What is Globalisation?

Globalization in business involves operating on an international scale, including imports, exports, and establishing overseas operations as multinational corporations. Our daily goods, like coffee from Brazil, iPhones from China, and tomatoes from Spain, exemplify this global interconnectedness.

Importing involves purchasing goods from other countries, such as the UK buying goods from China and India. The main reasons for importing are availability (e.g., McDonald's importing coffee not grown in the UK) and cost (e.g., electronics companies like Apple producing in China due to cheaper labor).

Exporting is the opposite of importing, where goods produced domestically are sold to other countries. Examples include Scotch whiskey and Aston Martins from the UK. Exporting allows companies to access a global market, increasing sales and potential profits beyond their country's borders. In 2021, Scotch whiskey exports reached 4.51 billion, with major contributions from the USA, France, and Taiwan.

As businesses grow, they often expand overseas to find new customers and locations. McDonald's, originally planning 1,000 stores in the US, expanded internationally in 1967 (Canada, Puerto Rico) and 1971 (Japan) to accelerate growth and profit. This expansion helps increase brand awareness and product ranges, primarily by accessing more customers than possible in a single country.

A multinational company (MNC) operates in multiple countries, like McDonald's, which has over 40,000 restaurants in more than 100 countries. If McDonald's hadn't become an MNC, its growth would have been limited to the US market, missing out on 95% of the world's population. As an MNC, McDonald's serves about 69 million people daily, with over half its revenue coming from international markets, showcasing the immense profitability of globalization for a business.