Industry Globalization

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

Globalization Drivers
Market Drivers s Cost Drivers s Government Drivers s Competitive Drivers
s

Low
Multi-domestic

High
Global

Market Globalization Drivers

Common customer needs s Global customers s Global market channels s Transferable marketing
s s

Measures:
x % 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 s Sourcing efficiencies s Factor of production differences s High product development costs s Rapidly changing technology
s s

Measures:
x % 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 s Compatible technical standards s Common marketing regulations
s s

Measures:
x % 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 s Global competitors s Interdependence among countries
s
x Policy Link x Trade/Investment Link x Management Link

Measures:
x % of WW market attributed to imports/exports x % 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 Duplicate Activities Tailored Independent/ market-bymarket Lever Market Participation Activity Location Marketing Competitive Moves Global Pursuit of Global Share 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