Industry Globalization What is a global industry Why

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

Globalization Drivers Market Drivers n Cost Drivers n Government Drivers n Competitive Drivers n Low Multi-domestic High Global

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

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

Cost Globalization Drivers Global scale economies n Sourcing efficiencies n Factor of production differences n High product development costs n Rapidly changing technology n n Measures: u % 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 n Compatible technical standards n Common marketing regulations n n Measures: u % 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 Low Multidomestic Internet Commerce? Genetically engineered foods? High Global

Competitive Globalization Drivers High two-way trade / cross-border FDI n Global competitors n Interdependence among countries n u Policy Link u Trade/Investment Link u Management Link n Measures: u % of WW market attributed to imports/exports u % 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 Duplicate Activities Activity Location Follow Global Driver Tailored Marketing Standardize Independent/ market-bymarket Competitive Moves Interrelated/ Coordinated Global Pursuit of Global Share

Beer Industry and Globalization Multidomestic Driver Market Cost Government Competitive Global

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

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