cannot afford to spoil their brand names, giving them incentive to promote ethical and just business practises throughout the supply chain when these are valued by the end consumer.
The main drivers behind globalisation (the introduction of new technologies and trade and capital liberalisation) offer not only MNCs but also SMEs opporunities to expand and explore new markets. In a more closed off (protectionist) world, the barriers of entry will be much higher for companies restricted to the domestic market and capital of domestic investors – only MNCs will have enough cash in their pockets (and brand value to attract investments) to trade across borders.
In conclusion, competition will by its nature unmistakably improve efficiency in an industry. Yes, it does have some drawbacks when the competitiveness is pushed beyond sustainable means. But as a whole, ’out with the old (inefficient and traditional but unvalued business practices) and in with the new (innovation and value adding activities)’ is what makes our economies and societies develop
I would like to point out two aspects of MNCs and competition to add to this discussion. First i want to highlight the fact that most of the MNCs in the service sector actually are franchisers and second, I wish to introduce the concept of 'Creative Destruction'.
ReplyDeleteEven though smaller businesses (with unpopular products/services) are driven out of the market the MNCs taking their place in the market will in most cases employ and be managed by locals. A big advantage of starting a business as part of a franchise is that the local entrepreneur will experience the benefit of a strong, known and respected brand. I would like to argue that a venture backed by a strong brand in fact lowers the barriers to entry substantially for the entrepreneur, both when it comes to attracting partners, customers and potential investors. Additionally, people working in international businesses will be exposed to MNC best practises and alternative to their culture’s traditional way of doing business (both company internal and external activities). These people, filled with new knowledge and ideas, can then use this experience and information to their advantage when and if they chose to start (or join) another business.
Surely, in the long term, more dynamic knowledge of the management (coupled with a more competitive environment) will give birth to more innovative business solutions and strategies. Innovation is widely held to be the driver of economic development and growth through creating a competitive advantage.
This leads to my second point. Creative destruction (Schumpeter 1942) as a concept entails that destruction of the value of the traditional way will follow the introduction of innovation into a society/economy. However, in the long term these cycles of new innovations will sustain economic growth as it introduces new ways of thinking and challenges the power of the old. As was already mentioned by someone before me, overcoming the challenges that competition gives rise to is a process of renewing and bettering the business practices to make yourself more attractive and more able to respond to customer values – especially by looking at values not already represented in the marketplace.
In more or less corrupt business environments oligopolies will always be a problem. However, another perk of globalisation is the speed of information flow from one nation to another – and from one customer to another. Big MNCs cannot afford to spoil their brand names, giving them incentive to promote ethical and just business practises throughout the supply chain when these are valued by the end consumer.
The main drivers behind globalisation (the introduction of new technologies and trade and capital liberalisation) offer not only MNCs but also SMEs opportunities to expand and explore new markets. In a more closed off (protectionist) world, the barriers of entry will be much higher for companies restricted to the domestic market and capital of domestic investors – only MNCs will have enough cash in their pockets (and brand value to attract investments) to trade across borders.
In conclusion, competition will by its nature unmistakably improve efficiency in an industry. Yes, it does have some drawbacks when the competitiveness is pushed beyond sustainable means. But as a whole, ’out with the old (inefficient and traditional but unvalued business practices) and in with the new (innovation and value adding activities)’ is what makes our economies and societies develop.
Dear ELITE
ReplyDeleteThis myth statement is quite interesting. It is an opposite point of view as compared to another myth statement showed in another blog—“MNCs are getting bigger and companies become fewer”. It seems to be a myth at the first sight, but in my opinion, I think it is one of the characteristics of globalization rather than a myth.
Globalization is inevitable. It is like a rapier that has two edges, when it may bring some challenges to some corporations; meanwhile it also brings a lot of opportunities to them. All the things corporations need to do is to prepare for it. When it seems that the large size companies dominate majority of market, it does not. Many SMEs can catch the chance of globalization and learn many precious experience and technologies from internationally large companies. SMEs may not compete directly with those big companies, but they do show their potentials in competing with them. Most of them can always make full use of their unique characteristics to survive in this extremely fierce competition environment. For example, Chinese technology company Meizu Co., Ltd was established in 2003. Facing the pressure from many huge companies in technology industry, it can always compete with them by providing unique products that can attract customers’ attentio. It is quite successful now. This example can represent many originally SMEs and reflect the fact that globalization can actually enhance competitiveness among companies and make them upgrade themselves every now and then to survive.
This comment has been removed by the author.
ReplyDeleteDear ELITE
ReplyDeleteJust like one comment said, your myth is quite interesting because some of your points are just the opposite view as compared to our group's topic that "MNCs are getting bigger and number of companies is becoming fewer". So obviously, it is a myth.
From my point of view, although it seems that those giant MNCs have already dominated most fields of business, and the competition is just among those big names, however, small companies still have space for survival. Compared with those MNCs, small companies have the potential to be more familiar with local market and make quick reactions to adapt to market changes. So, apparently, small companies can fulfill the needs of niche markets better. Food industry is a typical example, although we have KFC, McDonald's or Cafe De Carol, we still have plentiful choices of local small restaurants and most of time, we will choose those small restaurants for their unique cuisine.
To sum up, globalization bring more brands to consumers, so the MNCs will face the challenges from not only those close giants but also many small companies who have unique features.
I think globalization maintain the competitivity effect between companies.
ReplyDeleteI agree that, when multinationals companies are implanted into a foreign country, then the local SMEs are affected and it is more difficult for them to remain competitive.
Nevertheless, I think this could be an interesting challenge for local SMEs.
They could « take advantage » of this situation to keep being competitive. These local companies should find a value-added to be able to distance themselves from the multinationals. Why do they necesseraly have to shutdown their business ? They have to adapt themselves to the market and to the consumers.
This comment has been removed by the author.
ReplyDeleteI am sorry that I am not agreeing with your point of view. I do believe the myth “globalization could increase competition and therefore enhance competitiveness”. I believe that healthy competition always led ones improvement. This is the reason why I believe in this myth.
ReplyDeleteI am not agree one of your point “after oligopoly phenomenon appears, those dominators have less motivation and incentive to enhance their competitiveness”. It is true that MNCs always dominate the industry. For example, Nike, Adidas dominate the sport wear market. H&M, ZARA dominate casual wear market. We can find that people always buy products from these brands. The reason for people buying those products is it only because of they are from a BIG brand ?? Or it is because of their quality or design?? MNCs always need to face the keen competition. In order to survive they need to keep their price competitiveness and improve their quality. If MNCs just to keep pace, will they still have such many supporters ?? The answer is NO !! Company always need to have a new idea, new design to maintain their business. If not, their customers will just turn to their competitors. Therefore, MNCs should keep their motivation to improve and enhance competitiveness in order to maintain their market share.
On the other side, MNCs also bring some new idea to the local industry. For example, MNCs would like to maintain their service quality in all stores. Therefore, MNCs will provide some training to local staff. Customers love to shop in a store which has good quality. To avoid the customer turn to competitors, local company would start training their staff and enhance the competitiveness. Therefore, globalization would not hamper the competition but to enhance the competitiveness.
Hi! I can see both points of views, and I can agree with both perspective's strong points. However, I find myself compelled to reply to this particular comment because I'm strongly liking their reasoning behind their particular argument. However, coincidentally I do support Elite's myth!
DeleteI am writing a specific example when I did research on Nike back in the 90's when they invested in a celebrity endorsement campaign with Shaquille O'Neal. Nike spent millions in response to Reebok's release of the pumps shoes, they came out with the "Shaq Attaqs" and made an egregious error in choice of colors. This simple mistake cost the company millions, the sales were far low than expected.
I believe MNCs have the ability to fall back on mistakes, as they can absorb costs and still have investors and suppliers providing them with constant new ideas. Although this is just one example, it is true that if even the MNCs fall behind quarterly or annual sales, this is also a threat to them to maintain market shares. I want to see Elite provide strong opinions to support their myth because I believe this group can nail it on the nose with backing their argument. I'm interested in seeing where Elite will take this! :)
As stated, my support in the myth goes to the firm belief that although SMEs don't seem to stand a chance with the driving force of MNCs, I do believe innovation can relieve some barriers to entry but it is the uncertainty of economic times that leave consumers to less choices and more driven by competitor's prices. It can cost a small company everything to come up with a brilliant idea and test the market, just to have an MNC come in and take on that same very idea yet be able to produce it with less costly measures and knock it's SME competitor out of the ball park.
Before reading this blog, I do believe this myth. But now , I can see this myth from another angle, that the stance this team hold. I partly agree the team 's view. globalization somehow really facilitate the formation of monopoly or oligopoly like Adidas and Apple because the exchange of trades between different countries allows those big brands to get into the local markets and gradually occupy the local and further international markets . This phenomena is true as what the team said. However, I think these international leading companies do still keep improving their products' quality since they still have to compete with other competitors in the market. Just like Apple and Samsung are now competing with each other to get more market share by inventing more new smartphone with new functions . So as a customer , we still can enjoy better products quality under this circumstance .
ReplyDeleteOn the other hand, I think globalization indeed can still increase competition on the world market. Take the instant noodles as an example , we can buy various noodles brands imported from different countries. That has reflected that companies still compete with other competitors on the global market and thus they have to improve their products'quality to enhance its competitiveness to stay in the market.
Sent from my iPhone
In your post you only consider companies producing traditional goods, what about IT companies such as Skype and Facebook? Where did these leading players start out? Are these not based on truely great ideas, shaped and optimized by great entreprenours?
ReplyDeleteI believe there is still room for the small players to penetrate todays market, however the competitive logic of today market economy has created a fierce battlefield. Only the truely great ideas survive. But isn´t this the point?
It might be true that one needs great resources to act on a global scale. Should it however be considered negative to seek benefits of scale? Is this not a modern form of survival of the fittest? One must not forget that it is the choice of the consumer what brand to support. These must find some kind of benefit in the products they choose to purchase. There are reasons behinf the global supremacy of the truely great brand; they present attractive products to their customers.
I believe you look at this topic to single mindedly and should try to put on other sets of goggles to consider additional angles viewing this topic. This topic is truely interesting and I hope you continue to explore it!
51834239 MGT4221
ReplyDeleteI strongly agree with this group's point of view. This is true to say that globalization would enhance the competitiveness. However, it is just particular for some large size companies as they have money and power to boost their competitiveness to keep themselves on the market.
I know there are still many small and medium local shop and they can survive under globalization. But many story proof that many of them are not capable to compete with large enterprises so that they collapse eventually. Actually, I am the victim in this case because there was a food court in my estate and there were many different small local restaurants. However, they all were forced to closed as few multinationals ,such as Starbucks and MacDonald, suggested to the estate management company that they could paid a huge of money to rent a shop. As a result, it is no longer a food court now as I have limited and little choices. To be honest, I feel disappointed and helpless as many residents and those restaurant owners were not happy with this ending.
Therefore, I like this topic as it really reflect the existed situation and it is cohesive to me. However, I would suggest this group should use more specific and detailed example,such as data and real case, to strengthen their idea so that this context would become much persuasive and rich.
Hi Elite, undeniably you have an interesting myth.(simply by looking how many comments you have gotten so far) Tracing back to your point of view and lots of other students' comments. Some support your myth, some dis-confirm it. It is the magic of "myth", it cannot be 100% true or 100% wrong. This makes the myth become more interesting.
ReplyDeleteWe can see the rigorous competition among BIG brands like Panasonic, Sony and so on. It is sad but true to say that through competition, we can enjoy higher product quality and services. However, as one of the above comment mentioned,some local or small businesses still can survive. Isn't it funny? Is there anything to do with "Culture" issue? Can "Culture" be a strong competitiveness to the small and local firms? It is not easy for local or small firms to compete with those big, global brands.
Back to your myth--globalization could increase competition and therefore enhance competitiveness. The inflow of global brands does lead to competition of local brands. Today's business world is so rigorous. Even some big brands can have bigger market share. But, other brands may take over them one day if they are not competitive enough. Therefore, for sustainable business development, corporations need to enhance their competitiveness constantly. For this point of view, it may support the myth then.
Hey Elite!
ReplyDeleteYour Idea is definitely interesting, grasped many's attention and interest as you can see the amount of comments you guys have received for your first blog! I definitely agree with the whole idea of globalization increasing the competition between corporations, but as some of the posts suggested above, I also feel the ratio of benefits between multinational corporations in comparison to small companies is very unbalanced.
I think similar to one of the comments above, I find your topic very interesting because it somewhat has relations to what I experience in my personal life. I live in Sai Kung, a small town in the New Territories. Sai Kung is known to be a tourist attraction in Hong Kong, many visit for the beach, the view and the of course, the seafood. With its popularity rising, many bigger branded businesses have moved in to share the market demand of these tourists spendings. Restaurants like Subway, McDonalds, and Pizza Hut made it very difficult for local smaller restaurants to survive. All the rents of shops sky rocketed, making it very difficult for some businesses to continue, and eventually closed down.
I find it to be somewhat beneficial for globalization to raise competitiveness, but the idea of smaller companies surviving with all these MNC's coming into their local market, it is almost considered a myth for these smaller branded companies to compete. Because of the end of the day, many don't purchase based on specialization or look only at the quality of the products, people think rational and will eventually choose big branded companies since they have the power to provide products at a cheaper price.