Introduction
Globalization is the process of international integration arising from technological advancements resulting in increased cultural and trade exchange. In the modern world globalization has resulted in increased productivity. The effects of globalization have been experienced in the following sectors around the world, economic development, culture, environment and political systems. Globalization has both positive as well as negative effects on the society at large. (England & Steve management services, 2001). Grant & Robert (1991) define Competitive advantage as a distinctive advantage that an organization or nation has over its competitors. Thus it gives organization unique benefits over other organizations operating in the same industry. An organization that has a competitive advantage over the others does perform better than the competitor in the international market. It is thus essential for an organization or a nation to maintain its competitiveness in the international market. There are a variety of factors that can contribute to organizations or nation’s competitiveness some of which include highly skilled labor, access to natural resources and geographical location (Grant & Robert, 1991).
Discussion
England & Steve management services (2001) claim that in recent years globalization has been largely influenced by technological growth among other factors. One of the reasons why technological growth has been significant it’s due to its ability to reduce the traditional barriers of communication. Today, due to adoption of technology world has become a global village. For example, an organization would have had a competitive edge over another due to its location. Today, location is no longer considered a significant factor in creating organizations competitiveness since technology eases the means of conducting business as everything can be sourced with just a click of the mouse (Wen-Cheng, Chien-Hung & Ying-Chien, 2011). For example, someone in Pakistan can be able to source some products from the USA without leaving the comfort of his computer. As such an organization in the USA that previously enjoyed a competitive advantage due to its favorable location may no longer have that advantage. Grant & Robert (1991) argue that to be able to compete successfully an organisation should consider adoption of technology in its operations. The adoption of technology is vital in reducing the operational costs of organisation. The reduced costs can then be passed to the consumers as a benefit. Though location has become less significant it does not imply that that location is totally insignificant especially for nations. Traditionally, nations which are more competitive in the international market are strategically positioned (Grant & Robert, 1991). For example, a landlocked country is likely to face more challenges in the international market compared to other countries. Thus, globalization has significantly benefited organizations in the international market by reducing the production cost and increasing their market share. The elimination of traditional barriers has helped to level the field in the international market thus enabling organizations and nations to compete fairly (Mabry &Lauren, 2012). According to Mabry &Lauren (2012) the factors that give an organization a competitive advantage are fast changing. An organization or a nation should thus evaluate the current factors that would give it an edge against its competitors and concentrate on building on those factors. Wen-Cheng, et al. (2011) argue that globalization has also made it possible for the organizations to borrow ideas and try to tailor make them to the local needs. It is thus possible for an organization to be more competitive by learning the weakness of a competitor and developing a product that would address such issues (Wen-Cheng, et al., 2011).
International market is more dynamic as various factors shape and contribute to these dynamics. To be able to navigate the international markets successfully, organizations and countries need to consider use of global sourcing. Global sourcing gives an organization a chance to purchase resources at a low cost. Global sourcing can therefore give an organization the competitive advantage it requires to be successful in the international market by reducing the production cost enabling organization to offer its products at a low price (Mabry & Lauren, 2012).
In Grant & Robert (1991) perspective it is significant for organisations and nations to ensure they maintain their competitive advantage. Having a competitive advantage in the market increases organisational sales thus resulting to increased profitability. Maintaining a competitive advantage should aim at ensuring the following factors demand conditions, factor conditions, support and related industries, and the firm’s structure, rivalry, and strategy. Differences in culture and character could also influence the success of maintaining an organization's competitiveness. Other variables that could ensure a country maintain its competitiveness in the international market includes entrepreneurship as well as investments. To some extent a nation’s culture can also influence a nation’s competitiveness in the international market. Thus, where a nation’s culture avoids uncertainty; the nation is likely to be less competitive since people are afraid of venturing into the risks of the global market. People thus need to have an attitude to risk if a nation wants to have a competitive edge over others.
A nation should understand the policies that are likely to make it more competitive and adopt such policies (Stone & Ranchhod, 2006). For example, a country should adopt policies that encourage industrialization and innovation. Stone & Ranchhod (2006) argue that a majority of the nations fail to effectively compete in the global market due to the adoption of restrictive policies such as heavy taxation and limitation in protecting patent rights. A country needs to be open to new ideas if it wants to be successful in the international market. For example, a country should consider the use of genetically modified organism to increase their yield. International trade is also an important element in creating organizations, business or country’s competitiveness. International trade creates competition and as competition intensifies organizations, business or nations try to devise ways of being competitive thus enhancing their efficiency and effectiveness. what would be considered as the western conventional view is that competitive advantage is usually as a result of two factors which include customers believe that a product has superior qualities and the ability to reduce the production and distribution cost. An organization should thus concentrate more on value addition, increased efficiency and effectiveness to ensure it’s more competitive in the global market. Concentrating on these three important factors could ensure organization and business effectively compete internationally. An organization can also ensure its competitiveness by creating products that are unique and which resolves everyday problems faced by people. People tend to identify with such products giving an organization the competitive edge it requires to survive in the international market.
In creating competitive edge the gifts of nature seem to have lost relevance. The future in ensuring organizations competitive edge, therefore, lies in engineered and created resources as opposed to the natural resources. It could, therefore, be argued that it only those organizations and nations that will be more innovative are likely to maintain their competitiveness in the international market (stone & Ranchhod, 2006). Stone and Ranchhod (2006) argue that various studies have already availed enough evidence in support of this notion. For example, a majority of the African countries are less competitive in the international trade due to their inability to fully incorporate technology in their production process (Stone & Ranchhod, 2006). Thus, their products are often expensive compared to other products in the global market. Failure to be innovative and to adopt technology, thus sticking to the traditional methods of production is one of the factors that could be said to be affecting Africa competitiveness in international trade (Stone & Ranchhod, 2006).
According to Stone & Ranchhod (2006), organizations competitiveness could also be affected by ineffective government policies such as delays in cargo clearance. Thus, government policies on trade need to be reviewed to facilitate organizations ability to compete. Considering the various benefits that could result from the maintenance of competitive edge especially in the international markets, organizations, businesses and nations should strive to be more competitive (Stone & Ranchhod, 2006).
Conclusion
Globalization has to a larger extent affected the way the business, organizations and nations conduct their business. The understanding of the changes in the international trade which are as a result of globalization would be significant in understanding the appropriate measures required to create and maintain competitiveness in the international markets. Thus, nations, business, and organizations need to look for the new advantages that would give them a competitive edge over others. There is, therefore, the need to review the majority of the output-related concepts. Radical rethinking and redesign of the business operations, as well as countries policies, is essential to ensure efficiency and effectiveness. Adoption of technology and continued innovation could also be an important factor in ensuring a competitive edge for nations and organizations. There is also the need to integrate the economics with social sciences when organizations are searching for the new competitive advantages that would give them an edge in the global market.
References
England & Steve management services (2001). Globalisation and the e-conomy-gaining competitive advantage in tomorrow’s market. Vol.45(9),pp.8-13[Peer Reviewed Journal]
Grant & Robert M. (1991).porter’s competitive advantage of nations’: An assessment. Strategic Management Journal, Vol.12(7), pp.535-548[Peer Reviewed Journal]
Mabry &Lauren (2012) competitive advantage. Knowledge Quest. Vol.40(3), pp.66-71 [Peer Reviewed Journal]
Stone, H. B. J., & Ranchhod, A. (2006). Competitive advantage of a nation in the global arena: a quantitative advancement to Porterʼs diamond applied to the UK, USA and BRIC nations. Strategic Change, 15(6), 283-284.
Wen-Cheng, W., Chien-Hung, L., & Ying-Chien, C. (2011). Types of Competitive Advantage and Analysis. International Journal of Business and Management, 6(5), 100-104
