Sample Of Case Study On How Globalization Impacts Computer Hardware Sector

Requirements

Critically review the evidence (i.e., from academic, commercial, governmental, and other relevant sources) to support the view that the process of Globalisation is likely to have a significant impact on the competitive environment of the Computer Hardware sector for the foreseeable future.
(N.B. You will need to research to complete this assignment and develop the evidence base to support your conclusions. Higher marks are awarded to those students that display an ability to evaluate and provide a critical review of the evidence – i.e. to assess the contribution of different sources before drawing their conclusions. You may limit your investigation to a single country or continent should you find that easier to research)

Solution

Executive Summary

The impact of globalization has been largely debated in different fields. Globalization is a prominent controversial issue across the globe. The debate has been discussed on different topics ranging from theory, basic ideology, and influence only supported by empirical evidence as to the features of globalization. This paper aims to support the view that the process of globalization is likely to have a significant impact on the computer hardware sector.    

The computer hardware sector provides an important case study of the impact of globalization. Indeed, the sector is one of the most critical and global industries, while major firms coordinate manufacturing networks that spur economic growth worldwide. Moreover, it has been one of the most dynamic divisions of the electronic sector for many years in terms of the establishment and growth of new forms of industry and organizations.

Introduction

Over the last few decades, the world economy has not only experienced a rise of increased trade and financial transactions but how people from different nationalities interact with each other. Businesses are today linked with each other through the global market for products and services, resulting to increased international flows of goods, labor, capital, technology, information as well as management know-how. Indeed, businesses of all types are becoming more and more integrated. The process of globalization has become one of the most significant developments impacting the competitive environment of the computer hardware sector for the foreseeable future.

Globalization offers computer hardware companies new opportunities to compete globally and accelerate development and growth, but at the same time poses numerous challenges to the company’s financial and the management of international trade. It is upon this background that this paper attempts to critically examine the impact of globalization on the competitive environment of computer hardware companies.  Indeed, globalization has become one of the most critical elements of today’s business development, significantly impacting all fields of business, including technology. The larger multinational computer hardware companies play an influential role in the international development and growth of their sector by getting the trends of technological/technical innovation and utilizing the up-to-date managerial methods to improve the company’s future.

Globalization has led to remarkable transformations in corporate practices around the world.  Engardio, Bernstein, and Kripalani (2003) note that companies such as Microsoft, Intel, and IBM have been trading globally and sourcing specialists from different countries, causing job shifts and organizational structural change. In this view, this paper aims to agree with the view and investigate the impact of globalization on business with a prime focus on the computer hardware industry in Asia, particularly in India and China.

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Globalization Defined

In this study, the term globalization, according to Orozco (2002), means the process of enhancing cultural and social interconnectedness and economic, market, and financial integrations motivated by improvement in technologies and communication and trade freedom. According to Berger (2000), globalization is an immense growth of businesses that operate internationally and the ability of individuals to communicate, travel, and work across a progressively unified world. This argument has been supported by Hirst, Thompson, and Bromley (2015), who state that globalization has a paramount influence on businesses, even small enterprises that operate domestically, as they might find competing with multinational firms or even has to respond to changes. As the global countries and their economies change to be free for investment and trade, they have a chance of becoming more interdependent.

The Impact of the Globalization Process upon the Competitive Environment of the Computer Hardware Sector

The global economy offers several threats and opportunities for corporate in various industries. According to IBISWorld’s Global Computer, Hardware Manufacturing report, the rising income level across the globe and the advancement of computer technology have led to increased demand for computer hardware, especially in developing markets such as India and China. The report continues and states that the growing competition from small devices such as mobile phone and tablets have lowered the demand for personal computers, thus affecting the global computer hardware industry over the last five years to 2016 (IBIS World, 2016). Nevertheless, the IBIS World report concludes that over the next 5 years, the computer hardware sector is expected to grow due to the projected benefit from global economic growth.

The computer hardware industry involves those companies that produce and assemble computer peripherals, computer hardware, and personal computers. This sector is highly competitive, which indicates that such companies must constantly be innovative and operate in the global market to sustain their competitive advantage. There are many companies across the globe that manufacture and assemble computer hardware, but the major multinational companies in this sector include Dell, HP, Apple, Lenovo, Toshiba, and Oracle. In fact, the computer hardware sector has been on the rise with no signs of slowing in operating globally despite the recent financial and economic crisis.

In fact, the computer hardware sector poses a strong portfolio offering a diverse number of products. For instance, Hewlett-Packard does not only provide PCs, but they offer other products such as printing and other peripherals hardware (HP, 2016). This helps HP leverage against future downfall as the company has the necessary financial and manpower capacity to operate globally.  

As the computer hardware sector has a strong global presence, it is then paramount to take advantage of the new opportunities presented by the global market of developing countries such as India and China in Asia (Karimi et al., 1996). In fact, operating in globally is a key strength in this sector because to sustain competitive advantage, companies must venture into new markets around the world. According to globalization101.org (2014), products that are based on information technology are largely used by nearly every person in modern industrial societies. According to Arora and Gambardella (2004), the spread of information technology and its applications has been extremely swift. For example, approximately 30 years ago, the use of computers and its peripherals was still minimum and limited to only a small number to technologically advanced societies.   In fact, the majority of people worldwide produced documents through typewriting which had its disadvantages of no storage and manipulation of data. However, today, the Internet and the use of computers have changed businesses and established new ways for customers and retailers to transact business in domestic markets and around the world.

Analysis of India and China

According to ITU World Report (2013), the total number of computer users reached over 2.7 billion, representing 39% of the global population by 2013. The number of users is expected to go up in the coming years. The ITU World Report (2016) mentions that approximately 34% of people in developing nations have access to the Internet. This simply implies that the computer hardware sector must increase its production and operate globally to be able to maintain its competitive nature in the future. This sector was dramatically transformed by the development of the global market.

According to Athreye and Keeble (2000), globalization can impact the competitive environment in the computer hardware sector in the coming years. This is because the PC hardware sector has numerous opportunities for advancement and growth as many developing nations continue increasing their technology demand. China and India, for example, have the largest populations in the universe, accounting for approximately 2.7 billion people (World Bank, 2016).  Therefore, it is argued that these countries possess the greatest demand for market growth as the computer sector attempts to expand its global market. According to Gartner Research Company, in India alone, there has been an increase of approximately 13% of computer hardware units shipped per year (Martin, 2011). This figure has continued to increase.  According to Singh (2016), India has shown drastic raise in the shipment of personal computers and other hardware. Singh continues and states that as of 2016, India shipped 2.2 million personal computers between April and June, making growth of 7.2% over the quarter.

As for vendors, the computer hardware market is just a little different from the rest of the world. In particular, Lenovo, Dell, and HP together accounted for approximately two third of the global market share. As Lenovo is the leading computer vendor with a 21% market share worldwide, the Chinese firm had to be rated as number 3 in India with approximately 16% (Singh, 2016). HP is the leading top company in India and many parts of Asia with 28.4%, whereas Dell follows with 22.2%. Without any dispute, this is a sign that the process of globalization is really impacting the competitive environment of the computer hardware sector. However, for computer companies to be successful in the global market in the future, they must invest in different countries to be able to offer prices and thus, sustain their competitive environment.

Another country that shows that the process of globalization impacts the future of computer hardware if China. In fact, China offers a huge potential market for computer hardware as it is the largest nation in the world (World Bank, 2016). According to Lewis (2007), China continues to develop technically and economically; thus, its demand for computer hardware and other accessories has constantly increased. In 2011, the PC shipment in China, according to the International Data Corporation, indicates that the country imported over 18.5 million units. This figure has surpassed that of the U.S of 17.7 million units. However, this figure is projected to continue to grow as the population increases. According to Statistic Portal (2016), as of 2014, the number of computers per 100 households was 53 computers. In 2013, there were approximately 49 computers per 100 households in China (Statistic Portal, 2016). In this view, all these signs point toward globalization, leading to increased computer hardware and growth within many emerging markets.

Discussion

Undoubtedly, technology is one of the core factors that have drastically contributed to the increase of globalization. As with the presence of other aspects of globalization, the change that has occurred in technology is not a new phenomenon. In fact, computers have a background that dates back many years ago, but it has managed to transform and reach o the uttermost part of this world. People use computers to trade, communicate, and process goods and services in businesses. It is evident from the analysis of India and China that the number of computer hardware increases each year. In this respect, these changes have been achieved and spread to many parts of the world just because of globalization. So, without a doubt, globalization has enabled computer companies, especially those dealing with hardware, to operate in different parts of the world. Nevertheless, the pace in which computer hardware companies change is unpredictable shortly due to the changing trend of globalization.

Conclusion

After carrying out this research, it can be concluded that the computer hardware sector is rapidly growing not only in India and China but to many other parts of the world, and the industry maintains to be important and profitable in many years to come. To remain competitive in the future, these companies must utilize the advantages of globalization, such as operating in different countries to reduce operation costs and take advantage of tax benefits. By operating globally, the computer hardware sector will remain focused and prioritize its revenue into research and development to maintain a competitive environment presently and in the future.

Indeed, the economic and population development of China and India offers a dynamic opportunity for the sector to expand in the markets and other countries in the region. Additionally, small computer companies also take advantage of globalization. These companies can work in the same environment as multinational companies and thus, learn from them. However, small companies operating locally need to increase their revenue to become successful in the current globalized market and compete with large firms globally. If they fail to do this, they will likely continue to be brought down by multinational firms within the industry. Therefore, investing in the computer hardware sector would be appropriate and safe due to the increased demand and technological growth rate in many parts of the world. Additionally, computers are said to have a continuous advantage of advancement in an attempt to satisfy the ever-changing longing of consumers today and in the future.

References

Arora, A., and Gambardella, A. 2004. The globalization of the software industry: perspectives and opportunities for developed and developing countries (No. w10538). National Bureau of Economic Research.

Athreye, S., and Keeble, D. 2000. Technological convergence, globalization and ownership in the UK computer industry. Technovation, 20(5), 227-245.

Berger, S., 2000. Globalization and politics. Annual Review of Political Science, 3(1), 43-62.

Engardio, P., Bernstein, A., Kripalani, M., Balfour, F., Grow, B., and Green, J. 2003. Is your job next?. Business Week, 3, 50-60.

Globalization101.org., 2014. Technology and Globalization, [Online] Available from: https://www.globalization101.org/uploads/File/Technology/tech.pdf, Accessed on 15^th Dec 2016.

Hirst, P., Thompson, G., & Bromley, S., 2015. Globalization in question. John Wiley & Sons.

IBIS World., 2016. Global Computer Hardware Manufacturing: Market Research Report. [Online] Available from: http://www.ibisworld.com/industry/global/global-computer-hardware-manufacturing.html, Accessed on 15^th Dec 2016.

Karimi, J., Gupta, Y. P., & Somers, T. M., 1996. Impact of competitive strategy and information technology maturity on firms’ strategic response to globalization. Journal of Management Information Systems, 12(4), 55-88.

Lewis, J. I., 2007. Technology acquisition and innovation in the developing world: Wind turbine development in China and India. Studies in comparative international development, 42(3-4), 208-232.

Orozco, M., 2002. Globalization and Migration: The Impact of family Remittances in Latin America, Latin American Politics and Society.

Singh, M., 2016, Unlike rest of the world, this place continues to see growth in PC demand, [Online] Available from: http://mashable.com/2016/08/25/pc-shipment-india-q2-2016/#BbhjXoYrb8q1, Accessed on 15^th Dec 2016.

Statistic Portal., 2016, Number of computers per 100 households in China from 2000 to 2014, [Online] Available from: https://www.statista.com/statistics/278758/number-of-computers-per-100-households-in-china/ Accessed on 15^th Dec 2016.

The ITU World Report., 2016. ICT Facts and Figures, [Online] Available from: https://www.itu.int/en/ITU-D/Statistics/Documents/facts/ICTFactsFigures2015.pdf, Accessed on 15^th Dec 2016.

The ITU World Report., 2016. ICT Facts and Figures, [Online] Available from:

  https://www.itu.int/en/ITU-D/Statistics/Documents/facts/ICTFactsFigures2013-e.pdf, Accessed on 15^th Dec 2016.

World Bank., 2016. India and China Population, [Online] Available from: http://data.worldbank.org/indicator/SP.POP.0014.TO.ZS?locations=IN-AD-CN, Accessed on 15^th Dec 2016.