Altered Relationship
also brought with it changes to many types of relationships. This alters the competitive landscape significantly as competition and threat of entry increase.
International Competition
One of the more significant consequences of globalization is the emergence of international competition. Companies that used to compete within national boundaries are now competing on the international stage, significantly raising the stake of the feud. In some instances, competitions are between companies from the same countries. Such was the case with Toyota and Honda. In other cases, competitions are between companies from different countries. In the airline manufacturing industry, Airbus was heavily subsidized by the European governments to allow it a fighting chance against Boeing. With Boeing 747 being one of US's key export and Airbus attempting to challenge, national politics can become intertwined with international businesses and "what ought to be no more than a trade dispute could inflict widespread political, economic, and security damage to the North Atlantic Treaty Organization"(8).
Trade Imbalance
Globalization also brought with it trade imbalances among countries. For many developing countries, globalization results in a trade surplus as they take advantage of lower labor cost and produce more for export. Having a trade surplus is commonly thought of as producing more than the country needs. In the case of United States, globalization is also leading to a growing trade deficit. One view of US's trade deficit attributes it to "a decline in saving and prolonged upswing in business cycle" and proponents claim that capital inflow help industries that are sensitive to interest ...