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The current business world is characterized by a small business distance between the producers and the consumers. Globalization of the market plays a major role in creating this effect (Young, 2011, p. 2). This phenomenon has opened up markets to both local and foreign suppliers and consumers. The global competition that results affects the daily operations of the company and industry. This paper will explore the implications of global competition on a company in regards to its business planning.

The economic implications of global markets are significant in every nation thus fostering a need for the continuous reevaluation of policies and regulation. Companies that seek to survive and assure profitability have to effectively manage the effects of global competition on their business practice (Young, 2011, p. 4). Addressing global competition is done by focusing on the impacts the global market has on the internal and external environment of the business. Global competition affects the company decisions concerning; human resources management, product supply and demand, and the Market structure.

Human Resources Management

The effectiveness of any business is dependent on its human resources. The decision making process and implementation of organizational goals have to work together to reach the set goals. Global competition changes the criterion for fulfilling this need. Most companies and industries have to explore the option of outsourcing to acquire the necessary human resource at a lower cost. This practice has both risks and benefits (Kale, 2008, p. 504).

Global completion also means that a firm might have to set up production plants in foreign countries. This allows access to the foreign markets or may increase production capacity of the company. Former practice of employing expatriates is being limited by the emergence of standardized education. This means that sourcing for specialized labor is easier but dependent on the labor relations in the foreign country.

Companies existing in various locations worldwide are also subject to local labor practices and policies (Young, 2011, p. 6). The decisions for staffing have to comply and conform to the existing environment to ensure optimum production.

Product Supply and Demand

The global competition creates a need for effective management of the product supply and demand. Demand for a product in a globally competitive market is created by effectively managing the marketing mix. The company has to use a strategy which is localized for its target market. This means that the firm might have to focus its energy towards creating power brands that give it market dominance (Kale, 2008, p. 507). In cases where the company is competing with a larger global brand, an effective product, pricing, promotion in the local market might create demand to enable its profitability.

 Creating an effective supply chain in the market is also important. The company has to ensure that its product is accessed by its target consumer at their convenience. This entails adoption of an effective distribution channel (Kale, 2008, p. 508). This decision will put the company in a position to favorably compete with other players in the industry.

Market Structure

The market structure that is created by global competition is dependent on the product type. Demand and supply factors on the product have a crucial role to play on the market structure. While local markets favor monopolies and oligopolies, global competition increases the product supply thus creating a more perfect market (Kale, 2008, p. 508). This means that the companies in the industry may have to create the best possible products for its customers in order to be profitable.

The markets in a global competition are also subject to the macro-economies of different regions in the world. The market structure of the company is therefore constrained by the existing socio-political and legal policies that exist in the various regions (Young, 2011, p. 6).


The size of the market in the world has grown considerably. This global market translates into higher profits for companies in exploring such markets. On the other hand, it means that the markets are highly competitive creating a need to put in place effective structures to ensure survival. The company has to evaluate its labor needs and develop and effective hiring policy. The company also has to create a powerful brand to ensure a dominant market presence (Young, 2011, p. 7). In addition to this an appropriate distribution channel needs to be established. The market structure adopted by the company also has to take into account the product type and the preexisting social environment.


  1. Kale, S. U. (2008). Global Competitiveness: Role of Supply chain Management. Conference on Global Competition & Competitiveness of Indian Corporate (pp. 503-511). Pune:
  2. Young, J. A. (2011). Global Competition—The New Reality: Results of the President’s Commission On Industrial Competitiveness . Retrieved December 2, 2013, from

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