Globalization in China

Kiely defined that globalization refers to a world in which societies, cultures, politics and economies have, in some sense come closer together. Globalization gives a huge influence to the world, especially to the developing countries such as China.

In globalization, China’s GDP grew fast and the companies are becoming bigger and stronger. These evident indicated a continuous economic development in China. Is that means globalization is totally good for China?

It’s true that China enjoy lots of benefits in globalization. Firstly, as a developing country, china embraces the benefits of trade and direct investment because of globalization. Before 1987, china’s foreign trade was negligible. But after china opening the door to the world, the ratio of trade to GDP has quadrupled—from a mere 8.5 percent in 1978 to 36.5 percent in 1999. Moreover, due to globalization, china’s opening up was undertaken step by step. At the begining, it started geographically with special economic zones, then advancing gradually in various industries from the more competitive manufacturing industry to the weak agriculture and service sectors.

So we can see, under globalization, china seize the chance and realized that it is crucial to develop itself but not protect for a developing country. And china increases its advantages to absorb foreign capital and maximize the benefits of opening up. That’s why China gain a lot in globalization.

However, in my opinion which from my experience, while the Chinese economy has dramatically increased its openness over the past two decades, income inequality has risen as well, which cause a big suffering with the poor. For example,the World Bank estimates that China's Gini coefficient—a measure of the inequality of income distribution in a society (0 being perfect equality and 100 being complete inequality)—rose from 28.8 in 1981 to 38.8 in 1995. These data indicate an increase in inequality among residents. Moreover, I find some figures about the inequality of 100 urban areas, since this kind of inequality constitute 75% change in the general change of inequality in China from 1980 to 1990. We can find a clear evidences from the data that cities which have opened up quickly also had a quick decline in urban-rural inequality.

In addition, referring to the income distribution, from 1988 to 1995, the poor who live below the normal standard in terms of the purchasing power complained the decline of income in most rural areas. Moreover, along with the opening in rural area, an obvious reduction in poverty we can see.

Therefore, we can see that globalization brings both advantages and disadvantages to countries. What we can do is utilize the opportunities we can seize to make the country stronger. At the same time, we also should admit the demerits that brought by globalization, and try to improve them step by step.  

SWOT analysis

SWOT is a structured planning method that used to evaluate the strengths, 

weaknesses, opportunities and threats involved in a project or company.

In applying SWOT analysis, we should minimize or avoid the weaknesses and threats. Specifically, threats should be converted into opportunities, and weaknesses should be converted into strengths. SWOT analysis is particularly useful in mid-term evaluations as it can provide useful information about the intermediate objectives of the program. Moreover, it is useful to summarize the relationship between environmental influences and core competencies and hence framing the agenda for developing new strategies. I would like to take Easyjet which is a UK airline company as an example into the SWOT analysis.

Strengths

There 3 main strengths of Easyjet. First of all, easyjet enjoy a low cost advantage because of  high seat density, high load factors, a point -to-point strategy that allows high aircraft utilization, a young and efficient fleet, lean overheads, labour productivity and a lack of legacy pension costs. Therefore, they can provide a 50% lower price than those of the major carriers on short haul routes and 20% to 40% below those of most other lower cost competitors. There is no doubt that is a significant attraction to customers put Easyjet as priority.

Moreover, Easyjet has a big market share in Europe which more than any other carriers.

Thirdly, Easyjet has improved the brand perception in recent years even to other countries, since they are keep improving customer satisfaction.

Weaknesses

As a airline company, easyjet’s earning is very seasonal, they are unhappy to use the increasing profit in summer to offset a loss-making winter as summer is a hot season for travelling. This makes it vulnerable to any unexpected problems in the summer.

In addition, although Easyjet is much stronger than many LCCs competitors, LCCs as a whole still suffer from brand weakness relative to major legacy carriers. This means price will remain a key dimension of competition.

Opportunities

It is possible for easyjet to get a bigger market share in the future, because of its low cost and price advantages and current capacity cuts from most of its legacy carrier competitors. As carrier is cautious about connecting with other airlines, the partnership opportunities will also open new doors.

Secondly, easyJet also can look at cost reduction further, such as airports, ground handling, engineering and fuel, in order to maintain the price advantage to compete with legacy carriers.

Threats

As with any labour-intensive service industry, airlines are vulnerable to labour unrest, not only among their own staff, but also among key airport-based suppliers. While easyjet has a much better history of labour relations than most legacy carriers, some factors still increase the risk of internal labour disputes.

Another factor that brings a negative impact to Easyjet is the airline tax. Due to the price elasticity, the increase of airline tax would reduce the demand of customers. And generally the tax charges higher percentages of short haul tickets than long haul tickets, which influence the profit of easyjet.

Now, I want to focus on the strength of Easyjet, since it is fairly important for it to succeed in UK. Easyjet has considerable strengths in its cost base and ticket pricing against the legacy carriers and a strong airport network across Europe, so they can have power to keep improving their market share by obvious financial power. It has a presence in 49 of the top 100 market pairs in Europe, which much more than another company in this industry. Also, 46 of these involve primary airports, versus 24 primaries for Ryanair and 34 for IAG. Those was amazing data to make it to be strong.

PESTEL and stakeholders analysis of APPLE

We learned the knowledge about PESTEL this week, and here I’m going to emphasize one part of that on APPLE as an example.

As we all know, Apple is a spotlight of the world in electronic area. For my perspective, I think the elements of Social-cultural influences Apple a lot. Social- cultural is defined as demographic change affecting the organizations in terms of the population growth rate, language and people’s preferences etcetera. Since the globalization interact people around the world, and technology plays the main role in globalization, people cannot imagine the life without electronic devices such as telephones and computers. Because of that, the appearance of Apple makes people fall in love with its products in terms of its usage, quality and design.

Moreover the music industry would be another social influence, since people has tended to download and listen to music on the internet. At that time Apple’s developed the biggest virtual media store-iTunes, which is the leader of any other competitors. Although the web privacy is a threat, government and laws would punish the breakers.

In addition, people, especially teenagers likes to play games in telephone, which lead Apple develop the games function, and Apple 's games brought a unprecedented experience with screen touching. This is also an social influence that made Apple succeed.

All in all, considering the image of Apple display people’s life in terms of the good function, brilliant design and loyalty, the social influences brought a positive effect to on Apple.

Just because these kinds of influences brought Apple good benefits, it grow very fast which also give an influence to the stakeholders such as shareholders, suppliers, government, customers, employees and lenders. Here I am going to emphasize the influence of employees who be treated as internal stakeholders, since they work for apple and they can express their opinion in what happened.

According to the research, we can find that Apple treats its employees very nice in terms of the income and equipments they can use. For example, they are able to get their own food on their own eatery which avoiding the problem of queuing. Moreover, Apple brings a high satisfaction and good sense of job to all employees. Because Apple employees could have influenced Apples aims as they could have been telling their customers how good the iphone is which is resulting to Apples profits riding by 24%. A high profit not only means Apple has more financial resources to support its developing, but also means a higher income to employees. Workers will be enjoyable to the job which provides both high income and high satisfaction. While employees were motivated to work, they will also create better influences to company.