Globalization: An Entrepreneur’s perspective

The story of the Mahabaleshwar Strawberry

Strawberries are delicious little red fruits that most people wouldn’t mind eating. But did you know who supplies the strawberries, packed in little boxes, to your local supermarket? In India, 85% of all strawberries come from a region in Maharashtra called Mahabaleshwar. From there it is sent to the markets, chocolate factories and many other places all throughout India. In fact, a lot of them are even exported to countries like Belgium and France, among others. 

Yet, the fascinating part is that strawberries never even existed in India until the British brought them here all the way from Australia. And, here is yet another interesting fact: Farmers in Mahabaleshwar import some of the mother saplings all the way from California. Stories like these and many others are made possible because of a phenomenon called globalization.

A Connected World

A phone designed by an American company but manufactured in China goes on sale in the UK, clothes made out of Indian cotton are sold in the Middle East by a French company, military equipment made by Russia is sold to India, and microprocessors made in Taiwan power millions of devices used throughout the world. Today, globalization is considered to be one of the driving forces of the world’s economies. 

This phenomenon can have a lot to offer to a budding entrepreneur, not only from a business perspective but also from a learning perspective. Many resources are available today due to cultures and technologies colliding as a result of globalization. You have, at the palm of your hands, tools and information crafted by various people from around the world. It is one of the very reasons entrepreneurship ecosystems grew in developing countries. Because people in the world were communicating and trading with each other, opening up to one another. Globalization allowed entrepreneurs in developing countries access to money, opportunities, tools and a lot more to start working on their ideas and dreams. 

Globalised Supply chains

Picture yourself as a budding entrepreneur. You run a small startup with a team of around 5-10 members, all mostly your friends. However, you have much bigger dreams. A world built through globalization, then, means so much to you. Let us assume the raw materials required for your model have to be imported to India. This seems like an expensive process. Yet, through the years, supply chains and networks throughout the world have become highly efficient. Today shipping cargo is much cheaper than what it would’ve cost you in the 1930s. This is because the supply chain planning, sourcing and management have developed rapidly due to globalization. You can even probably choose where you want to import your raw materials from. Maybe it’s from China, maybe it’s from Vietnam. In the case of our strawberry story, the Mahabaleshwar farmers would’ve found it difficult to import the mother saplings from California if the efficient supply chains developed through globalization did not exist. 

A Competitive New World

Your startup seems to do well, and your entire team is happy. However, the next day you hear about a rival startup that developed a product that directly competed with yours. Now, because of your competitor, you have to work harder, smarter, and be much more efficient. 

Competition is never a nice word to swallow when you’re in the race, but from the customer’s and economy’s perspective, it is good. Competition means cheaper and newer products for the customer, a greater probability for innovation and fewer chances of the formation of a monopoly, i.e. one company or organisation controlling everything. Globalization has made the world a more competitive space. Even if your rivals aren’t even in your country yet, you feel the pressure to work harder and do more. However, the darker side of competition on the world stage is that startups can have a hard time fighting big corporations that eventually enter the free market, because of their resources and vastness. Yet, this also means if your startup is successful, you can expand your business to other regions and countries. Such decisions are at high risk, but high-risk decisions can have high returns.

Challenges

Let us assume your startup makes an app, say a game and releases it through Google’s play store. It is now available in various regions or even countries. However, after a few days, it is taken down. Confused, you enquire as to what happened. Turns out, some depictions and art in your game hurt the sentiments of certain groups in said region. When you are fighting against competition and releasing products on the world stage, you have to take into account the cultures, norms, and the political institutions present in your target country. 

A perfectly fine product might very well fail if it goes against cultural norms in said country. If you were to sell premium toilet paper in the US, you have a very large market. Yet in India, your product would fail. There is nothing wrong with your product, just that the norms in India are completely different than that of the US. So with globalization also comes the additional challenge of understanding and knowing your target very well, something that has historically proved to be very tricky.

Innumerable Possibilities

In the end, globalization for an entrepreneur can prove to be a double-edged sword, that can make or break you. Challenges like competition, understanding the culture and norms can all prove to be tricky to figure out. Yet, undoubtedly, globalization has brought forth innumerable tools and spaces to create and share ideas that can change and disrupt entire industries. So, the question now is, how will you use the fruits of globalization? 

Author – Shashank Krishna