what happen if globalisation occurs in primary sector
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The evolution of supply, demand, and environmental factors is driving companies toward operating as if a homogeneous worldwide market existed in their industries. Many forces are pushing for globalization. ... Thus, globalization presents both a major threat and a major opportunity, particularly in developed countries.
Explanation:
GLOBALIZATION IS A KEY TREND in the business world today. The evolution of supply, demand, and environmental factors is driving companies toward operating as if a homogeneous worldwide market existed in their industries. Many forces are pushing for globalization. A decade of peace and increasing governmental advocacy of free trade in all the major developed countries has lowered trade barriers and given a renewed impulse to global trade. In the 20-year period from 1970 to 1990, world trade will have more than doubled in importance, from 12 percent of total world production to 27 percent (McKinsey and Company, Inc., 1987).
Since demand has become homogeneous across borders, producers of major consumer goods today can use similar marketing concepts and approaches to reach the entire Western world. Thus, globalization presents both a major threat and a major opportunity, particularly in developed countries. Industries and companies that previously enjoyed relatively safe home markets now find themselves faced with the possibility of new competition from companies that had never attempted to market products in their part of the world. Globalization has made worldwide competitiveness critical for survival. However, the conquest of global markets will be the reward of the most efficient producers.
To achieve worldwide competitiveness, many managers would quickly move any factory anywhere in the world where they could get cheaper or better materials, labor, and vendors, and where laws and governments were more congenial. More and more manufacturers make parts and subassemblies in different areas of the world and then assemble the complete products elsewhere and sell them in global markets. The location of competitive producers changes constantly, and factories move repeatedly to find the most favorable locations.
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Suggested Citation:"Globalization of Industry Through Production Sharing." National Research Council. 1988. Globalization of Technology: International Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/1101. ×
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This paper analyzes the factors that have led developed and developing countries, especially the United States and Mexico, to adopt this system, termed “production sharing.” It examines the results of production sharing to date and discusses possible policy options to achieve the best results of this global trend.