Effects Of Globalization In Companies In Mexico

Effects of globalization in companies in Mexico

The objective of this essay is for the reader. As the objective of the essay is that the reader is well informed in most of the essay shows many data so that the reader can create an own criterion about the subject and take his own conclusion.

In this essay we are going to touch the issue of globalization in Mexico, we will also see the definition of globalization that will be more attached to the economic environment. Let’s see a bit of how globalization began in Mexico. We also play the issue of Mexico’s treaties (very little). We will also see that globalization benefit the previously industrialized metropolis and that rural areas are affected by more, that globalization made inequality between rich and poor. We will also see the good and bad points of globalization in Mexico.

Then we will see some cases of companies that knew how to take the wave of globalization such as Bimbo and CEMEX and thanks to this they managed to become one of the most important companies in the country. In turn also see us cases of companies that did not know how to surf the wave of globalization and ended. Like the saucepan of the company Canada Calzado or as after they ended up being bought by the competition. To finish with this essay I will give a conclusion of what is seen and give a brief opinion about the subject.

Why I consider that this issue is important is that I realized that many people if they know that it is globalization, but do not have the necessary information in order to give their opinion and have a criterion about the subject.

First of all, in order to understand the subject we have to be clear about what globalization is. ´´ Globalization refers to the global economic integration of many national economies in a single global economy, mainly due to free trade and mobility of free capital, but also by easy or uncontrolled migration. It is the elimination of national borders for economic purposes. International trade becomes comprehensive trade´´ (Herman, 1999).

In other words, globalization is the connection between countries that affect both culturally, economically and socially to our environment. In turn, the elimination of borders between countries, both culturally and technologically

How do globalization affected Mexico?

On the Lafeder website, it says that globalization had its beginnings in 1985 when Mexico adopted a commercial liberalization policy and at the same time with the elimination of foreign investment restrictions. Globalization was mainly developed during the 1990s. According to Lifder, one of the most weight treaties were the North American Free Trade Agreement (NAFTA) signed in 1994 with the United States and Canada. Time known as Mexico – United States – Canada (TMEC) and the Free Trade Agreement between Mexico and the European Union (TLCUEM), signed in 2000.

The northern and central regions of the country experienced the process of globalization with greater intensity because it was a period of improvement towards working conditions, increased salary and unemployment reduction. It was also an intense period of technological modernization. But not everything was roses color since in rural areas globalization caused the disappearance of certain industries, such as corn, in addition to the fall in prices and salaries. Some of the most notorious negative effects were: the increase in inequality and non -equitable distribution of wealth, environmental degradation, especially in the northern states, due to the increase in the consumption of fossil fuels and in the emission of greenhouse gases.

How does globalization affect companies in Mexico?

To start answering the question I would like to cite a phrase, “in globalization you cannot be a mere spectator. If you do not participate, you become your victim ”this phrase was said by Daniel Servitje, the Bimbo Group CEO. I started with this phrase because the CEO of one of the most important companies in Mexico said it.

The answer to this question could be said that globalization hit each company differently, since some companies managed to take the good of globalization and thus be able to become the most important companies in the country, but other companies were instead boughtfor the competition from abroad and others ended up closing and being bought to save them. With the following information I base my answer.

When in 1994 the Free Trade Agreement between the United States, Canada and Mexico, which eliminated the tariffs and restrictions imposed by the Government to changes in goods and services, the Bimbo company did not expect much to do business since in1995 began to export bread and pastries to the United States to serve the Hispanic market. Thanks to the Free Trade Agreement and, after a series of strategic purchases they could distribute to the north of the border wheat tortillas, dough for pizzas, muffins, donuts and paneclos, among other products. Thanks to globalization and good strategies to expand the company, Bimbo has managed to reach 19 countries and has been the first Latin American company to reach the Chinese market.

Another example of another company is CEMEX, in the last fifteen years the company has been able to climb from being a regional company to multinational leader and being a third cement manufacturer in the world. Today CEMEX operates in 14 countries and has commercial relations with 60 nations. This achievement is due to globalization and the need for survival generated by globalization.

Now, according to the study of the McKinsey Global Institute, countries with a greater number of connections in the global network, investment flows increase GDP growth by up to 40% more than less connected countries. According to Forbes Mexico, Mexico has 12 free trade agreements with 44 countries and 31 agreements for the promotion and reciprocal protection of investments, among others.

Companies can also end up being oppressed by globalization, as with the case of the two large Mexican brewer. This is the case of Grupo Modelo and Cervecería Cuauhtémoc Moctezuma, which are now the majority property of its great foreign multinational competitions Heineken and AB Inbev.

 Companies that have reached this stage know that now they have to face the competition of multi-global. A company that becomes global tends to standardize its products, with small adjustments to adapt them to each market or regions, or two categories of products, one for emerging markets, with the aim of benefiting from economies of scale. 

Another clear example that globalization can be deadly for a company is the case of Canada footwear. The company became the most important shoemaker in Latin America. The fall of the company was thanks to its null ability to adapt to commercial opening. With the arrival of new footwear to the country and with better prices for the public, the market began to forget the company. When the country’s economy was opened, the footwear industry began to increase its exports, but were overcome by imports, which has generated a commercial deficit. Another cause of unfair competition, mainly for the Chinese market. The company ended up by Grupo Coope.

With these examples that we have just seen that globalization can become good or bad depending on how the company knows how. This leads me to another point, globalization is not bad or good, globalization will affect a country or company depending on whether or not they are prepared, so much technologically and socially.

In summary, in this essay we saw that it is globalization, that most of the benefits of globalization were left by the regions of the north and the center. And that depending on the company is going to be how I affectionate. This trial can be summarized at the following points:

• Thanks to globalization, the development of industries such as manufacturing, automotive and electronics were improved.
• We also saw that globalization gave more jobs, technological advances and better salaries, but rural areas were neglected, the inequality and equitable distribution of wealth were increased., Environmental degradation.
• We also saw some companies that benefit the globalization and thanks to this some giants were made in the industry to which they are dedicated. On the other hand, others did not know how to take the opportunity and apart suffered blows of unfair competition.
• Globalization also increased pollution of the country grace to increase the burning of fossil fuels among others.

In my opinion globalization if it is good and necessary, but as everything in this country is done quickly and did not think that most companies could not compete with the prices and quality of the foreigner, they also did not plan how it was going toaffect the rular areas of the country.

Bibliography

• Cajal, a. (S.F). Globalization in Mexico: history, advantages and characteristics. Obtained from Lofede: https: // www.Lifer.com/GLOBALIZATION-MEXICO/## TARGETTEXT =%20GloBalization%C3%B3N%20en%20m%C3%A9xico%20FUE, A%20LA%20INVERSI%C3%B3N%20EXTRANJERA%20DIRECTA.
• GLOBALIZATION101. (2016). What is globalization? Obtained from Globalization101: http: // www.Global-Workforce.GLOBALIZATION101.org
• Bimbo group. (2013). From Mexico to the world. Obtained from Grupo Bimbo: https: // Grupobimbo.com/en/sala-de-prensa/news/de-mexico-al-world
• Informator, e. (October 15, 2017). The Canadian footwear giant … and an industry in renewal. Obtained from Informator: https: // www.informer.MX/ECONOMY/EL-GIGAN-DE-CALZADO-CANADA… -Y-A-INDUSTRIA-EN-RENOVACION-20171015-0074.HTML
• Loera, m. AND. (September 18, 2014). Birth, boom and sunset of Canada footwear. Obtained from UDG.mx: http: // www.UDG.MX/ES/News/Birth-Aug-Y-Ocaso-de-Calzado-Hanada
• Nayef r.F. Al-Rodhan and Gérard Stoudmann (2006). Definitions of Globalization: A Comprehensive. (s.F.).
• Orchid, or. (November 6, 2014). Globalization, the new mentality of Mexican companies. Obtained from Forbes Mexico: https: // www.Forbes.com.MX/Globalization-and-the-New-Mint-of-the-Mexicans/
• S.A. (September 20, 2011). The globalization of Mexican companies. Obtained from Expansion: https: // expansion.MX/EXPANSION/2011/09/14/LA-GLOBIZACIN-DE-LAS-MEXPERAS-MEXICANS