Globalization According to the Levin Institute, the term globalization refers to the increasing connections people, companies and states are forming around the world. The process of forming social and economic ties across vast distances is nothing new historically; however, technological improvements and liberal trade agreements have increased these connections greatly in contemporary times. Market Drivers One of the primary drivers of globalization has been in respect to market forces, whereby many consumer goods and services are now universally available, no matter one’s geographic location or social setting. As a result of international marketing campaigns and corporate brand promotions, consumer desires and lifestyles around the world are increasingly converging.
Wow, two brain-tickling hours of input from some brilliant speakers. My colleague Alison Bass will soon fill you in on Paul Saffo’s and Martin Wolf’s talks, but let me just clear up one mistake I made in my last post. Wolf’s talk was not the sanguine-sounding 'Why Globalization Can Work,' but rather 'How Globalization Works,' a much more astringent dose of reality! What a difference a few words can make. With loads of charts and graphs, Wolf talked about the five drivers of globalization, and the five threats to globalization, the latter all coming under the umbrella of 'the human capacity to screw up,' which in his fine British delivery he called 'nigh on infinite.' Saffo talked about the art of forecasting, exhorting listeners to not just absorb passively what professional forecasters put forth, but to start doing their own forecasting. One bit of advice that was funny and true and backed up by historical example: 'Most ideas take 20 years to become an overnight success.'
So, if you want to know what the next big wave might be, look for something that’s been stuggling to gain foothold for a couple of decades. Be sure to adopt the - and beware the. Get the latest on digital transformation. Stay tuned for more detail from the sessions and wisdom gleaned from hallway conversations. And, stay tuned in the coming weeks as we think we’ll be able to offer podcasts of the talks by Saffo and Wolf.Sandy Kendall.
Globalization drivers determine the potential of global business in the industry. These drivers are uncontrollable and each has a level of globalization potential. Here are the four external drivers which affect the potential of globalization: a. Market drivers This refers to the degree of homogeneity of customer needs. It also speaks about the existence global distribution networks and transferable marketing. Cost drivers It determines the potential for economies of scale. Determining factors of this driver are transportation cost, product development costs and economies of scope c.
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Government drivers The government drivers include the following factors: favour trade policies, example of this is market liberalization. It also include compatible technical standards and common marketing regulations, and privatization d. Competitive drivers The globalization is also affected by the competition. There are various forms of competitive drivers. If there is a strong competition in the industry, the greater is the possibility of the industry to globalize.
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You may also download a PDF copy of (1019 KB) or (100 KB), suitable for printing or most e-readers, or containing this book's HTML files (for use in a web browser offline). 2.4 Industry Globalization Drivers Yip identifies four sets of “industry globalization drivers” that underlie conditions in each industry that create the potential for that industry to become more global and, as a consequence, for the potential viability of a global approach to strategy. Yip first developed this framework in his book Total global strategy: Managing for worldwide competitive advantage (1992), chaps. How customer behavior distribution patterns evolve. Define how customer behavior distribution patterns evolve, including the degree to which customer needs converge around the world, customers procure on a global basis, worldwide channels of distribution develop, marketing platforms are transferable, and “lead” countries in which most innovation takes place can be identified. Scale or scope economics, experience effects, sourcing efficiencies, and technology advantages that shape the economics of an industry.—the opportunity for global scale or scope economics, experience effects, sourcing efficiencies reflecting differentials in costs between countries or regions, and technology advantages—shape the economics of the industry. Defined by the strategic actions of globally competing firms in deciding in which markets to compete.
Are defined by the actions of competing firms, such as the extent to which competitors from different continents enter the fray, globalize their strategies and corporate capabilities, and create interdependence between geographical markets. Include such factors as favorable trade policies, a benign regulatory climate, and common product and technology standards. Include such factors as favorable trade policies, a benign regulatory climate, and common product and technology standards. Market Drivers One aspect of globalization is the steady convergence of customer needs. As customers in different parts of the world increasingly demand similar products and services, opportunities for scale arise through the marketing of more or less standardized offerings. How common needs, tastes, and preferences will vary greatly by product and depend on such factors as the importance of cultural variables, disposable incomes, and the degree of homogeneity of the conditions in which the product is consumed or used. This applies to consumer as well as industrial products and services.
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Coca-Cola offers similar but not identical products around the world. McDonald’s, while adapting to local tastes and preferences, has standardized many elements of its operations. Software, oil products, and accounting services increasingly look alike no matter where they are purchased.
The key to exploiting such opportunities for scale lies in understanding which elements of the product or service can be standardized without sacrificing responsiveness to local preferences and conditions. Manmadhan theme song mp3 download. Global customers have emerged as needs continue to converge. Large corporations such as DuPont, Boeing, or GE demand the same level of quality in the products and services they buy no matter where in the world they are procured. In many industries, global distribution channels are emerging to satisfy an increasingly global customer base, further causing a convergence of needs.
Finally, as consumption patterns become more homogeneous, global branding and marketing will become increasingly important to global success. Cost Globalization Drivers The globalization of customer needs and the opportunities for scale and standardization it brings will fundamentally alter the economics of many industries. Economies of scale and scope, experience effects, and exploiting differences in factor costs for product development, manufacturing, and sourcing in different parts of the world will assume a greater importance as determinants of global strategy. At bottom is a simple fact: a single market will no longer be large enough to support a competitive strategy on a global scale in many industries. Global scale and scope economics are already having far-reaching effects.
On the one hand, the more the new economies of scale and scope shape the strategies of incumbents in global industries, the harder it will be for new entrants to develop an effective competitive threat. Thus, barriers to entry in such industries will get higher. At the same time, the rivalry within such industries is likely to increase, reflecting the broadening scope of competition among interdependent national and regional markets and the fact that true differentiation in such a competitive environment may be harder to achieve. Competitive Drivers Industry characteristics—such as the degree to which total industry sales are made up by export or import volume, the diversity of competitors in terms of their national origin, the extent to which major players have globalized their operations and created an interdependence between their competitive strategies in different parts of the world—also affect the globalization potential of an industry. High levels of trade, competitive diversity, and interdependence increase the potential for industry globalization.
Industry evolution plays a role, too. As the underlying characteristics of the industry change, competitors will respond to enhance and preserve their competitive advantage. Sometimes, this causes industry globalization to accelerate. At other times, as in the case of the worldwide major appliance industry, the globalization process may be reversed.
Government Drivers Government globalization drivers—such as the presence or absence of favorable trade policies, technical standards, policies and regulations, and government operated or subsidized competitors or customers—affect all other elements of a global strategy and are therefore important in shaping the global competitive environment in an industry. In the past, multinationals almost exclusively relied on governments to negotiate the rules of global competition.
Examples Of Cost Drivers Accounting
Today, however, this is changing. As the politics and economics of global competition become more closely intertwined, multinational companies are beginning to pay greater attention to the so-called nonmarket dimensions of their global strategies aimed at shaping the global competitive environment to their advantage (see the following section). This broadening of the scope of global strategy reflects a subtle but real change in the balance of power between national governments and multinational corporations and is likely to have important consequences for how differences in policies and regulations affecting global competitiveness will be settled in the years to come.
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