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 Interest

Duplicate Activities

Tailored

Independent/ market-by-market

Market Pursuit of Global

Participation Share

Activity Follow Global

Driver
Location

Standardize
Marketing
Interrelated/
Competitive Coordinated
Moves
 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