Analyze Globalization's Role In The Development Of International Business.

Analyze globalization's role in the development of international business.

In today business world, globalization seems to be an important tool for businesses to positioning themselves in borderless trade system. As we all know that globalization is the worldwide trend which economics of every country all over the world become integrated to another. This integration phenomenal is cause from technological advances, the flow of capital, free-market capitalism, lowing tariff barriers, privatizing enterprises, and the migration of people across international borders. In the mean time, globalization can also descript when businesses are expanding their operations to new countries or marketplace also. In a global marketplace, any company from any country can become a competitor to the other.

Most of company tend to change themselves from "domestic-only" - companies that do business only within their own country - into multinational company or seeking new opportunities to go aboard by expanding their market, moving their facilities into developing countries, or diverse themselves to another region such as having their headquarter in Northern Europe and having their branches in Europe, North America, or South East Asia.

Since Fashion became more idealistic and individualization; most ideas came from all over the world with magazines and recently the internet. Thus the fashion industries are become more global. As a topic is to analyze the globalization's role in the globalization processes and forces that have been the development of international business; therefore I we have chosen the Swedish clothing chain Hennes & Mauritz (H&M). The chain was founded by Erling Persson, a Sweden, in 1947.

Case study: H&M Clothing Company - Bullishness Swedish company in fashion world.

Company Facts:

Hennes & Mauritz (H&M) is a Multi-national fashion clothing retailer from Kingdom of Sweden. H&M opened its first store in Sweden in 1947. At the end of 2006, H&M had 1,345 stores in 24 countries with over 60,000 employees, running their business under "New merchandise is delivered to H&M stores daily" strategy with limited number of middleman by buying the right merchandise from the right production market and concerning about environmental in host countries where H&M doing business with especially in developing countries who are the major supplier of H&M." H&M does not own any factories. Instead, H&M work with about 700 independent suppliers, mainly from Asia and Europe. H&M also has about 20 production offices around the world, located primarily in Europe and Asia (www.hm.com). According to their business strategy; globalization became a significant part of H&M business. As H&M in so many areas around the world, fashion is global - the differences among each other regions, countries or behavior are not as great as they used to be. H&M chain can compete with their competitors by using an international chain.

H&M plan to open 170 new stores in 2007. China, Greece, Slovakia and Qatar are prospect markets. In 2008, H&M will open the store in Japan and the store will be located in the best location in Harajuku, one of the most popular shopping districts.

Picture 1: H&M Market

Source : www.hm.com

Globalization's role could be the most important role in doing business as multi-national fashion retailer for H&M chain. According to "Facts about H&M 2006" from www.hm.com I can analyze how globalization's roles are taking part in H&M chain as follow:

* Globalization of Markets.

Marketing has become the critical success factor in this borderless business phenomenal where goods and services can be moved around the world cheaply and efficiently. Fashion trend seem to travels quickly through the internet, music, movies and travel, and this and imply that fashion and trends have an almost instantaneous impact on markets and demand. For H&M, they positioning themselves as multi-national fashion clothing retailer offer a wide, varied range of fashions for women, men, teenagers, and children. Customers can find the same items in every H&M store around the world.

* Cost efficient production of goods and reduction of lead time

As I mentioned earlier, H&M does not own any factories. All production is outsourced from about 700 independent suppliers, mainly from Asia and Europe due to low wages, while the quality of produced there is of a good standard. H&M also have local production offices with local staffs according to identify the best supplier worldwide fro new goods in term of price, quality, and location (transportation).

Short lead time can help company improve their competitiveness if the company can