There is a movement towards a globalization of markets, as the tastes andpreferences of consumers in different nations are beginning to converge uponsome global norm. The global acceptance of Coca-Cola, Levi’s jeans, SonyWalkmans, and McDonald’s hamburgers are all examples. By offering astandard product worldwide, they are helping to create a global market. Evensmaller companies can get the benefits from the globalization of markets.Despite the global prevalence of global brands such as Levis, City Bank, Pepsietc, national markets are not disappearing. There are still significant differences- Germany still leads in per capita beer consumption, with a local pub on almostevery corner and in some cities, women selling beer out of their front windowsto passers by on the street. The French lead in wine consumption, and theconsumption of wine is a natural part of life anywhere in France. Italians lead inpasta eaten, and these differences are unlikely to be eliminated any time soon.Hence, often there is still a need for marketing strategies and product featuresto be customized to local conditions.
Globalization of production
The globalization of production refers to the tendency among manyfirms to source goods and services from different locations around theglobe in an attempt to take advantage of national differences in thecost and quality of factors of production. (labor, energy, land andcapital)
Through this companies hope to lower their overall cost structure and orimprove the quality or functionality of their product, thereby allowing them tocompete more effectively against their rivals. The examples of Boeing and SwanOptical illustrate how production is dispersed.Boeing company’s commercial jet airliner, Boeing 777 contains 132,500 majorcomponents parts that are produced around the world by 545 differentsuppliers. Eight Japanese suppliers make parts of fuselage, doors and wings, asupplier in Singapore make the doors for the nose landing gear, three suppliersin Italy manufacture wing flaps etc. The result of having a global web of suppliers is a
better final product
, whichenhances the chances of Boeing wining a greater share of aircraft orders thanits global rival
.While part of the rationale is based on costs and finding the best suppliers inthe world, there are also other factors. In Boeing’s case, if it wishes to sellairliners to countries like China, these countries often demand that domestic
International Business Management VIMAL JOSHI2