The Effects of IT on Globalization

IT190-03 Information Technology Concepts

IT has indeed changed that way that businesses operate globally. There are many resources that can help globalize your business, and capitalize on an international market. Businesses, organizations, and even individuals are now finding it easier than ever to interact worldwide, this effect is known as globalization. According to Delahaney, of the 30 percent of US economy stemming from international trade, 97 percent comes from small business. It is now easier than ever to expand your business on the global market; however, there are also pitfalls that you may encounter as a small business trying to operate on a global market.

The internet has changed how products are brought to consumers. One major example is amazon. Where we used to go to bookstores to purchase books, amazon brought a whole new way of delivering books to consumers. In the late 90’s books started to become digitized, and they could be read on computers. Then, in 2007, with the launch of the amazon kindle reader, e-books became the new norm. Another example of the internet changing the way products are brought to consumers is ebay. They launched an idea that anyone can sell anything, and they were right. Consumers liked the idea of being able to find whatever they wanted and have it shipped right to their door. It is evident that new ways of getting things was brought into the world because of the internet.

Computers have also changed simple things like how we communicate with others. Handwritten letters, sent out using a mail service just 20 years ago was very normal, but can you remember the last time you put a stamp on a letter? Email has become a major communication method, and is far more common than even when we used to mail letters. People that were close enough to talk to used to have to be the only people we talk to; however, because of IT, we can now communicate with the people we knew in grade school on a daily basis, if we so choose, whether that be by a phone call or even now video chats. These are tremendous strides that IT has made on the way we communicate with others, even so much that there are people who have never met in person that build lasting relationships, whether personally or in business.

Tangible product distribution has also changed immensely due to IT. Many years ago finding products manufactured in other countries was something you had to go to the store to obtain, or shop from a catalog and wait months for it to ship from overseas. Now, because of IT, you can have a product sent from another country within days, usually by a truck, but now, things are even starting to be delivered by drones, so you can get a product within hours of requesting it. Distributors now have warehouses instead of stores, they are able to keep much larger inventory levels because they are lacking the expense of maintaining a store front, and that helps them to be able to get the product into the consumers hand much more quickly than before.

One pitfall you may consider would be going too fast. Many businesses want to “do it all”; however, remember that there are many considerations when expanding. You’ll have to find people to help you as your business grows, and you’ll want to avoid hiring the wrong people, so you’ll need time to fully blossom. Many businesses outgrow their current staffing levels and need too many people too fast. In that, they end up hiring people that aren’t the right fit for the job because they have a short term need. Additionally, if you try to move too fast, you may encounter issues with order fulfillment. If you end up with more orders than you can fill within a reasonable time frame, you may end up with serious customer service issues. Keeping a slow steady growth into global sales will help you be far more successful.

A second consideration is whether or not to employ a rep in the new market that you work with. Sometimes building a relationship with someone in the country you want to work with can be a great benefit. You may find navigating the local process, rules, qualifications and governmental restrictions a challenge, so having a local representative may help learn the specifics of the market you are working with. Also, distribution of your products may be easier if you can ship several orders in one shipment and have them broken down and distributed on a local level. This will help with the expense and challenge of sending so many packages from your single location. Potentially a local representative can help ease both of these burdens.

Finally, considering that the consumer in other markets or countries can be very different from what you’re used to locally is incredibly important. Thinking of different buying habits, patterns, and interests in other countries is one example of the difference. There is also the consideration of how to market to people in another country. Sometimes, the sales and marketing techniques that we use locally may not work in other countries, or even in different markets within our own country. You may find that the marketing strategies that work in your small area will be ineffective even in a state like Washington, where the people are influenced by different triggers. Keeping the individual consumer in mind is crucial to being effective during globalization.

There are many factors to consider when deciding to go global. I think that this will help in seeing some of the challenges and considerations that you may face. Doing more research can certainly help you be more successful in keeping a short term and long term plan to expand your business, and reach consumers that you may never be able to reach with a brick and mortar store. Since your success is based on every step that you take, it is important to think about all of the possible outcomes of every action that you take when branching out and globalizing your local business.