Globalization

Dr. Vivek Sane

DEMOGRAPHIC

ECONOMIC

SOCIAL

SPIRITUAL

GLOBALIZATION

POLITICAL

CULTURAL

TECHNOLOGICAL

EDUCATIONAL

Different Approaches of Globalization

Companies with global parameters.

Companies as global subcontractors.

Comparative competitive advantages of companies Companies with acquisitions abroad. Intra-Corporate transfers.

Companies in service industry.

Indian Professionals abroad.

 Indian entrepreneurs abroad. Global source of funds. Global sources of man power. Commodity approach. Value addition Franchising. Licensing.

Commodity Approaches

Commodity approaches
Concept :- Word is referred to as

Agricultural Commodity such as Rice, Wheat, Pulses & even for fruits like Banana & Apples. Differentiation & place of production or manufacturing is irrelevant.

Conclusion :- Natures Gift. No

6 Different ways of Commoditization in globalization

Concept :- Gets applicable to manufacturing sector.
Assumption :- People

buy Brands & Not Products

1) Consumer Durable Companies such as

LG, Samsung, Haier come to India. They go for Contract Manufacturing (Build Brand 1st & factories afterwards)

2) For Products with Less Value Addition such as Bread, Biscuits, Cheese, Atta (Flour) companies completely outsource the products. E.g.:- Aashirwad ITC Nature Fresh Cargil.

3) Under Globalization, it is cheaper to import than to produce, so companies like Bajaj Electricals, Kenstar import brown goods from Thailand, Taiwan, Indonesia & sell them in India.

4) Many world class retailers such as Wall Mart, Carafore, Tesco, J.S. Penny (have their sourcing agents in India.) Products are made in India & kept in stores across the world, under private labels.

5) Same Brand, same company product. Customize to adjust Indian Customers wallet. E.g.:- Reebok, Cadbury, Pepsi.

6) Intra corporate Revenue Model. Body lotion sold in Australia by Unilever but made in India by Hindustan Unilever. Suzuki motors receive an orders for cars from Bangladesh actual production been done at Suzuki India.

Features of World Class Great Global Companies Part -A

Global Leadership & Ambition.
Sustainable Competitive Advantage. Scalability, Growth, Transnational. Acquisitions & Integration. Clear Vision & Focus Approach.

Research & Development, Innovation,

Product-Break-Through.

Part -B Great companies are constantly innovating and delighting their customers/ users with new products and services.

Great companies are built to last and be independent and sustainable. Great companies dont sell out.
Great companies make lots of money but leave even more money on the table for their users and partners.

Great companies dont look elsewhere for ideas. They develop their ideas internally and are copied by others.

Great companies infect their users/ customers with their brand. They turn their users and customers into marketing / sales forces.
Great companies are lead by entrepreneurs who own a meaningful price of the business. As such they take decisions based on long term business needs objectives, not short term goals.

Great companies have a global market.

Great companies are attempting to change the world in addition to making money. Great companies are not reliant on any one person to deliver their value proposition.

Great companies put the customer first above any other priority.

Understand. B. Environment Be Flexible/Adaptable. Brand Building & Deliverability. Credibility/Trust & Creditability. Drivers Of Growth Identity.
Technology Product Profiles

Economic Vote

Key Issues Raised When Indian Companies Go Global.

Clarity of Objective. Calibration Principle. (Phased Growth) Ownership Pattern Professionalism.

Cultural Integration.
Brand Building.

How strategy is formulated in Globalised Corporate Sector:

Five Drivers of future Business Conditions.
Extent of globalization in respective countries. Demographics (Internal to your market as well as external). Environmental & Natural resources (Constraints that come from these limited resources and the challenges from the environment). Changing consumer behavior and focus of power (Focus is shifting to services- education, Healthcare, entertainment, travel and leisure.) Regulation and activism.

10 Principles of Globalisation

 Make Product / Brand relevant Engaging & Connected, to the country where it is sold. Decide on Global Brand, Global appeal & Global Product From assembling to manufacturing decide on level of localizing components . Concentrate on Brand promise & never sacrifice quality Every Brand that goes beyond national border faces a fundamental question. What stays constant? What has no change?

 Remember difference between Brand & Product. X Brands are enduring promises that reside in consumer minds Products are transient thinks that vary over time and across geographies Crises as an opportunity, business as usual on growth Review Your and unusual on cost Options Leverage the power of information technology Think about the return on marketing investment (ROMI)
Customer Feedback Distributor Feedback Internal Feedback

 Take note of global events (e.g. recession/ Change of government etc.) Distant winds have a way of moving in faster than we imagine. Difference between wining and losing in the long run is leadership and integrity ( it is not just what you do or what you achieve but how you do it and how you achieve it & that stand the test of time.)