Industry Globalization

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					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?


Globalization Drivers
Market Drivers  Cost Drivers  Government Drivers  Competitive Drivers


Low
Multi-domestic

High
Global

Market Globalization Drivers
Common customer needs  Global customers  Global market channels  Transferable marketing
 

Measures:
%

of WW sales attributed to standardized products

Strength of Market Drivers
Aircraft Computers Automobiles Soft Drinks Toothpaste Retail Banking Book Publishing Baked Goods

Beer?
High
Global

Low
Multidomestic

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

Strength of Cost Drivers
Pharmaceuticals

Aircraft Computers Automobiles
Toothpaste Retail Banking

Baked Goods Soft Drinks

Low
Multidomestic

High
Global

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

Strength of Government Drivers
Toothpaste Baked Goods Soft Drinks Computers Automobiles Pharmaceuticals Airlines

Retail Banking

Internet Commerce? Genetically engineered foods?

Low
Multidomestic

High
Global

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

Strength of Competitive Drivers
Aircraft Pharmaceuticals Computers Toothpaste
Automobiles

Soft Drinks
Retail Banking

Baked Goods

Low
Multidomestic

High
Global

Industry Globalization and Strategy
Multidomestic Based on Interest Lever Market Participation Global Pursuit of Global Share

Duplicate Activities Tailored Independent/ market-bymarket

Activity Location Marketing Competitive Moves

Follow Global Driver Standardize Interrelated/ Coordinated

Beer Industry and Globalization
Multidomestic Driver Global

Market Cost Government Competitive

Mobile Phone Industry and Globalization
Multidomestic Driver Global

Market Cost Government Competitive

Managed Healthcare Industry and Globalization
Multidomestic Driver Global

Market Cost Government Competitive