Market A murkeL Is u pIuce wIIcI uIIows LIe purcIuser und LIe seIIer Lo InvenL und

guLIer InIormuLIon`s und IeLs LIem curry ouL excIunge oI vurIous producLs und
servIces.

Globul sopermurket: A gIobuI supermurkeL Is pIuce wIere buyers und seIIers ure
brougIL LogeLIer und LIere LIey excIunge goods und servIces uL InLernuLIonuI IeveI.
L Is u brouder concepL us compure Lo murkeL becuuse IL InvoIves Lrude beyond LIe
boundurIes oI u counLry.

G|oba| supermarket keta|| cha|ns
Motks ooJ 5peocet uk boseJ
wolMott u5A boseJ
7leveo Iopoo u5A boseJ
Mott 5ootb koteo boseJ

Advantages of g|oba| supermarket

Sector C||mbs as Share of Lxports
1he knowledge Lconomy wlLh lLs freer flow of lnformaLlon creaLes new
compeLlLlon as lL expands |nternat|ona| trade |n serv|ces ln Lhe pasL Lwo
decades exports of serv|ces have r|sen faster than goods part|cu|ar|y |n the
Un|ted States





6reoter 5pecio/itotion
1he crosscurrenLs ln servlces Lrade show LhaL global markeLs expand Lhe scope for
speclallzaLlon Je do what we do best and trade for the rest lor an economy as
a whole speclallzaLlon leads Lo producLlvlLy galns beyond whaL flrms can achleve
aL Lhe mlcroeconomlc level Lhrough new Lechnologles and lnvesLmenLs ln planLs
and equlpmenL lndeed one of globallzaLlons greaLesL beneflLs lles ln lLs
lncenLlves Lo reorganlze economlc acLlvlLy and reallocaLe global resources Lo yleld
greaLer ouLpuL
orqer Morket 5ite
1he Lelephone wouldnL have been worLh much had Alexander Craham 8ell llved
on an lsland of a dozen people all wlLhln shouLlng dlsLance lL Lakes large
numbers of cusLomers separaLed by vasL dlsLances Lo make Lelephone servlces
proflLable
lor many goods and servlces markeL slze maLLersa loL ln addlLlon Lo Lhelr role
ln wldenlng Lhe search for lnpuLs and human LalenLs larger markeLs provlde
added lmpeLus for lnnovaLlon buslness formaLlon and rlsk Laklng Lxpandlng Lhe
poLenLlal cusLomer base also helps creaLe vlable markeLs for hlghly speclallzed
producLs PousLonbased Lncyslve harmaceuLlcals for example ls looklng Lo a
global markeL Lo make lLs new LreaLmenL for a rare lung condlLlon pay off
xtended conomies of 5co/e
lndusLrlal Age facLorles usually operaLed wlLh hlgh flxed and hlgh varlable cosLs
9roduct|on became cheaper as compan|es ramped up outputbuL only Lo a
polnL AfLer LhaL churnlng ouL each unlL became more expenslve and servlng
addlLlonal demand lncreased cosLs uecreaslng reLurns Lo scale evenLually led Lo
hlgher prlces
rooder copito/ Morkets
Coods and servlces arenL alone ln movlng more
readlly across borders As barr|ers to cap|ta| f|ows
have fa||en lnvesLmenL moneyLhe drlvlng force for
econom|c growthhas been freed Lo seek Lhe hlghesL
reLurns anywhere around Lhe globe

lL has done so wlLh a vengeance Slnce 1980 accumulaLed fore|gn |nvestment |n
stocks and bonds has r|sen from 1S percent to S9 percent of wor|d output
D|rect |nvestment |n overseas compan|es has r|sen from S2 percent to 24
percent



etter Production lunctions
ln a more lnLegraLed global economy cap|ta| |abor and techno|ogy are freer to
comb|ne |n new and more eff|c|ent ways ompanles can use the ent|re wor|d to
carry out the|r product|on processes reallzlng slgnlflcanL cosL savlngs LhaL can be
passed on Lo consumers
1he lndusLrlal Age llmlLed companles efflclency As long as raw maLerlals had Lo
be Lrucked ln and workers had Lo be on slLe producLlon funcLlons rarely exLended
beyond a reglon or crossed naLlonal borders 1he decllne ln shlpplng cosLs
parLlcularly alrfrelghL wlLh lLs fasL dellveryallowed producers Lo broaden Lhelr
range of physlcal lnpuLs ln a slmllar way cheaper communlcaLlons have glven
servlce companles lncenLlves Lo globallze Lhelr lnformaLlon operaLlons

D|sadvantages of g|oba| supermarkets
O Dneven uistribution of weo/th WealLh ls sLlll
concenLraLed ln Lhe hands of a few lndlvlduals and Lhe
common man ln a developlng counLry ls yeL Lo see any
ma[or beneflLs of globallzaLlon
O ncome 6op etween ueve/oped ond ueve/opinq
countries 1he wealLh of developed counLrles conLlnues
Lo grow Lwlce as much as Lhe developlng world
O uifferent woqe 5tondords for ueve/opinq countries A
Lechnology worker may geL more value for hls work ln a
developed counLry Lhan a worker ln a developlng
counLry
O everso/ of 6/obo/itotion ln fuLure facLors such as war
may demand Lhe reversal of Lhe globallzaLlon (as
evldenL ln lnLer world war years) and currenL process
of globallzaLlon may [usL be lmposslble Lo reverse
O Cu|ture and g|oba||zat|on have really become lnLerwoven aspecLs ln
modern llves buL one musL remember Lhe negaLlve effecLs of globallzaLlon
as well It affects the cu|ture adverse|y