3.9.3 - Globalisation and international opportunities

Global connections and competitive change

Globalisation is the increasing integration and interdependence of economies and business activity across national borders.

It involves flows of products, services, investment, information and resources. Internationalisation describes an individual business expanding its activities across borders. A business can internationalise through exporting or overseas operations, while globalisation describes the wider environment making cross-border activity more connected. Neither means that all markets have identical customers or unrestricted access.

Improvements in transport and logistics can make distant sourcing and selling more feasible. Digital communication allows businesses to coordinate sites, compare suppliers and communicate with customers across borders. Reductions in trade barriers can increase access, while investment and international supply networks can connect production stages in different countries. These developments are mechanisms, not a claim that every barrier continually falls: policy changes, conflict or disruption can make international activity harder.

Global connections create opportunities to sell beyond the home market, source specialised inputs, spread development costs and learn from different markets. A specialist pump manufacturer serving a small domestic market could reach more industrial customers abroad and use the additional sales to support product development. A wider supplier network may give access to a component unavailable locally.

The same connections increase competitive pressure. A domestic business may face foreign suppliers with lower costs or a better offer. Supply chains can become dependent on distant production, exchange rates or transport routes. Digital access makes some markets easier to reach but also easier for rivals to enter. International opportunity and vulnerability can therefore rise together.

The importance differs by business. A small local service may not export, yet buy imported equipment or compete with a global platform. A manufacturer may depend on cross-border components even when it sells domestically. Managers should identify which connections affect demand, cost and continuity, rather than assume that globalisation matters only to large multinationals.

On 9 April 2025 the LEGO Group opened its US$1 billion factory in Binh Duong, Vietnam, its second factory in Asia. This is a named example of cross-border investment linking a Danish business to production capacity in another economy. It can improve access to regional markets, but it also creates commitments involving skills, suppliers and local operating conditions. The investment amount alone does not prove that Vietnam is attractive for every product or business. LEGO Group, 2025.

Opportunities in emerging economies

Emerging economies can become important markets, production locations and sources of competition as their business activity and international connections develop.

The term generally refers to economies developing their productive capacity and participation in wider markets, often with industrialisation and changing patterns of demand. It is a broad category rather than a promise of uniformly rapid growth or a precise customer profile. Conditions differ between countries, regions and income groups, and can change over time.

Growing incomes, urbanisation or infrastructure investment can create demand for consumer products, financial or transport services and industrial equipment. A business may find opportunities where customer needs are not yet well served. Producers in these economies can also become suppliers, partners or competitors with their own skills and brands. Treating them only as cheap labour sources overlooks these different roles.

Illustrative case: a water-equipment supplier considers a market where manufacturing activity and urban construction are expanding. This may create demand for treatment and pumping systems. However, the business needs evidence about customers able to pay, reliable contracts and appropriate technical specifications. National output growth alone does not establish demand for its particular equipment.

Limitations may include uneven incomes, weak distribution, infrastructure constraints, unfamiliar buying practices or policy uncertainty. These should be investigated in the actual market rather than assumed to characterise every emerging economy. A region with strong industrial customers may be attractive despite a low national average income; a large population can be commercially inaccessible if the target cannot afford the product or distribution is impractical.

Early entry may help develop relationships before rivals, but unfamiliar conditions increase learning costs. Local research and partners can improve understanding, while staged commitment can reduce exposure. Managers should compare the opportunity with competitors, resources and uncertainty instead of selecting a market solely because it carries an attractive category label.