Compatibility Issues of Domestic Goods and Services in Global Markets

Compatibility Issues of Domestic Goods & Services in Global Markets: Research Proposal & Data Analysis of Dow Jones & S&P500 Assignment

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Part 1: Research Proposal

Research topic

Globalization has provided many benefits to organizations right from the beginning of the expanded customer base, generation of more revenue streams, and diversified work culture. This has eventually led to an increase in the overall competition which is related to the product, service cost, price, technological adaptation, target market, quick response, and quick production. Moreover, there are both short-term and long-term trends and fluctuations such as government rules, speculation and expectation, international transactions, and “supply and demand”.

Significance of the topic

The impact of globalization has created many host challenges (persistent and economic imbalances) caused by the downward pressure laid on the wage shares, destabilization in the capital flows, and increasing market concentration (Simo, 2020). Apart from that, globalization presents heavy challenges for multinational corporations in relevance to capital investment and leadership. The drastic growth in the digital economy has pressurized many hostile countries to focus on their tax regimes, which are equipped for efficiently dealing with the newly growing phenomenon (Statista.com, 2023).

Figure 1: Changes in the global trade volumes from 2018-2022

(Source: Statista.com, 2023)

Problem statement

There are many companies that have become disillusioned with the sales vision, especially in the international market. Trades issues remain occasionally dominate the international market whether it is a domestic market or the international market. In addition to that the complexities such as the trade barriers increase the expense of trading and selling costs. For example, the application of tariffs to the products and services the domestic buyers are required to pay more (oecd.org, 2023). On the other hand, the import of raw materials capital goods, and the cost of production becomes highly expensive.

Aim of the research

The aim of the research proposal is to examine the compatibility issues of domestic goods and services in global markets

Objectives

• To evaluate the various issues found at the time of globalization
• To evaluate the impact of the compatibility issues of domestic products and services
• To identify the problems in the compatibility of domestic products in the international market

Literature Review

Evaluation of the various issues found at the time of globalization

Globalization alters the way in which businesses, people, and nations interact with each other for better evolution and growth. Based on the research work of Simo (2020), globalization offers extensive opportunities to true economic development but it is not progressing evenly. Globalization offers plenty of benefits to the economy and drives maximum sales value to the colonies. However, the impact of globalization has necessarily evoked the competition that exists within the economies. There have much unequal growth in employment opportunities and increased global recessions that are found to be the causes of the increased globalization and intentional trade. As per the views of Pennesi (2021), the rate of disparity between the rural and urban areas is commonly found to increase rapidly with the effects of globalization. There are probably many negative impacts of globalization such as the e expansion of slum capitals, in addition to that the rate of terrorist attacks has equally seen to be increasing rapidly in developing and underdeveloped countries. As opined by Osburg et al. (2021), the widening gap in the income of the household has retained the poor to the poorest and the rich to the richest with the spread of globalization. The local business is affected due to the establishment of the international business set-up having proper access to adequate resources and materials. In addition to that the government support provided to them, aids in their supply chain effectiveness and establishing their successful ventures internationally. Thus small and medium enterprises are severely affected due to the process.

Figure 2: Issues of globalization on industries

(Source: Sousa et al. 2020)

Evaluation of the impact of the compatibility issues of domestic products and services

The impact of inadequate compatibility tends to create many issues and affects the performance of the business organization severely. Based on the research work of Sousa et al. (2020), the higher differences between the customer's demands and satisfaction tend to create a lower customer basis for the market and decrease the sales and revenue of the company. It affects the core existence of the domestic market with the establishment of internal and foreign products ad services. Moreover, international trade business provides exposure to higher business expansion and expands their markets to a wider level. As per the reference of Bauwens (2021), this naturally affects the local and domestic markets and sellers to create their influence on the customers due to the unavailability of the appropriate resources and tools required. Based on the views of Sousa et al. (2020), additionally, these establishments are supported by political and governmental institutions that tend to increase and intensify the competitive markets between domestic and international sellers and markets. The increase in competitiveness equally affects the pricing strategies of the sellers to supply their commodity to their customers at a relatively cheaper price. On the contrary, as per the reference of Gruszczynski (2020), this factor somewhere or the other tends to highly affect the revenue growth of the company, increasing the wages simultaneously. The increase in globalization equally affects the preferences and selection of a variety of goods and commodities of customers (oecd.org, 2023). The research previously conducted states that there have been probable differences in the quality of products that are available in the international and domestic markets due to the impact of globalization. There has been a negative impact on the quality and operational efficiency of the firms due to the significant differences between domestic and international products and services.

Identification of the problems in the compatibility of domestic products in the international market

The increase in international trade tends to create a reduction in real wages in a few sectors and areas. This all together affects the income available to many households and creates an inequality in their income balances leading to major losses for a segment of the population. As per the reference of Böhringer et al. (2021), On the other hand, cheaper exports can possibly reduce domestic consumer prices and the magnitude of their impact can have a long-term impact on the profitability and feasibility of many organizations. The compatibility in technological dependency and innovation has a high influence on the way domestic and international market operates across the world. Based on the research work of Tien and Ngoc (2019), the lack of leadership of the domestic market and economic welfare are equally affected by the increased exposure to international trade and globalization.

There are many risks that are carried forwards with domestic transactions such as differences in language, cultural barriers, trade differences, political differences, legislation differences, and many more. The changes in technological invention particularly after the pandemic period have exposed issues to many economies and affected the domestic market performance terribly lower than expected. The resources efficiency improvements and changes in the modes of tools and equipment that the business tends to use have higher differences in the profitability and feasibility of the performances of the companies. Moreover, the situations have rapidly changed even more after the pandemic period and the increased use of the technological devices and equipments.

Data types and collection types

The researcher will be using secondary sources of data collection techniques for the completion of the research study.

Selection of the data

The researcher will be using secondary sources of data for collecting vital information and data related to the research topic. The collection of the imperative data will allow the researcher in gaining an in-depth source and material required for the effective completion of the research study. Moreover, the secondary data are obtained by thorough research and analysis of websites, journals, online articles, authentic annual reports of the companies, and scholarly articles. The selection of the data will allow the researcher to gain adequate and validate the information that will increase the reliability of then users on the study. In addition to that the sources are highly effective to make the research study profound.

Sources of data

The researcher will be using secondary qualitative sources of data collection for the purpose of completing the research study. The researcher will use the sources of data in order to collect useful data that are imperative for the collection required for the completion of the research topic. The qualitative data includes the information provided on authentic and governmental websites for collecting necessary information and data.

Data collection techniques

The data collection methods allow the researcher to collect relevant and imperative data with the help of accurate tools and techniques available. The secondary methods are relevant to the research background and it will help in obtaining crucial information available easily and conveniently (Pandey and Pandey, 2021). The secondary method involves the numerical analysis of the research study and allows the researcher in attaining maximum information that helps in enhancing the quality of the research study.

Proposed methodology

Research design

Research design helps in strategizing the entire research study and deriving a profound conclusion with high effectiveness. The researcher will be using the explanatory research design methods for the completion of the study with core reliability and high efficiency. The explanatory design will allow the researcher to carefully assess all the required objectives of the research study and carry it out with high reliability and arrive at a solid conclusion at the end. Moreover, the design will allow the researcher to synchronize all the relevant and important data that are necessary important for the completion of the research topic will a high level of effectiveness and efficiency. Vivid and detailed information will be gained by the proposed method.

Proposed methodology

The secondary method will be used by the researcher for the completion of the research study along with the qualitative data that are collected from the journal that is available from the peer review authors. It will increase the reliability of the research study that is prepared on the basis of the research topic chosen (Sileyew, 2019). The topic requires in-depth examination and detailed information that is available in online journals, websites, magazines, and annual reports of the companies.

Reason for selecting the proposed methods and designs

The selection of the proposed methodology will allow the researcher to complete the research study with adequate information and resourceful data. Apart from that it will allow the researcher to provide its users with higher reliability and dependency on the research topic. The secondary qualitative method will help in identifying the researcher with the information and outcomes that have already been researched by the peer authors and researcher and available data are useful.

Part 2: Data analysis

• Scatter

The above graph reveals the scatter diagram market performance of the Dow jones company under the S&P 500. This reveals that there is a moderate relationship between the two variables.

• Correlation

• Discussion

The above figure describes the correlation between Dow Jones and S&P 500 in the market. It reflects that there is a moderate relationship between the two variables. The correlation value examined with the help of the statistical test has been evaluated to be near about 0.9172 approximately). Thus the change in one variable will tend to have a probable impact on the other variable and vice versa. The dependent variable is S&P 500 and the Dow jones tends to remain the independent variable.

• Relationship

The R-square value of the regression analysis has been obtained to be 0.841386911 and the Adj R square value is 0.821560275. Thus this has effectively stated the changes in the relationship of both the variables.

• Co-efficient

The coefficient of the determination is evaluated to be 0.148872554 as per the regression analysis. This indicates that there is a strong positive linear relationship between the two variables. The ideal range of the coefficient variable is 0.7-1.0 and thus a change in one dependent variable will bring significant change in the independent variable.

References

Bauwens, T., 2021. Are the circular economy and economic growth compatible? A case for post-growth circularity. Resources, Conservation and Recycling, 175.

Böhringer, C., Fischer, C., Rosendahl, K.E. and Rutherford, T.F., 2022. Potential impacts and challenges of border carbon adjustments. Nature Climate Change, 12(1), pp.22-29.

Gruszczynski, L., 2020. The COVID-19 pandemic and international trade: Temporary turbulence or paradigm shift?. European Journal of Risk Regulation, 11(2), pp.337-342.

oecd.org (2023) Challenges and Solutions for Globalization Available at: https://www.oecd.org/social/challenges-and-solutions-for-globalisation.htm [Accessed on 4th March 2023]

Osburg, V.S., Davies, I., Yoganathan, V. and McLeay, F., 2021. Perspectives, opportunities and tensions in ethical and sustainable luxury: Introduction to the thematic symposium. Journal of Business Ethics, 169, pp.201-210.

Pandey, P. and Pandey, M.M., 2021. Research methodology tools and techniques. Bridge Center.

Pennesi, F., 2021. Equivalence in the area of financial services: An effective instrument to protect EU financial stability in global capital markets?. Common Market Law Review, 58(1).

Sileyew, K.J., 2019. Research design and methodology (pp. 1-12). Rijeka: IntechOpen.

Simo, R.Y., 2020. Trade in services in the African Continental Free Trade Area: Prospects, challenges and WTO compatibility. Journal of International Economic Law, 23(1), pp.65-95.

Sousa, C.M., Li, R.Y. and He, X., 2020. The impact of exploitation and exploration on export sales growth: The moderating role of domestic and international collaborations. Journal of International Marketing, 28(4), pp.1-20.

statista.com (2023) Change in global goods trade volume from January 2018 to December 2022 Available at: https://www.statista.com/statistics/1032180/global-growth-goods-trade/ [Accessed on 4th March 2023]

Tien, N.H. and Ngoc, N.M., 2019. Coping With Challenges and Taking Opportunities in International Business Strategies of Foreign Enterprises in Vietnam.