The global economy and marketplace have impacted local industry and local manufacturing harshly. With consumers having choices from international companies able to import their products, a common market pool for the whole world, it has become more difficult for the local merchants to thrive. Also, many Western companies have established themselves in developing countries, such as McDonalds and Starbucks, with over 31,000 and 18,000 locations operating worldwide respectively. While the influx of multi national corporations has created economic opportunities for many in the communities that they operate within. However, with this prosperity has come the evaporation of local industries. .
One enormous problem could be the price of doing business and the amount of capital it takes to operate in these markets. These international companies have vast reserves of capital to fund their operations in various countries, even buying up local enterprises to reduce their competition. These corporations also spend an enormous amount of cash on advertising. Thus they are able to extend their brand recognition into their new destinations. This is the formula that has also worked well in American cities. Companies are able to buy out their competition with less expensive production costs or less overhead. These companies can operate on a smaller margin than the local merchants, who do not have the benefit of mass produced overseas inventory. (Kantor, 2002).
On a political scale, globalization has had an effect on the policies put into place by local entities that have an impact on the local manufacturing and food market. Through the increased surge in international competition, national policies that are aimed at preserving the structure of local communities and upholding social equality have dwindled and been phased out. Looking to nurture economic growth, many local governments invite foreign investments (Held & McGrew, 2012).
