SUMMARY OF

THE
GLOBALIZATIO
N OF MARKETS
Theodore Levitt

Aditya Bhusal

AIBS 6th semester

| 16010952
The Globalization of Markets

The Globalization of Markets by Theodore Levitt explains, why Companies must learn to
operate as if the world were one single market instead of focusing only on regional and
national differences. One the first paragraphs the author talks about the powerful force of
technology, the way it is bringing change in human behavior bringing a urge to have things
seen through the means of technology which is ultimately making the world smaller place to
live in compared to past. It is bringing a new commercial reality which is the emerge of
global market for standardized consumer products on a unimaginable scale. This led to a
huge benefit for corporations from enormous economic of scale in production, distribution
and other factors. It leaves behind the old accustomed difference in national or regional
preferences. The author has explained the impact globalization has brought which he has
expressed by writing, “Gone are the days when companies could sell last year’s models or
lesser versions of advanced products in the lesser developed world and gone are the days
when margins and profits were higher were higher abroad generally than at home”

He also talks about multinational corporation and Global corporation being two different
things, which is multinational operates in a number of countries, and adjusts its products and
practices in each at high relative cost whereas in the other hand, Global corporation operates
with resolute constancy, at low relative cost as if the, world were a single entity selling the
same things in the same way everywhere. He talks about the strategy of global corporation as
being necessity rather than an opinion. The worldwide communication has enhanced the
message of new modern technologies made to enhance work, raise living standards of people
and entertain them. The countries talking about preserving culture are the same countries
eager to transport modern goods, services and technologies. The author than gives examples
of various changes and consequences of Globalization. One of which is, the television scene
during the 1997 upspring of young men in French cut trousers thirsting with raised modern
weapons in the name of Islamic Fundamentalism.” Another example,” The organized
smuggling of electronic equipment, used automobiles, western clothing, cosmetics and
pirated movies into primitive places exceeding even the thriving underground trade in
modern machines and military machineries. Through his above examples, he is trying to
express the widespread of globalizations in reality.

The other paragraph on Living in the republic of technology has a line somewhere in the
middle which says “Nothing is exempt. The products and methods of the industrialized world
play a single tune for all the world, and all the world dances to it” which explains in a
sentence what the author is trying to tell through the paragraph. To illustrate it more, he is
saying that it is not what customer’s prefer and what their taste are but rather it is what is
commercial and what people see that brings in them urge or need to buy the product. It is like
creating a need for the product through its characteristics and qualities. The worlds preference
structure is intentionally homogenized for example the case of coca cola and Pepsi, which are
globally standardized sold everywhere and welcomed by everyone. Both successfully cross
multitudes of national, regional and ethnic taste buds trained to a variety of in graded local
preference of taste, flavor, consistency, and aftertaste.

Ancient difference in national taste and or modes of doing business disappear. Another
important topic the paragraph covers is, “The most effective world competitors incorporate
superior quality and reliability into the cost structures.” They sell in export market the same
kind of products they sell at home. They compete based on appropriate value; price, quality,
reliability and delivery. Countries like japan are able to achieve success in vast variety of
successful products both tangible like steel, automobiles, hi-fi equipment and intangible like

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The Globalization of Markets

banking, shipping, general contracting. The thing is that low cost operations are the hallmark
of corporate culture that require and produce quality in all that they do. And so is the truth for
japan that it produces quality products in low cost maximizing production and therefore
achieving success

The Topic Vindication of the Model T explains that if a company forces its cost and prices
and pushes its quality and reliability up the consumers will prefer its world standardized
products. They don’t do so by standardizing everything they produce and sell but rather they
have product lines instead of a single product versions, and multiple distribution channels.
Japan not being globalized by exporting left hand drive vehicles to US and Europe and while
it is diving right hand itself is to mistake a difference for a distinction. This is summarized in
a phrase which says, “National rues of the road differ, and so do the distribution channel and
languages. Japans distinctively is its unrelenting push for economy and value enhancement.
That translates into a drive for standardization at high quality levels.

The Other Paragraph, The Hedgehog knows explains how a fox knows a lot about a great
many things but the hedgehog knows everything about one thing in which Multinational
corporations are fox and Global Corporations are Hedgehogs. It explains the multinational
corporations constantly adapting to new market and customers demand but the Global
corporations focusing on one simple and constantly trying to standardize the product to a
even greater market. Similarly, the paragraphs below go on to explain how many
corporations failed to standardize world practice by exporting domestic products process
without accommodation or change solely due to lack of imagination.

There is a phrase in the paragraph which says, “Data do not yield information except with the
intervention of the mind. Information does not yield meaning except with the intervention of
the mind.” Which the writer suggests, explains the failure in Global Imagination. The last
paragraph the Earth is flat explains that the earth is round but it is sensible to treat is as flat.
The author argues that Cosmopolitanism is no longer the monopoly of intellectual and leisure
classes but it is is rather becoming the established property and defining characteristics of all
the sectors everywhere in the world making the world feel flat. In fact, he explains that there
is only one significant respect in which a company’s activities around the world are important
and that is in what it produces and how it sells.