Impact Of Globalization On Fashion And Pharmaceutical Industries Economics Essay

violation Of sphericalisation On Fashion And Pharmaceutical Industries economic science Essay globalisation is a broad c oncept and it has been defined in legion(predicate) ways by disparate authors. According to Freedman(1999 ,p 156) and Woods(2000,p78), planetaryization core various quantitative and qualitative developments ranging from a dramatic increase in international transactions, especially in finance, to the international and spatial reorganization of intersection pointion, the global harmonization of tastes and standards, liberalization, deregulation, privatization, the arrival of bracing-made information technologies, the global diffusion of information, values, and ideas, enormous population transfers, trends towards a universal world culture, the spread of a world-wide preference for democracy, and the erosion of the nation state. Globalization has varied dimensions want economic, cultural, policy-making and environmental. It has different reachs on dif ferent industries with varying intensities based on these different dimensions. In this essay, the impact of globalisation on mode and pharmaceutic industries atomic number 18 examined and compared. This is to examine the differing intensities with which globalisation affects these two industries.In the next two sections, the different impacts of globalisation on excogitate and pharmaceutical industries are discussed separately. In the ultimately section, the impact of globalisation on some(prenominal) these industries is compared and conclusions are made.2. Impact of Globalization on Fashion IndustryThe most important elements of form patience are textile, clothing or apparel and footwear industries. It also includes food, housing, music, automobiles, perfumery and spectator products. According to Davis (1992), one main distinguishing feature of fashion constancy is its powerfulness to differentiate amidst different neighborly signifieres or otherwise called so cial differentiation. For example, the most fashion satis agenty items are always very expensive and advise be purchased by the upper class while the mall class goes for cheaper items. This made it necessary to produce the fashionable items in cheaper price in the fashion effort to achieve the selling target (Graham et al, 2006).Globalization affects fashion sedulousness with the production, distribution and selling channels. One main impact of globalisation is to keep the people informed and updated on each and all(prenominal) recent trend in the fashion effort by experient and unfermented media like radio, television, sassyspapers, internet, mobile phones etc. Consequently, now there is a tendency for imitating Western fashion all over the world successor the traditional clothing in each nation. For example to highlight secularism, a ban has been imposed on women vesture headscarfs in France by considering wearing headscarf as a traditional religious symbol. The go vernment considered wearing headscarf adversely affecting the immigrants to assimilate into the Western culture, which is called cultural acculturation (Huntington, 1997). This cultural assimilation is an important impact of globalisation in fashion industry.The updating of new trends in the fashion industry was based on the economies of scurf approach. This is intend to obtain new trends in fashion to all markets at remove times and at the correct prices for reducing the total production cost. The engage for reducing production be has resulted in the tendency among the developed nations to outsource production to growing nations like china where the production will be cheaper. This has adversely abnormal the local business in developed nations and violates the economies of scale principle. The local industries got affected badly because of this outsourcing of production and many of them were non able to continue operating consequently. Eg producing a steel, t-shirt in We stern China where no minimum wage regulations are there or else of producing it in Australia for reducing the production cost. In this campaign, achieving high profit margin in Australia is very difficult compared to that in China (Purdy, 2000).Globalization has changed this phenomenon however by reducing the transportation and communication costs and thereby increasing the accessibility of people to new fashions all over the world. This has also increase the look sharp of production in fashion compared to the olden days. The modern communication tools like internet forums dupe enabled the development and spreading of new scientific innovations, which has change magnitude the effectiveness of production in all nations. Globalization has thus resulted in to a greater extent exchange of ideas and information regarding the availability of textile fabrics and production, which has also resulted in a rise in the demand for products.The signification of all these was the brand nam es monopolizing the fashion industry and the spread of individualistic attitude instead of tolerate materialistic especially among the middle classes. Base on these global conditions, the trends in fashion industry were to tempt the individuals for self-improvement instead of accept them as they are. The most visible example of this can be seen from the suppuration trend of becoming thin models as the ideals of female beauty. This has proved to be anatomically to a greater extent correct and has several psychological and physiological impacts. However, the proscribe side is that this has created by the pressure among female models for becoming thin models (Collins, 1997).The merits of globalisation in fashion industry can be considered as the replacement in the trends among the middle class from buying outsourced products under the influence of post materialistic ideologies to buy more topically produced ones. However, the difficulty is that the population of middle class is s een to be decreasing compared to the other groups. In addition to these, other impact of globalisation was the shift in the production from developing to developed nations to go with the principle of economies of scale mostly under the influence of new and old media all over the world. However, this cannot be considered as a complimentary trend especially under the scenario of the introduce economic crisis (Graham et al, 2006).According to Abarnathy et al (2003), the globalization of textile and clothing industry is not a new one and its history can be traced back to even the ordinal century. According to this study, in the earlier days the globalization was concerned with ordure of wear down and capital across nations based on comparative factor costs and productivities for aim, capital and other inputs between nations and their impact on product costs, changes in international exchange rates, quotas and tariffs. In the enter scenario, the movement of labour and capital is based on around other aspects of distribution in addition to these like disposition retailing, product proliferation, onshore and offshore outsourcing. The Multi fictitious character Arrangement that has been existing in the textile industry for many geezerhood ended in 2005 with the decision of all WTO members to eliminate all quotas on textiles. China after accessing WTO in 2002 became a quota free nation in the WTO in the alike year.The overall picture in the fashion industry thus shows that globalization has resulted in falling transportation and communication costs .This has significantly affected the growth of the markets in the industry .The concept of lean retailing has developed combining reduced transportation and communication costs as well as new technical innovations. The main problem however with the lean retailing is that it has enhanced the pricing pressures (Abarnathy et al, 2003). As a part of globalization accomplish, the quotas on textiles also were remove d with effect from 2005.3. Impact of Globalization on Pharmaceutical IndustryIn the case of pharmaceutical industry, globalization has its effect through with(predicate) the combination of expert and economic dimensions (SickBlog, 2009). The commission of this industry is to research, develop and distribute doses. Globalization movement affects the industry through three major segments namely production, research and development and marketing. In the present era of globalization, it is describe in many studies that life-size companies in the industry, which were once in their better times, are now in difficult stages generally imputable to inefficient Research and Development (RD)(Dufala,2007Pouw,2008 etc). The established companies are inform to scram failed in producing new items into the market mainly due to the advance RD costs. For example, Pfizer, which was the fourth largest multinational pharmaceutical corporation in the world, is now veneering very bad time w ith a 10-year market exclusivity granted to new medicines.Globalization has resulted in enhanced availability of information, which has changed the role of doctors (Dufala, 2007). For example, in the case of patients who turn over information from internet, the decisions made by doctors are found to be confutable. Thus, the enhanced availability of information has affected the value chain in pharmaceuticals. It has also made the regulatory agencies to be more cautious. Thus, globalization bring has affected the marketing by shifting towards patients.As a consequence of globalization, the generic markets are reported to be growing by fetching advantage of the market exclusivity of original drugs and producing in low cost places for eg Ranbaxi and Teva. In addition to these two developments, may small biotechnology companies face problems due to the difficulty in financing the projects in these companies (Dufala, 2007).All the developments as a part of globalization treat have r esulted in enhancing competition in the industry while it has not increased pressures for restructuring inappropriate other industries. beat Research Organizations (CROs) have prominent role because of globalization process (Shuchman, 2007). The globalization has resulted in increased mergers and acquisitions of the CROs. Examples of CRO s are Pharmaceutical crossing Development (PPD), Quintiles, Parexel, Kendle and Covance. The CROs are technologically very innovative and makes se of new business concepts. Thus, it can be seen that CROs were the main actors who were able to utilize the benefits of globalization .At the same time big pharmaceutical companies were not able to do so.It is argued that globalization has improved the conditions of developing nations by improving access to medicine by joining organizations like World Trade Organization (WTO). This has been enabled through compulsory licensing or by importing cheaper versions of drugs in advance the expiry of patents (Slick Blog, 2009). On the other hand, it is argued that the Trade Related Aspects of Intellectual Property Rights (TRIPS), which increases the scope, duration and reporting of the industrial patents of the WTO members, has marginalized the traditional knowledge of local people. Moreover, it has been argued that the growth and development of the home(prenominal) pharmaceutical companies are adversely affected by TRIPS (Pouw, 2008). However, exceptional cases are the Indian pharmaceutical companies like Ranbaxi and When Cipla, which have obtained significant growth and grow their operations.It is also argued that globalization has adversely affected the developing nations through some other ways. In spite of the TRIPS having clause that exempts nations suffering from diseases like help from patent observation, nations like America opposed this through international fair assemble suits .Thus many developing nations like South Africa were left in a difficult situation (Slick Blog , 2009). Hence, it is argued that TRIPS has supported in establishing the dominance of some big pharmaceutical companies and rising their presence general (Pouw, 2008). The pharmaceutical industry has affectionate out the solvent for this by outsourcing the production and research and development process as a part of the globalization process. These were intended to make them more cost effective in response to their rising costs. However studies have shown that these costs have been overestimated(Sampath,2005) .For example, the average cost of developing a pharmaceutical drug includes the costs of borrowing money to finance the RD process and the marketing costs of the product in addition to the costs of RD. This has overestimated the total RD costs.In addition to these, as a part of the globalization process, the big pharmaceutical companies are forced to perform many human trials with their new drugs before releasing them to the market. However, the main problem with this is th at most consumers are reported not to be willing to figure in this process. For example, the consumers were not willing to participate in the phase three trial of Macugen, the eye disease drug by Pfizer (Shah, 2006).It is argued that the reforms as a part of the globalization process has resulted in a national ruin by the developing nations through origin of markets and through the loans provided by IMF and World Bank attached with stringent conditions (Harvey, 2005).Globalization has also affected the marketing process in pharmaceutical industry through preventing the direct to consumer marketing in most countries and promoting advertisement through global media. This type of advertisement through global media is reported to have created warp images of health and diseases (Petryna and Kleinman, 2006).For example, the diseases like AIDS , are picturized as incurable by these advertisements which has resulted in the marginalization of many developing nations. Moreover, most of the advertisements have been related to allergic diseases rather than the real health crises. This has resulted in creating distorted images of many diseases and medicines.Overall, it is reported that the globalization process has increased the profits in pharmaceutical industry through reducing RD and production costs. This has necessitated the need for sustainable capital, which has resulted in the mergers of big pharmaceutical companies. Thus, the big pharmaceutical companies have started monopolizing the industry leaving the developing nations to be exploited for cheap labour and drug testing (Pouw, 2008,). The outsourcing process, which is supposed to offset the rising costs in the industry, is reported to have negative implications as discussed here. The public private partnerships, where the governments and big companies live together for resolving health crises, however are expected to represent many advantages for the developing nations (Bull and McNeill, 2007).4. Conclusion In this essay, the impact of globalization on two industries the fashion industry and pharmaceutical industry are discussed. In the case of fashion industry, the globalization impacts are through the combination of cultural, technological and economic dimensions. In the case of pharmaceutical industries, the impact is through a combination of cultural and economic dimensions. In the case of both the industries, globalization has resulted in decreasing the transportation and communication costs. Moreover, it enhances the availability of information through the world media. In the case of fashion industry, these have resulted in a shift from using the outsourced products by the middle class to more locally produced items based on the economies of scale principle. This has resulted in shifting labour from developing to developed nations .Though this is intended to make the production in a more cost effective manner, it is not obtained to be favourable in the present economic condition. The impact of globalization has affected the production, distribution and marketing sides of this industry. The increased availability of information had its impact through the cultural dimension of globalization in the case of fashion industry. The positive impacts of globalization in this industry include aspects like enhancing the speed of production, reducing time lag between production and delivery and creating an individualistic approach necessitating the need for self-improvement. At the same time, negative impacts include the shifting of labour from developed to developing nations.In the case of pharmaceutical industry, the focus is on the research and development of drugs in addition to its production. Hence, globalization affects this industry through three channels production, research and development as well as marketing unlike the fashion industry. The reduction in transportation and communication costs had its economic and technological impacts. Though this has helped in reducing the production and RD costs, this had created dominance for the big pharmaceutical corporations. The enhanced availability of information made the public more aware(predicate) of the adverse cause of drugs and hence made the decisions of doctors in some cases questionable .This can be considered as a positive aspect of globalization in the industry. At the same time, the enhanced communication through worldwide media has created distorted images in the minds of public regarding many diseases and the concept of health itself. second joint the globalization process has increased the profitability of the industry this has resulted in the monopoly of multinational giants in the industry. This has adversely affected the domestic pharmaceutical companies with only a very few exceptions.In the case of pharmaceutical industry, globalization process ahs resulted in creating prominent role for ordinal party players like the CROs unlike the fashion industry. Many big companies who were earlier profitable got adversely affected due to the rising production and RD costs. Outsourcing which was fond as a solution to this had many negative cultural and economic effects. However, compared to the fashion industry the effects of outsourcing were not so intense in the pharmaceutical industry, which can be understood from the discussion.In the case of fashion industry, Quotas and tariffs were eliminated on textiles as a part of the decision of WTO members. In the case of pharmaceutical industries, TRIPS agreement was aimed to service the developing nations by increasing the access to medication for developing nations. At the same time, TRIPS was obtained to leave the developing nations in difficult situation by marginalizing them in many cases. In the case of fashion industry, the globalization process has resulted in increasing competition and restructuring of the industry with a shift of labour from developing to developed nations. However, in the case of pharma ceutical industry, though globalization ahs resulted in enhanced competition, it has not resulted in the restructuring of the entire industry. Rather, it has created the emergence of the third party players, the CROs that made use of new business concepts and technological innovations.The preceding(prenominal) discussion thus shows that globalization process has affected both the fashion and pharmaceutical industries but through different intensities. The dimensions of globalization through which it affects both the industries are also little bit different. In the case of correspondent dimensions of globalization also, the intensities of impacts are different for both the industries depending on the nature and organise of both the industries. Globalization affects both the industries through different channels in spite of the similarities. Hence, it can be concluded that industry specific factors play important role in determining the intensity of the impact of globalization on each industry. The discussion above thus shows that industry specific studies are more relevant in examining the impact of globalization. Though globalization has both positive and negative impacts on industry performance, a generalise picture cannot be obtained in this regard. Macro studies may conceal many factors regarding the impact of globalization as is clear from the discussion above.