Day by day, the world is becoming a smaller place. Today, no distance is far for mankind. Everything is within the reach. Developments in Communication, transport, etc have resulted in exposure to different various newer things. The demand has increased; man wants everything that his eye sees. But the old markets have saturated to such an extent, that there is a demand for newer markets. This has led to the process of free movement of people, goods, services; etc across boundaries. This concept is termed as Globalization. Due to Globalisation, economies have started becoming more and more increasingly integrated and inter-dependent.
The free market is an economic system based on supply and demand with little or no government control. It is a summary description of all voluntary exchanges that take place in each economic environment. Free markets are characterized by a spontaneous and decentralized order of arrangements through which individuals make economic decisions. Based on its political and legal rules, a country’s free market economy may range between very large or entirely black market.
A decentralized market is a market structure that consists of a network of various technical devices that enable investors to create a marketplace without a centralized location. In a decentralized market, technology provides investors with access to various bid/ask prices and makes it possible for them to deal directly with other investors and dealers rather than with a given exchange. In a decentralized market, usually digital, where buyers and sellers can supersede the traditional method of trading within an exchange, instead dealing directly with each other. The foreign exchange market is also an example of a decentralized market because there is no one physical location where investors go to buy or sell currencies. Forex traders can use the internet to check the quotes of various currency pairs from different dealers from around the world.
The advent and rise of blockchain technology and cryptocurrency have created more opportunities for decentralized markets to operate. Through such technology and mediums, buyers and sellers are afforded a sense of security and trust in transactions without the need for a central clearinghouse to monitor and affirm the transactions. Decentralized markets are emerging technologies which give people the ability to participate in online commerce that is completely different from the traditional centralized model.
Globalisation refers to the integration of markets in the global economy leading to the increased interconnectedness of national economies. Markets where globalisation is particularly common include financial markets, such as capital markets, money and credit markets, and insurance markets, commodity markets, including markets for oil, coffee, tin, and gold, and product markets, such as markets for motor vehicles and consumer electronics.
Developments in transport and communications have accelerated the pace of globalisation. The internet has enabled fast and 24/7 global communication. The widespread use of smart phones has enabled global shoppers to have easy access to 'virtual' global markets. The rise of new electronic payments systems, including e-Wallets, pre-pay and mobile pay, e-Invoices and mobile pay apps, also facilitate increased global trade. Increasing in capital mobility has also acted as a stimulus to globalisation. When capital can move freely from country to country, it is relatively straightforward for firms to locate and invest abroad, and repatriate profits.
The emergence of footloose multinational and transnational companies (MNCs and TNCs) and the rise in the significance of global brands such as Microsoft, Apple, Google, Sony, and McDonalds, has been central to the emergence of globalisation. Globalisation enables worldwide access to sources of cheap raw materials, and this enables firms to be cost competitive in their own markets and in overseas markets. Seeking out the cheapest materials from around the world is called global sourcing. Because of cost reductions and increased revenue, globalisation can generate increased profits for shareholders. Globalisation has led to increased flows of inward investment between countries, which have created benefits for recipient countries. These benefits include the sharing of knowledge and technology between countries. In the long term, increased trade is likely to lead to the creation of more employment in all countries that are involved.
Global market economy or global economy means a place where all the economies of the world merge and transactions of goods and services are carried on at the international level. The domestic prices of individual products fall in line with the international prices, now determined by international demand and supply of that commodity. Global market economy functions on the emergence of worldwide production markets and a broader access to wide range of products for companies and consumers. It also entails lower restrictions on the movement of goods and services across the globe. Globalization is also said to bring about a rise in employment in the developing nations with companies in the developed world outsourcing their functions due to low cost labour available. Global markets like the crude oil market are having a tremendous impact on the world economy. With greater assimilation of the world cultures and improved standards of living supposedly achieved as a result of globalization, benefits of these are only limited to the privileged few in the developing economies already reeling under poverty, illiteracy and unemployment. Globalization brings global markets and the concomitant global competition to the fore. This sometimes throws the previously protected domestic producers out of employment and worsens their condition. Thus, the influence of the global market economy is not always beneficial to the less developed countries where the poor are made poorer while the rich get richer.
Marketing globalization is a synergistic term combining the promotion and selling of goods and services in an increasingly interdependent and integrated global economy. It makes companies stateless, without walls, with the internet an integral marketing and cultural tool. Understanding consumer needs within target countries helps formerly ethnocentric companies build a global marketing mix in which product, price, place and promotion are geared toward a specific country's needs.
Over-specialisation, such as being over-reliant on producing a limited range of goods for the global market, is a risk associated with globalisation. A sudden downturn in world demand for one of these products can plunge an economy into a recession. Many developing countries suffer by over-specialising in a limited range of products, such as agriculture and tourism. Globalisation generates winners and losers, and for this reason it is likely to increase inequality, as richer nations benefit more than poorer ones.
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