Globalization of Industry

Innovation and adaptation are words commonly echoed through the manufacturing industry. To outlive inside a demanding fast-paced economy, companies must alter their current business practices and accommodate the requirements of a growing market.

Constantly challenged by aggressive global competition along with a “need it now” economy, leveraging technology such as video and web conferencing, provides manufacturing companies having a way to not only survive, but to thrive. These power tools equip businesses having a solution to drastically reduce operating costs by giving them choices to maintain sustainability and additional expand business into a global market. Video and web conferencing can be used to:

Conduct training sessions with distributors – There is no need for training teams to spend time and money travelling around various parts around the globe to see distributors on production line status updates and changes. Training staff can stay in-house and employ video and web conferencing to conduct one large training session with all distribution locations simultaneously.

Collaborate remotely with suppliers and vendors – Instantly connect manufacturing locations with suppliers and vendors. By keeping the data moving together, there is less possibility of supplies drained, ultimately lowering the product’s time to market.

Oversee product production and life cycles – Management teams and executives may use video conferencing to sign up in product inspections, remotely track product progress and ensure things are running efficiently without having to physically be there.

Educate, train increase staff – When employees are spread around different locations, it is tough to keep everyone on a single page. Holding regular online meetings, whether to release updates, train new personnel or for general education unites personnel and builds employee moral.

Connect inaccessible teams for brainstorming sessions – Development teams in La can connect to teams in London to go over product design progress, development problems and work together on new ideas.

Reach out to experts for advice – When a problem arises in development or production, video and web conferencing provides flexibility to immediately maximize expert resources without awaiting them to arrived at a particular location.

Find and screen offshore partners – Hold video interviews with potential partners who may be located over seas. Get a better sense for his or her business environment in addition to provide use of virtual equipment demonstrations and plant tours.

Gain new customers and retain old ones – Being readily available to a customer builds up a businesses brand. When customers need assistance or must have items repaired, technical staff members can immediately conduct a visible diagnosis in addition to offer remote instructional support.

In recent years, many American companies have opened multiple offices far away in addition to their home-based offices in the usa. This growing global network makes it increasingly necessary for all of the countries to adopt one standard and consistent way of reporting financial records of companies. We already have over one hundred countries throughout the world which are following one standard group of rules, called International Financial Reporting Standards, or IFRS for short. The United States continues to be following its very own set of rules for over 75 years; these rules are called the Generally Accepted Accounting Principles or GAAP. The different sets of accounting standards makes it difficult to compare and analyze as a famous company with a foreign company within the same industry.

It is important for the Usa to convert towards the accounting standards the rest of the world has adopted, to ensure that all countries’ fiscal reports can be in line with one another. The Registration, SEC, has officially announced the Usa will in fact eventually abandon the concept of using the Generally Accepted Accounting Principles and move toward while using IFRS standards, like so many countries before them have done. This mandate for conversion to IFRS is not finalized regarding a deadline date, but colleges and businesses are already planning their implementation strategies.

Globalization from the corporate world has helped to identify the requirement for only one accounting standard, IFRS, and this change will have a huge impact on Accounting education in the United States over the next decade or two. It will likewise have a direct effect on current students majoring in Accounting, in addition to existing accountants who are currently working in businesses today. It’s a large debate nowadays about how precisely the United States will teach the new material to students and current accountants. Teachers are having a hard time deciding how to blend the IFRS teachings to their courses. There has been a few options proposed regarding how to teach the fabric.

Among the options discussed would be to add more courses, with new textbooks, towards the Accounting curriculum in universites and colleges. The extra courses would focus on detailing the differences between the IFRS standards, when compared to GAAP standards; this is necessary to be able to teach the Accounting students the brand new material. This method might be unattractive, since it would require students to take additional classes and spend an extended in time school prior to them getting their Accounting degree. A longer amount of time in school would result in additional costs. For all those individuals who have already graduated with Bachelor’s degrees in Accounting, and therefore are already employed in the Accounting field, they will also need to be educated around the new principles. These existing accountants will need to take additional seminars or classes in order to learn the new material. These seminars ought to be made available through the companies these individuals work with, since the company includes a responsibility to make sure that their employees have the training essential to perform their jobs. The companies also have to adhere to the SEC mandate. If individuals act as a free-lance accountant for any temporary accounting agency, or work independently as Cpas (CPA), then they would need to take their own initiative and find IFRS training classes on their own.

The 2nd possibility that’s been discussed concerning how to teach the brand new IFRS material in college classrooms is to gradually start incorporating the material into current courses. This approach could be convenient because unlike the final option, there’d be no additional classes put into the college curriculum. Teachers could give examples in classes and show the scholars the various ways the issues would be solved in line with the two different principles, GAAP and IFRS. If teachers gradually introduce the new material to current students, they’ll a minimum of have an idea of what the differences are between your international and also the national standards. To be able to begin this process a couple of changes could be necessary first. The textbooks and learning materials would need to be updated for that students before transformation could even begin. Professors would also need to be extensively trained to enable them to effectively teach Accounting students these new accounting principles. They would most likely have to attend a number of seminars to learn the fabric themselves and then, substantially change their lesson plans for his or her students.

There’s a handful of options for handling and introducing the brand new IFRS switch to current and soon-to-be accountants. Whichever method in which america decides to handle the situation, they should start implementing the process sooner, instead of later. Joining other countries and changing towards the international standards is inevitable at this point, and it’ll most likely happen inside the decade. Beginning to prepare students for that results of globalization is vital, otherwise once the transformation happens you will see a lot of accountants improperly trained and able to performing their accounting jobs. If people are improperly trained when U.S. companies begin their conversion and implementation to IFRS accounting they may lose their jobs. The jobs might even be outsourced to countries where the accountants are experienced and know how to perform accounting functions using the IFRS principles.

The brightness of the glittering Twin Towers of Malaysia, the main one time tallest buildings of the world is telling many success stories of Malaysia and how it has been transformed into among the Asia’s wealthiest nations.

The serene great thing about the sky-high towers having a celestial background of shining stars inside a clear dark night within the far distance, propelled my thoughts into the traditional Malaysia where, while Dr. Mahathir Mohamad was criticising the western capitalism, how cleverly he applied outdoors economic strategies which made Malaysia to trade all over the world and it is entrepreneurs to become international players.

Dr. Mahathir’s open economic strategy having a clear vision and a mission triggered my memories back to my effort “Strategic Post-Conflict Economic Development Initiative” as an awareness program to change into Sri Lanka’s war-ravaged economy into among the South Asia’s best. Dr. Mahathir’s strategies are very well reflected in his macro – economic strategies adopting the open economic policies using the realization in mind that the world trend of Globalization and Liberalization is irreversible. We’re residing in a period of Globalization & Liberalization, a deeply imbedded neo-classical economic thought and its applications everywhere in the globe.

This overwhelming tide of G&L is reinforced and accelerated through the wide spread of Boeing and Airbus jets, It and also the better and efficient shipping facilities which made the whole world into much smaller and less distant than ever.

The present Pm of Singapore Lee Hsien Loong once said long ago within the late nineties when he was the deputy Prime Minister, “It is better to embrace globalization and liberalization proactively, at our very own pace, than face the prospect of eventually being swept away through the floodwaters of competition.”

His realization of embracing the globalization and liberalization might have been inherited into him by the tricks of former Prime Minister of Singapore Lee Kuan Yew who in the long tenure, changed Singapore from a sleepy colonial outpost to a prosperous high-tech enclave and applied better open economic policies to make use of the Globalization and Liberalization in Singapore’s favour.

Now Singapore’s per capita GNP is greater than those of its erstwhile colonizer, Great Britain. It has the world’s busiest port and it is the third-largest oil refiner and a major center for global manufacturing and service industries. And this move from poverty to plenty has taken place within one generation. In 1965 Singapore ranked economically with Chile, Argentina and Mexico however nowadays its per capita GNP is four or five times of theirs.

Foreign chocolate brands such as Dove, Cadbury and Hershey’s have now captured about 70% of the Chinese chocolate market. As Barry Callebaut, the earth’s largest chocolate manufacturer with 25% of the global market, recently opened its first chocolate factory in China in Suzhou City, the top 20 chocolate companies in the world have now all entered the Chinese market. But in the face area of worldwide competition, China’s local chocolate companies have been further suppressed on the value chain.

Second largest chocolate market

Because the CHF 4 billion-revenue-per-year Barry Callebaut setup its first production line in Suzhou, an entire multinational chocolate industry chain can also be emerging. Industry insiders suggested this would be a blow to local Chinese chocolate companies within this globalized competition. It further indicated that keeping up with international levels of competition are particularly important, or even the Chinese industry chain will become much more vulnerable.

Recently, the global chocolate market has notably slowed down, with only 2-3% growth per year. This is mainly because per capita chocolate consumption in developed countries is already at a high level, averaging 11 kg. On the other hand, China’s per capita chocolate consumption is just 0.1 kg, and it is domestic chocolate market has been growing at a staggering 10-15% per year, by having an estimated market potential of US$2.7 billion. Thus China is just about the world’s second biggest chocolate market only behind the US. The world’s top 20 chocolate companies have all entered China, and there are more than 70 imported or JV chocolate brands in today’s Chinese market.

Barry Callebaut makes it clear that they’re visiting share and participate in China’s economic growth. It intends to build the Suzhou factory into the largest among its 38 factories globally, and get a 6-fold sales increase in the next 5 years via the Suzhou factory’s high capacity. “We hope we can fully utilise this factory’s ability to rapidly increase output from 25,000 tons to 75,000 tons, which makes it the earth’s largest chocolate factory,” said Barry Callebaut CEO Patrick De Maeseneire.

Multinational ambitions

It’s understood that Barry Callebaut’s new plant in Suzhou will become the business’s Asia-Pacific headquarter, in addition to a sales network centre for serving China and multinational food manufacturers and specialised customers. Famous labels, such as Cadbury, Hershey’s and Nestle, all currently have large quantity of outsourcing manufacturing contracts with Barry Callebaut, whose OEM creation of cocoa liquor and chocolate products comes down to 15-20% of each of the three major brands’ annual output. So the Swiss Barry Callebaut is definitely the large Brother of the global chocolate industry.

In fact, before the arrival of Barry Callebaut, China’s local chocolate companies had already been losing market shares to multinational competitors. The US Hershey’s has going to plough the Chinese market, planning to achieve 23% share from the local market by 2010 and also the runner-up position in China. Meanwhile, Korean and Japanese chocolate producers will also be accelerating their entry in to the Chinese market.

Local companies not in the local market

Even though rapidly growing Chinese chocolate market is good news for its local chocolate companies, Chinese consumers today are often referring to foreign brands for example Dove, Cadbury, Hershey’s and Ferrero but seldom mentioning local brands.

Like a foreign product, China has only a chocolate manufacturing good reputation for under Half a century, so there is inevitable gap behind foreign brands in terms of production techniques and technologies. Because of inappropriate processing equipment and incomplete production facilities, product quality assurance is difficult for many local chocolate companies. Furthermore, most Chinese chocolate companies are weak in product R&D, leading to slow product changes and updates. At present, most local chocolate companies are stuck in an embarrassing situation of low product quality.

The above industry issues have costed local companies’ opportunities to participate in the competition for the Chinese chocolate market. Multinational chocolate brands have started to the Chinese market one by one because the 1990s, and now they’re in a dominant market position. Using their considerable financial power, multinationals can enjoy their technological and cultural cards, in addition to promoting their premium quality and different tastes, to rapidly capture the Chinese market.

As Barry Callebaut finally entered china market, its Suzhou factory can make chocolate production even cheaper for multinational brands. For local Chinese firms that are mainly within the low-end market, they might no more hold the forex market segment firm.

Take care of the globalization

Statistics demonstrated that there are approximately 63 large-scale local chocolate companies in China, with annual production of 150,000 tons. Statistics from industry associations also revealed that China currently has about 250 chocolate companies in total.

Industry insiders noticed that the Chinese food and beverage market is a very and internationally competitive market. The vast potential of China’s chocolate marketplace is not just for foreign brands, but can also be laid before local chocolate producers. The neighborhood chocolate industry is now inside a structural change and survival-of-the-fittest stage, with no doubt the entry of foreign brands will present challenges to the local industry. But when local chocolate companies can participate in this international competition, it couldn’t only drive the chocolate demand from Chinese consumers, but also promote development of China’s chocolate market.