International Business

Environment & Strategy

Drivers of Globalisation
June 2010

Slides based on Yip, G. (1995):-

Johnson, Scholes & Whittington (2005)
“Exploring Corporate Strategy”, 7th edition

Robert Jones © 2010

What is globalisation?

Causes?

Effects?

Pros & cons?

 Global market
convergence

•  Similar customer needs

•  Global customers
•  Transferable marketing

•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
•  Competitors global
•  High exports / imports

Global
competition
Drivers of globalisation
Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
 Global market
convergence

•  Similar customer needs

•  Global customers
•  Transferable marketing

Global
strategies

Drivers of globalisation
Global market convergence

Similar customer needs

e.g. Personal computers
Mobile phones
i-Pod

Global customers
Europe
Americas
Asia
Africa

Transferable marketing
Global marketing
Local adaptation – especially with car models
 Global market
convergence

•  Similar customer needs

•  Global customers
•  Transferable marketing

Global Cost
strategies
advantages

Drivers of globalisation
Employees at a call centre in the southern
Indian city of Bangalore.
 Global market
convergence

•  Similar customer needs

•  Global customers
•  Transferable marketing

Global Cost
strategies
advantages

•  Interdependence
•  Competitors global
•  High exports / imports

Global
competition
Drivers of globalisation
Global competition

Interdependence
Global alliances – car industry
- airlines
- electronics

Competitors global
Top firms have #1 / #2 market shares in many nations
Global car makers

High exports / imports

Many electronic products are made in China
Shoes are made in Vietnam
“Home” markets are disappearing
Is my Toyota Corolla a Japanese car or………?
A global airline alliance:-
 Global market
convergence

•  Similar customer needs

•  Global customers
•  Transferable marketing

•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
•  Competitors global
•  High exports / imports

Global
competition
Drivers of globalisation
Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
Government influence

Trade policies
Falling barriers to trade
Liberalisation & deregulation
WTO / EU and trading bloc policies

Technical standards
ISO replaces national standards (BS, DIN, ASA)
Computer software is international
Safety & quality standards:-
Pharmaceutical, aviation, automobile sectors

Host government policies

Sensitivity is needed
National differences still exist
7th Session of the WTO Ministerial Conference
in Geneva 30 November to 2 December 2009
Argentina
Australia
Brazil
Canada
China
France
Germany
India
Indonesia
Italy
Japan
Mexico
Russia
Saudi Arabia
South Africa
Republic of Korea
Turkey
United Kingdom
United States of America
 Global market
convergence

•  Similar customer needs

•  Global customers
•  Transferable marketing

•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
•  Competitors global
•  High exports / imports

Global
competition
Drivers of globalisation
Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
How do these Drivers of Globalisation affect us?

Think of the 4 Cs:-

Competition is increasing

Costs must be reduced constantly

Customers are ever more demanding

Country differences are still important

The 4 Cs of globalisation
Global market
convergence

Customer
•  Similar customer needs
•  Global customers
•  Transferable marketing
Country
•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
Cost
•  Competitors global
•  High exports / imports

Competition
Global
competition

R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
Sources of Culture

Sources of Culture
Language/s
Nationality
Education
Profession
Ethnic group
Culture
Religion
Family
Sex
Social class
Corporate or organisational culture

Based on Usunier (2000) Marketing Across Cultures, Pearson Education Ltd

The 5 Cs of globalisation
Global market
convergence

Customer
Culture
•  Similar customer needs
•  Global customers
•  Transferable marketing
Country
•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
Cost
•  Competitors global
•  High exports / imports

Competition
Global
competition

R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
The 6 Cs of globalisation
Global market
convergence

Customer
Culture Converging technologies,
•  Similar customer needs
•  Global customers E-business
•  Transferable marketing

Country
•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
Cost
•  Competitors global
•  High exports / imports

Competition
Global
competition

R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
The 6 Cs of globalisation
Global market
convergence

Customer
Culture Converging technologies,
•  Similar customer needs
•  Global customers E-business
•  Transferable marketing

Country
•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
Cost
•  Competitors global
•  High exports / imports

Competition
Global
competition

R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
http://www.bankofengland.co.uk/monetarypolicy/assetpurchases.htm
More Cs of globalisation
Global market
convergence

Customer
Culture Converging technologies,
•  Similar customer needs
•  Global customers E-business
•  Transferable marketing

Country
•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
Cost
•  Competitors global
•  High exports / imports

Competition Credit
Global crunch Currency
competition

© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
More Cs of globalisation
Global market
convergence

Customer
Culture Converging technologies,
•  Similar customer needs
•  Global customers E-business
•  Transferable marketing

Country
•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
Cost
•  Competitors global
•  High exports / imports

Collaboration
Competition Credit
Global crunch Currency
Common
competition
platform
© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
http://unfccc.int/essential_background/feeling_the_heat/items/3157.php
More Cs of globalisation Climate
change CO2
Global market
convergence

Customer
Culture Converging technologies,
•  Similar customer needs
•  Global customers E-business
•  Transferable marketing

Country
•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
Cost
•  Competitors global
•  High exports / imports

Collaboration
Competition Credit
Global crunch Currency
Common
competition
platform
© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
More Cs of globalisation Copenhagen Climate
change CO2
Global market
convergence

Customer
Culture Converging technologies,
•  Similar customer needs
•  Global customers E-business
•  Transferable marketing

Country
•  Trade policies
Government •  Technical standards Global Cost
•  Host government strategies
influence policies
advantages

•  Interdependence
Cost
•  Competitors global
•  High exports / imports

Collaboration
Competition Credit
Global crunch Currency
Common
competition
platform
© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2