Globalization

Globalization is one of the most vital factors currently influencing the world economy. IMF states that Globalization is the process through which an increasingly free flow of ideas, people, goods, services and capital leads to the integration of economies and societies”. This means that globalization leads to an expansion of trade in goods and services between countries, labour migration- skilled persons relocating to another country. Globalization also leads to internationalization of products and services and development of global brands.

A country is assumed to have a competitive advantage when it acquires attributes that allow it to perform at a higher level than others within its competitive industry. (OECD, 2011) A globalization driver that impacts the country in which I reside is the cost globalization.

In the British Virgin Islands many employers and companies are importing inexpensive labour (cheap labour). The employers/companies provide work permits to individuals from the Philippines and the OECS countries and have them work for reduced salary. These foreigners do it because it is more than what they would be paid in their country. This creates a competitive advantage for the BVI in that they have skilled workers, such as accountants, doctors and financial consultants who are being paid half of what a BVI Islander would be paid, this brings more revenue to the companies and raises the countries financial status.

(1) Market drivers

* Degree of homogeneity of customer needs

* Existence global distribution networks

* Transferable marketing

(2) Cost drivers

* Potential for economies of scale

* Transportation cost

* Product development costs

* Economies of scope

(3) Government drivers

* Favour trade policies e.g. market liberalisation

* Compatible technical standards and common marketing regulations

* Privatisation

(4) Competitive drivers

* The greater the strength of the competitive drivers the...