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Global Finance new & quite confusing to me. I have to write an 1100 word essay in which I analyze the drivers and consequences of globalization.

Be sure to address the following:

a. Analyze at least three drivers of globalization and how these drivers impact the giant retailer Wal-Mart financially.

b. Describe the risks associated with global investing.

c. Explain the importance of cultural sensitivity and ethics in global finance.

Please include an introduction, conclusion, and cite all sources.

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Solution Summary

Analyze at least three drivers of globalization and how these drivers impact the giant retailer Wal-Mart financially.

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Introduction:

In today's extremely competitive and dynamic business world, globalization has become an inherent element of the business environment. Each and every company, be it small or large, is affected by globalization in one way or the other. Globalization has become an indispensable element of large corporation's corporate strategy. The increasing influence of drives of globalization such as outsourcing, technology and internet and other drivers have made it imperative for companies to think each strategic move from global perspective.

With the increasing volume of transactions across national borders, global finance has emerged as a major element of the overall financial management in an organization. Global finance presents new opportunities and challenges, but is full of risks as well. Let us see the various dynamics and characteristics of global finance.

a. Analyze at least three drivers of globalization and how these drivers impact the giant retailer Wal-Mart financially.

One of the major drivers of globalization is the increasing quest of global companies to obtain comparative advantage in terms of cost production. Companies are increasingly looking to set up global manufacturing or sourcing operations in low cost nations across the world to tap advantage in terms of cost, quality of products, etc. Walmart also sources from all over the world to save costs and obtain competitive advantage against other low cost retailers. Such offshore sourcing operations allow Walmart to maintain its low cost leadership strategy and allows it to offset the impact of rising prices and thus, maintain operating margins in today's recessionary and extremely competitive retail industry environment.

Another major driver of globalizaton is the quest of companies to exploit market opportunities ...

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