Globalization

Market and competition

Chapter 1: Globalisation

bichdn@ueh.edu.vn
Some considerations of LMS assignment
1. Writing Strategy
2. The power of outline
3. Re-vision and References
Signpost for today
1.Recall globalization knowledge from macro environment
perspective
2.Factors push/against globalisation
3.Opportunities and challenges from globalization for firms
4. Steps of globalization for the firms
5.Make distinction between between different levels of IB
6.Global/local mapping
Story begins
In the 1960s:
- International trade, investment and migration have grown faster
- Some facts:
+ brands appear worldwide
+ factories: shift to developing countries
+ 24/24 (real time) working process due to the Internet
 Trend away from distinct
national economic units and
towards one huge global market
(Charles. 2015)
The process by which people,
DEFINITION products, information and
money can move freely across
border (Lasserre, 2018)
Nghiên cứu
 The birth of
“global
organisation/group GLOBALISATION

/transactions"
 Global Industry
(Ngành toàn cầu) ● Firms need to operate in
the key world market in
an integrated and
coordinated way => cost
and time effective
 Multinational
companies (Công
- Operate in various
ty đa quốc gia)
countries outside their
countries of origin
- LARGE VS. MINI
Global firm (Công
ty toàn cầu) Operate in the main markets
of the world in an integrated
and coordinated way.
HSBC, APPLE, NESTLE...
 - Structure and management
Global process by which various
activities across the world are
integration and made interdependent
Eg:
coordination Global manufacturing:
specialization, cross-shipment of
part between production sites
Let's watch the following video
https://www.youtube.com/watch?v=gEmu3Dz--bM
https://www.youtube.com/watch?v=Otpu2uwWIOM

Why is it more difficult for Apple to

manufacture their products in the US?
2. Globalisation from macro perspective
•What is macro perspective?
No organisation exists in a vacuum, the
environment is dynamic and changing constantly.
Uncontrollable?
Political factor
•GATT vs WTO: development of free trade among nations
•Common market/economic/political integration
=> goods, people and financial flows smoother
Common
market
TARIFF REDUCTION AND
INTERNATIONAL TRADE
FDI
WHY DECLINE?
WHY DECLINE?
•FDI in the United Kingdom down 6% as Brexit unfolds.
•Hong Kong, China divestments cause a 48% FDI decline among
turbulence.
•Singapore up 42% in a buoyant region of the Association of Southeast
Asian Nations.
•Zero-growth of flows to both the United States and China.
TECHNOLOGY FACTOR
A. Transportation: speed and cost
TECHNOLOGY FACTOR
B. Communication
TECHNOLOGY FACTOR
SOCIAL FACTOR - VĂN HOÁ XÃ HỘI
Culture convergence: habits, interests, trends
COMPETITIVE FACTOR - CẠNH TRANH
GLOBAL PLAYERS

GLOBAL CONSUMERS - NEED AND DEMAND

GLOBAL TRANSACTION
AGAINST FACTORS
Legal, Culture, Technical, Commercial
AGAINST FACTORS
Legal, Culture, Technical, Commercial
•Culture:
-Barriers of religion and traditions
-IMPOSSIBLE to standardize values and norms
-Nationalism, taste and social code
AGAINST FACTORS
Legal, Culture, Technical, Commercial
•COMMERCIAL:
Distribution network
Customisation
Responsiveness
AGAINST FACTORS
Legal, Culture, Technical, Commercial
•TECHNICAL
- Language
-Spatial presence (service industry- physical space=>
user)
-Transportation impediment
-Technical standard
Business mindset regards Globalization
-Cost: economy of scale when standardisation; bargaining power of
supplier; international logistics and network
-Timing: first-mover advantages, renew product life cycle
-Learning opportunities: between subsidiaries
-Arbitrage: use resources of different nations to gain benefits
 PLEASE identify the impacts of
Let’s check your Covid 19 on globalisation

attendance^.^ ● Research time: 15 mins

● Discussion time: 10 mins

COVID 19
Each group prepare a poster and
submit via LMS system
 Globalisation ● You can find extra
information in HBR.ORG
“MOVEMENT-FLOW perspectives)
Trade Flows
Capital Flow
Information Flow
EVERYTHING GOES ONLINE
 People Flow
 
personal mobility had to be restric
ted
The movement of business in globalisation
● LETS READ THROUGH OTIS EXAMPLE
● QUESTIONS:
What are differences between two phases/period?
Three stages of IB and GB

MULTINATIONAL
GLOBAL - TOÀN CẦU
ĐA QUỐC GIA
EXPORT -
XUẤT KHẨU
Let's watch
https://www.youtube.com/watch?v=7h8vS0TTmlo

1. Determine WHICH FACTORS IN THE AD indicate standardisation and

adaptation
2. Which factors does it push the standardisation/ localisation and why
Let’s check your understanding
1. Which of the three propositions defines the difference between a global
company and a multinational company?
A. No difference: both terms define firms that operate internationally in
many countries
B. It is a matter of size: a multinational firm is a small global firm
C. A global firm operates in the main markets of the world in an
integrated and coordinated way while a multinational firm’s
international operations are managed on a country-by-country basis
D. Multinational firms adapt their products to local markets, while global
firms sell only standardized products
Let’s check your understanding
Which factor is not conducive to globalization?

A> GATT and WTO

B. The Internet

C. The reduction in transportation costs

D. Cultural differences between countries

Let’s check your understanding
Among those elements, which three constitute an argument against globalization?

A. Disruption of employment in industrialized countries

B. Harm to human rights
C. Standardization and reduced diversity of products
D. Encouragement of conflict among nations
E. Disruption of national cultures

What is the main attribute of industries or segments that are both ‘local’ and ‘global’ (type III)?

F. Industries which require both economies of scale in production, and flexibility for satisfying diverse customer
requirements
G. Industries in which firms use simple processes
H. Industries which depend mainly on natural resources
I. Industries intensive in R&D
Let’s check your understanding
What is the main reason why Amazon is obliged to open subsidiaries outside the USA?

A. Language differences
B. Local governments require it
C. Transportation costs are too high relative to the price of goods delivered
D. To manage taxes globally

What is the ‘arbitrage benefit’ enjoyed by global firms?

E. Global firms can take advantage of cost differences among the countries in which they operate
F. The benefits of being big and therefore influencing local governments
G. The search for dominant positions
H. The benefit of speculation on the stock markets
Let’s check your understanding
Which two of the following are benefits of having a global management model versus a multinational one (choose all that
apply)?

A. Agility in adapting to local conditions

B. Cost reduction through economies of scale
C. Ability to address customer diversity all over the world
D. Speed of action in launching new products

When is there a learning deficit instead of a learning benefit for a global firm? (Select both answers that apply).

E. When learning is not easy

F. When learning gained in one country is not applicable to other countries
G. When governments control media and publications
H. When there is a resistance to learning from other subsidiaries
Aha!

TASK
PICK A GIANT FIRM THAT YOU
LIKE

1. Use a map in page 21 to

determine type of global or
local that it should adopt

2. Justification required

3. APPENDIX 1.1
So…
Next week
Emerging market