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Industry Globalization

What is a global industry? Why?


Which drivers/factors most important?
How does a global industry compare with a
multi-domestic one?
How is the extent of globalization
measured?
What are the implications for firms
international strategies?
Globalization Drivers
Market Drivers
Cost Drivers
Government Drivers
Competitive Drivers

Low High

Multi-domestic Global
Market Globalization Drivers
Common customer needs
Global customers
Global market channels
Transferable marketing

Measures:
% of WW sales attributed to standardized
products
Strength of Market Drivers
Aircraft
Computers
Automobiles
Soft Drinks
Toothpaste
Retail Banking
Book Publishing
Beer?
Baked Goods
Low High
Multidomestic Global
Cost Globalization Drivers
Global scale economies
Sourcing efficiencies
Factor of production differences
High product development costs
Rapidly changing technology

Measures:
% of WW market needed to achieve MES
Strength of Cost Drivers
Pharmaceuticals
Aircraft
Computers
Automobiles
Toothpaste
Retail Banking
Baked Goods
Soft Drinks
Low High
Multidomestic Global
Government Globalization Drivers
Unrestrictive trade and investment policies
Compatible technical standards
Common marketing regulations

Measures:
% of countries that possess uniform or
mutually- recognized technical standards
Strength of Government Drivers
Toothpaste
Baked Goods
Soft Drinks
Computers

Automobiles
Pharmaceuticals
Airlines
Internet Commerce?
Retail Banking
Genetically engineered foods?

Low High
Multidomestic Global
Competitive Globalization Drivers
High two-way trade / cross-border FDI
Global competitors
Interdependence among countries
Policy Link
Trade/Investment Link
Management Link

Measures:
% of WW market attributed to imports/exports
% 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 High
Multidomestic Global
Industry Globalization and Strategy
Multidomestic Lever Global
Based on Market Pursuit of
Interest Participation Global Share

Duplicate Activity Follow Global


Activities Location Driver

Tailored Marketing Standardize

Independent/ Competitive Interrelated/


market-by- Moves Coordinated
market
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