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Transport by rail and sea long trade routes-increases the
international goods trade
Telephone and telegraph a better communication for companies,
especially in relation with the supply chain
Automated production


The emergence of American and European extractive and
manufacturing industries
Production of electricity and steel
The territories under European control - ideal places to establish
subsidiaries of European multinationals
The expansion of U.S. multinationals to profitable European
The Phase ends with the crisis of 1929 - with effects on changes in
government policies



GATT the first efforts to reduce trade barriers appear
The reconstruction process after the second World War appears-
the massive increase in demand for consumer goods, USA - leader
of the globalization
The re-build of Japanese multinationals
Increase in the importance of product brand


ICT - PCs, automation
Change in government policy- liberalization
Increased FDI in less developed countries
Technological innovations in transport, global marketing and
branding appear

Globalization Theories
There are various theories on globalization
1) Douglas and Wind (1987), Ohmae (1989) - some products are global,
others are not
The degree of globalization of an industry
Not all industries have the same degree of globalization for the
competition - the different dynamics of the economic, technologic and
competitive factors
Global industry/with a high level of globalization?
The industry in which the companys competitive position in a
country is significantly influenced by its situation in another country
The factors that determine a global industry: - the measure in which a
certain industry makes necessary the integration of activities that bring added
value on the value chain

Globalization Theories-Seq.
2) Theodore Levitt (1983)
-Technology- is the determinant force behind the globalization of markets
leading to a final homogenization of the demand, together with:
-Identical products are sold on the market
-The industries are dominated by large corporations that benefit from scale

Market related
Globalization Theories-Seq.

3) George Yip model (2003)
Factors of the

Cost related

The George Yip Model (2003)-seq.
Factors of the competitive environment :
-The global strategies of competitors
-National economies interdependences

Cost related factors:
-Economies of scale and scope, including the decreasing curve of the products
development costs;
-The experience curve;
-Development of logistics;
-Exploiting cost differences between countries.

The George Yip Model (2003)-seq.
Market related factors:
-similar preferences between consumers;
-emergence of global consumers;
-marketing practices that can be transferable between countries ( scale economies-
obtained from marketing);

The George Yip Model (2003)-seq.
Government related factors:
-Commercial policies, decrease in price barriers, subsidizing domestic companies;
-Commercial policies that support a local component in the products it makes (local
content requirements), control over technology transfer, intellectual property rights,
capital and financial flows;
-regulations for the local market enforced by the government, technical standards;

The effects of globalization-positive effects
For companies For clients For countries
Increased access to
markets/access to markets
with mass consumption
Lower prices Better life standards both in
developed countries as well as
in developing countries
Scale economies and low costs A wider choice possibility The development of
democratic processes
Access to resources Improved quality
Access to lower taxes in other

The effects of globalization-positive effects
Pagina 20 este deja in engleza-grafic
The effects of globalization-negative effects
For companies For clients For countries
Increased competition Product standardization Loss of national identity and
More educated and demanding
Pollution Unequally distributed benefits
Increased volatility of the
international environment

Trends of the international business environment from the
perspective of globalization
The globalization phenomenon has reached both the production as well as the
services area;
There are wide scale changes in the distribution of production-the relocation of
production (increased and stable production in South-East Asia and decreasing in
North America and Europe);
Certain countries have specialized on production and others on industry and
The global recession and the major differences between the economic increase
rates-leas to changes in the distribution of wealth and income in the world;

Trends of the international business environment from the
perspective of globalization-seq.
The economic and political unions such as EU, IMF have grown in importance and
The states nuclear power grew;
The religious fundamentalism increased;
The threat of international terrorism appears;
The tendency to shift from multilateralism to unilateralism (for example - the power
enforced by the USA on other states)
The role of governments in the international business environment and world economy is
gradually changing.
Trends of the international business environment from the
perspective of globalization-seq.
The prevalence of long-term unemployment;
The continuance of the European integration process for other regional
Increase in pollution, waste of resources and water scarcity;
High availability of information and ease of communication;
The technological progress, including in the ICT area, biotechnology,
genetics, robotics, etc..
A demographic transition characterized by declining birth rates, which led
to an increased life expectancy and an aging population the so-called
'demographic time bomb'- with long-term implications on government
policies, especially in the taxation and health sector;
Dynamic national and international cultures, mass immigration, cultural
interaction, tolerance and intolerance
Changing the attitudes towards family, health, crime and society.

At a general level:
-All these trends have a significantly impact both on companies as well as on governments
and individuals;
-All these environment forces act as a group both on international business as well as on
national business;
-These factors are influenced and influence, in their turn, the wider trends of economic
growth, employment and investments.
At the company level/long term strategy:
-Due to the fact that the environment factors are unpredictable, the planning processes must
be flexible, adaptable;
-The necessity arises for an increased organizational flexibility;
-At the individual/group level:
- Individuals can no longer count on working in a stable environment or count on abilities or
responsibilities that do not change;
The rapid pace of the market and the technological changes, the increase in the amount of
information, the changes in the economic area and the competitive pressures - determine the
need for employees to renew their skills and abilities according to the demands of the
Individuals must adapt to change at least as fast as the business environment;
Effects: flexible work practices-part-time, teleworking, on a determined period, etc
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Implications for governments
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Ranking of the most competitive
countries, 2001-2002 (WEF)
Ranking of the most
competitive countries,
2012-2013 (WEF)
1. Finland 1. Switzerland
2. USA 2. Singapore
3. Canada 3. Finland
4. Singapore 4. Sweden
5. Australia 5. Holland
6. Norway 6. Germany
7. Taiwan 7. USA
8. Holland 8. UK
9. Sweden 9. Hong Kong
10. New Zeeland 10. Japan