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Industry Globalization

Industry Globalization . What is a global industry? Why? Which drivers/factors most important? How does a global industry compare with a multi-domestic one? How is the extent of globalization “measured”? What are the implications for firms’ international strategies?.

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Industry Globalization

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  1. Industry Globalization • What is a global industry? Why? • Which drivers/factors most important? • How does a global industry compare with a multi-domestic one? • How is the extent of globalization “measured”? • What are the implications for firms’ international strategies?

  2. Globalization Drivers • Market Drivers • Cost Drivers • Government Drivers • Competitive Drivers High Global Low Multi-domestic

  3. Market Globalization Drivers • Common customer needs • Global customers • Global market channels • Transferable marketing • Measures: • % of WW sales attributed to standardized products

  4. Strength of Market Drivers Aircraft Computers Automobiles Soft Drinks Toothpaste Retail Banking Beer? Book Publishing Baked Goods Low High Multidomestic Global

  5. Cost Globalization Drivers • Global scale economies • Sourcing efficiencies • Factor of production differences • High product development costs • Rapidly changing technology • Measures: • % of WW market needed to achieve MES

  6. Strength of Cost Drivers Pharmaceuticals Aircraft Computers Automobiles Toothpaste Retail Banking Baked Goods Soft Drinks Low High Multidomestic Global

  7. Government Globalization Drivers • Unrestrictive trade and investment policies • Compatible technical standards • Common marketing regulations • Measures: • % of countries that possess uniform or mutually- recognized technical standards

  8. Strength of Government Drivers Toothpaste Baked Goods Soft Drinks Computers Automobiles Pharmaceuticals Airlines Internet Commerce? Genetically engineered foods? Retail Banking Low High Multidomestic Global

  9. Competitive Globalization Drivers • High two-way trade / cross-border FDI • Global competitors • Interdependence among countries • Policy Link • Trade/Investment Link • Management Link • Measures: • % of WW market attributed to imports/exports • % of WW market attributed to top 4-8 firms

  10. Strength of Competitive Drivers Aircraft Pharmaceuticals Computers Toothpaste Automobiles Soft Drinks Retail Banking Baked Goods Low High Multidomestic Global

  11. Lever Market Participation Activity Location Marketing Competitive Moves Industry Globalization and Strategy Multidomestic Based on Interest Duplicate Activities Tailored Independent/ market-by-market Global Pursuit of Global Share Follow Global Driver Standardize Interrelated/ Coordinated

  12. Driver Market Cost Government Competitive Beer Industry and Globalization Multidomestic Global

  13. Driver Market Cost Government Competitive Mobile Phone Industry and Globalization Multidomestic Global

  14. Driver Market Cost Government Competitive Managed Healthcare Industry and Globalization Multidomestic Global

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