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1. Summarize each benefit a company might obtain from the globalization of

markets.
- A company might gain benefits from the globalization of markets in reduction of
marketing costs through standardization of activities, creation of new market
opportunities abroad, and equality of uneven income streams for global seasonal
products.

2. How might a company benefit from the globalization of production?

- Benefits a company can obtain from the globalization of production are the access
to technical expertise, access to unavailable or costly production inputs, and the
access to lower-cost workers that cut the overall production costs.

3. Describe the two major forces that drive globalization and how they work
together to expand globalization.
- The major driving forces are falling barriers to trade and investment and
technological innovation. A treaty called General Agreement on Tariffs and Trade
(GATT) was created to promote free trade by reducing tariffs and nontariff barriers to
international trade, it then created World Trade Organization (WTO) to enforce
rules of international trade. It helps to improve the free flow of trade, negotiate the
further opening of markets, and settle trade disputes. In addition to WTO, smaller
groups of nations are integrating their economies by fostering trade and boosting
cross-border investment. This is known as Regional Trade Agreements, which are
signed by the governments to liberalize or facilitate trade on regional basis.
Additionally, technology accelerates globalization by making it easier, faster, less
costly to move data, goods, and equipment around the world. The common
technological innovations which adopted by the businesses are email, video
conferencing, internet, world wide web, company intranets and extranets, and
advancements in transportation technologies. These two major forces work together to
increase competition among nations by leveling the global business playing field.
4. Explain how technological innovation impacts globalization and how it is
accelerating the process.
- When business and consumers use technology to conduct networks transactions,
they engage in e-commerce to purchase, sell, or exchange products, to service
customers, and to collaborate with partners. By using e-mail and videoconferencing, it
speed up the flow of information and ease the task of coordination and control.
Furthermore, companies use Internets to reduce the cost of reaching international
customers, sharpen their forecasting, lower their inventories, and improve suppliers’
communication. Internal company websites and information networks give employees
access to company data, and thereby improving communication and management.
Retailers worldwide reply on imports to stock up their finished goods and to supply
raw materials to factories. Advancements in transportation technologies help
globalizing markets and productions by making it more efficient and dependable.

5. Sun Tzu, a Chinese military strategist who lived 2,500 years ago, said:
“Know the weather and the field – your victory will be complete.”
“Without local guides, your enemy employs the land as a weapon against you.”
How can these be applied in international business?
- Know the weather means understand the customers by performing market segment
analysis and focus on most promising groups of likely customers. Whereas, the field
indicates conditions of the local business, you must know the barrier and drivers to
the business. To succeed in foreign markets, you must hire local managers to compete
against the local companies who understand local cultures

6. How does this current period of globalization compare with the first age of
globalization?
- The current drivers of globalization are communication satellites, fiber optics,
microchips, and the Internet which are more advance technologies compare to the first
stage. Whereas, the first stage of globalization drivers were steamship, telegraph,
railroad, telephone, and airplane.

7. What are the claims of those who say globalization eliminates jobs, lowers
wages, and exploits workers? Are the claims true?
- Some groups claim globalization eliminates manufacturing jobs in develop nations,
they criticize the practice of sending good-paying manufacturing jobs abroad to
developing countries where wages are a fraction of the cost for international firm.
Opposition groups say globalization causes worker dislocation that gradually lowers
wages. They allege that, when a manufacturing job is lost in a wealthy nation, the new
job pays less than the previous one. They also criticize that globalization an
international outsourcing exploit workers in low-wage nations. The claims are not
completely true, there are some jobs get eliminated but meanwhile, globalization
creates jobs in other sectors of that nation’s economy. The real point of differences
between the two sides of debate is whether overall gains that accrue to national
economies are worth the lost livelihoods that individuals suffer.

8. Summarize the claims of each side in the debate over globalization’s influence
on cultures.
- The groups that against globalization claim that globalization homogenizes our
world and destroys our rich diversity of cultures. It wipes out the small local
businesses as well. In the contrast, the supporters claim that globalization allow
nations to specialize and trade for goods which they do not produce, import other
peoples’ cultural goods, and protect deeper moral and cultural norms.

9. What are the several myths that keep small companies from engaging going
global and the facts that dispel these myths?
- No export financing available for small businesses, they have no place to turn for
export advice. The licensing requirements needed for exporting are not worth the
effort. Small businesses do not have the right people to assist in exporting as well.
Moreover, they find it difficult to research and identify international market. They do
not have enough capital to raise fund.

CASE STUDY: How General Electric Is Reinventing Itself

1. What are the similarities and differences between GE’s traditional innovation
and reverse innovation?
- Traditional innovation begins in developed countries and then sold in the emerging
nations, the cost of innovation is more expensive. Whereas, reverse innovation begins
in emerging nations, it focuses on low costs and simplicity in order to be profitable in
the emerging nations.

2. Why is GE so interested in reverse innovation?

- The developed economies are saturated by competitors, at contrary, the emerging
country is untapped. It can be a source of competitive threats, If a MNE does not use
that approach, it may be ultimately destroyed by those who do. In the Indian market,
reverse innovation is cheaper, it designs what local market needs.

3. What is the main concern that prevents Western MNEs from aggressively
investing in emerging economies? What are the costs if they choose not to focus
on emerging economies?
- Investing in emerging markets will take a long time to be profitable, while investing
in developed economies is more profitable in the short run. If they choose not to focus
on emerging economies, the firm might miss out on the long run potential benefits
and might be overtaken by emerging economy MNEs.

4. Why is a leading U.S. MNE such as GE afraid of emerging multinationals

from emerging economies?
- Emerging economies exist anywhere, and they are cheaper in terms of production
costs such as raw material costs, labour costs and technology research costs. If the
product is competitive in emerging countries, it can be a low-cost product in
developed economies.

5. What does the General Electric’s experience tell you about the nature of true
global businesses?
- True global companies must have subsidiary or branches worldwide, for instance,
Mc Donald. It is important to have multinational corporation team of worker to
operate the business (foreign+local workers). A top manager must have global
mentality.