International Business

Environment & Strategy

Drivers of Globalisation
June 2010
Slides based on Yip, G. (1995):Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th edition
Robert Jones 2010

What is globalisation?
Causes?
Effects?
Pros & cons?

Global market
convergence

Similar customer needs

Global customers
Transferable marketing

Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Cost
advantages

Interdependence
Competitors global
High exports / imports

Global
competition

Drivers of globalisation
Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

Global market
convergence

Similar customer needs

Global customers
Transferable marketing

Global
strategies

Drivers of globalisation

Global market convergence

Similar customer needs
e.g.
Personal computers
Mobile phones
i-Pod
Global customers
Europe
Americas
Asia
Africa
Transferable marketing
Global marketing
Local adaptation especially with car models

Global market
convergence

Similar customer needs

Global customers
Transferable marketing

Global
strategies

Cost
advantages

Drivers of globalisation

Employees at a call centre in the southern

Indian city of Bangalore.

Global market
convergence

Similar customer needs

Global customers
Transferable marketing

Global
strategies

Cost
advantages

Interdependence
Competitors global
High exports / imports

Global
competition

Drivers of globalisation

Global competition
Interdependence
Global alliances car industry
- airlines
- electronics
Competitors global
Top firms have #1 / #2 market shares in many nations
Global car makers
High exports / imports
Many electronic products are made in China
Shoes are made in Vietnam
Home markets are disappearing

Is my Toyota Corolla a Japanese car or?

A global airline alliance:-

Global market
convergence

Similar customer needs

Global customers
Transferable marketing

Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Cost
advantages

Interdependence
Competitors global
High exports / imports

Global
competition

Drivers of globalisation
Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

Government influence
Trade policies
Falling barriers to trade
Liberalisation & deregulation
WTO / EU and trading bloc policies
Technical standards
ISO replaces national standards (BS, DIN, ASA)
Computer software is international
Safety & quality standards:Pharmaceutical, aviation, automobile sectors
Host government policies
Sensitivity is needed
National differences still exist

7th Session of the WTO Ministerial Conference

in Geneva 30 November to 2 December 2009

Argentina
Australia
Brazil
Canada
China
France
Germany
India
Indonesia
Italy
Japan
Mexico
Russia
Saudi Arabia
South Africa
Republic of Korea
Turkey
United Kingdom
United States of America

Global market
convergence

Similar customer needs

Global customers
Transferable marketing

Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Cost
advantages

Interdependence
Competitors global
High exports / imports

Global
competition

Drivers of globalisation
Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

How do these Drivers of Globalisation affect us?

Think of the 4 Cs:Competition is increasing
Costs must be reduced constantly
Customers are ever more demanding
Country differences are still important

The 4 Cs of globalisation
Global market
convergence

Customer
Similar customer needs
Global customers
Transferable marketing

Country
Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Interdependence
Competitors global
High exports / imports

Cost
advantages

Cost

Competition
Global
competition
R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

Sources of Culture
Sources of Culture

Culture

Language/s
Nationality
Education
Profession
Ethnic group
Religion
Family
Sex
Social class
Corporate or organisational culture

Based on Usunier (2000) Marketing Across Cultures, Pearson Education Ltd

The 5 Cs of globalisation
Global market
convergence

Culture

Customer
Similar customer needs
Global customers
Transferable marketing

Country
Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Interdependence
Competitors global
High exports / imports

Cost
advantages

Cost

Competition
Global
competition
R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

The 6 Cs of globalisation
Global market
convergence

Culture

Customer
Similar customer needs
Global customers
Transferable marketing

Converging technologies,
E-business

Country
Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Interdependence
Competitors global
High exports / imports

Cost
advantages

Cost

Competition
Global
competition
R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

The 6 Cs of globalisation
Global market
convergence

Culture

Customer
Similar customer needs
Global customers
Transferable marketing

Converging technologies,
E-business

Country
Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Interdependence
Competitors global
High exports / imports

Cost
advantages

Cost

Competition
Global
competition
R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

http://www.bankofengland.co.uk/monetarypolicy/assetpurchases.htm

More Cs of globalisation
Global market
convergence

Culture

Customer
Similar customer needs
Global customers
Transferable marketing

Converging technologies,
E-business

Country
Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Cost
advantages

Cost

Interdependence
Competitors global
High exports / imports

Competition
Global
competition

Credit
crunch

Currency

R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

More Cs of globalisation
Global market
convergence

Culture

Customer
Similar customer needs
Global customers
Transferable marketing

Converging technologies,
E-business

Country
Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Cost
advantages

Cost

Interdependence
Competitors global
High exports / imports

Collaboration
Common
platform

Competition
Global
competition

Credit
crunch

Currency

R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

http://unfccc.int/essential_background/feeling_the_heat/items/3157.php

More Cs of globalisation
Global market
convergence

Culture

Customer
Similar customer needs
Global customers
Transferable marketing

Climate
change

CO2

Converging technologies,
E-business

Country
Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Cost
advantages

Cost

Interdependence
Competitors global
High exports / imports

Collaboration
Common
platform

Competition
Global
competition

Credit
crunch

Currency

R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

More Cs of globalisation

Copenhagen Climate
change
Global market

CO2

convergence

Culture

Customer
Similar customer needs
Global customers
Transferable marketing

Converging technologies,
E-business

Country
Government
influence

Trade policies
Technical standards
Host government
policies

Global
strategies

Cost
advantages

Cost

Interdependence
Competitors global
High exports / imports

Collaboration
Common
platform

Competition
Global
competition

Credit
crunch

Currency

R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT
Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2