5 Stages of Globalization

Stage 1
The first stage of globalization is the arm's length service activity. In this stage, domestic
company or institution will negotiate with other local dealers and distributors to build a new
market overseas or in the foreign countries. Domestic markets will then make sure that their
products is in good condition and are ready for export activities through the help or by linking up
the local dealers and distributors.

Stage 2
In this stage, the company or institution will enact the process of researching and planning on
its own. Company will conduct research that may help them in marketing their products. Also in
this stage the company will have planning activities by identifying the possible and potential
problems and weaknesses that may arise. In this way, it will help the company to be successful.

Stage 3
​In this stage, the domestic-based company will commence its operation on its own. The
company can market its product by offering free trial on their products and other marketing
strategies and even producing sales in foreign markets.

Stage 4
​In this stage, the domestic company will now operate in the foreign market supported by a
complete business system including Research and Development (R&D) and Engineering which
is essential for a company to officially operate overseas. However, the company is still
controlled by its own.

Stage 5
​In this stage, the company or institution will now fully operate globally wherein they have the
capacity to serve or to provide the needs of the local customers in the markets around the
globe. And this requires a transition of the organizational structure of the company. The
company must create a system of values that is being shared by the global managers.