Globalization Essay

1704 words - 7 pages

Wesley Jackson 12/1/13
Economics Paper #3 Period 4

Globalization is the worldwide movement toward economic, financial, trade, and communications integration. Globalization implies the opening of local and nationalistic perspectives to a broader outlook of a connected and interdependent world with free transfer of capital, goods, and services across national frontiers (businessdictionary) However, it does not include unhindered movement of labor and, as suggested by some economists, may hurt smaller or fragile economies. Globalization has helped companies increase in revenue and sales per year mainly because more people now have access to stores that are now convenient ...view middle of the document...

They also expect high quality and low prices. All these expectations need a response from the company, otherwise sales of company will decrease and they will lose profit and market share. Most companies that do expand do show an increase in revenue, mine definitely have. I invested in McDonalds, Best Buy, and Walgreens before expansion, my earnings from these companies have sky rocketed ever since expansion internationally and I don’t expect anything less.
McDonalds, before globalization, was only on the rise. One of the best, if not the best fast food chain of all time and now with their expansion worldwide it made it easy for customers to access their restaurant. With 32,000 outlets in 117 countries, it is the biggest fast food chain in the world. The clown-fronted burger outfit employs a staggering 1.7 million people, and in the first three months of 2011 alone it made $1.2bn in profits on the back of revenues of $6.1 billion (Globalresearch). Before expansion overseas this company made United States hit its billion-dollar mark and definitely craved more. In 1991 McDonald's opened more restaurants overseas than in the United States: 427 abroad, compared with just 188 in the United States. The company planned to open 450 in foreign countries and 250 in the United States this year, with Latin America and Asia expected to be the fastest-growing areas (NYTimes). See that was in 1992. Much of the growth of the 1990s came outside the United States, with international units increasing from about 3,600 in 1992 to more than 11,000 by 1998. The number of countries with McDonald's outlets nearly doubled from 59 in 1992 to 114 in late 1998. Expanding internationally helped their sales increase on a large scale. 10 years later their price per share has double and then some with even more restaurants around the world. After McDonald's opens up its first-ever outpost in Vietnam's Ho Chi Minh City, the fast food chain will officially have 34,392 restaurants in 116 countries around the world. So if the company has an increase in number of stores at various locations doesn’t it mean they should also increase in sales? In most cases they do, in some they don’t but this company definitely does. 1992, McDonald's earnings rose to $958.6 million, or $2.60 a share, from $859.6 million, or $2.35 a share, in 1991. Revenue rose to $7.13 billion from $6.7 billion. System-wide sales rose to $21.89 billion from $19.93 billion (ChicagoTribune). But that was in 1992. In 2012, on a worldwide basis, the company reported, its chain’s 2012 system-wide sales increased by 2.7 percent from last year, to $88.29 billion, nearly tripling the system-wide sales from 10 years ago (nrn).
Mcdonalds will forever be at the top their game, expanding overseas just made their sales increase so much. This company is fit for any economy because of how pricing is set up, it is easier for the customer. "McDonald's has been an execution wonder," says UBS analyst David Palmer....

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