Cost Pressures and Pressures for

Local Responsiveness
Firms that compete in the global marketplace
typically face two types of competitive pressure that
effect their ability to realize location economies and
experience effects, to leverage products and transfer
competencies and skills within the enterprise which
are:

1.Pressures for cost reductions

2.Pressures to be locally responsive_x0000_
Pressures for cost reductions
• Responding to pressures for cost reduction requires
a firm to try to lower the costs of value creation.
• _x0000_Universal needs
- exist when the tastes and preferences of
consumers in different nations are similar if not
identical._x0000_
• Pressures for cost reduction can be particularly
intense in industries producing commodity-type
products where meaningful differentiation on
nonprice factors is difficult and price is the main
competitive weapon_x0000_