Organizations become more global

More Essay Examples on Economy Rubric When developing a globalization strategy, it is clear that the emerging markets present the greatest opportunity. The growth projections for Europe, Japan and the United States pale in comparison to some of the emerging markets. Emerging Markets Throughout the emerging markets an unprecedented consumer market boom is driving up demand for western-style goods and services. The largest segment of consumers in these markets is a decade short of its peak spending years.

Organizations become more global

An industry in which firms must compete in all world markets of that product in order to survive. An industry in which a firm's competitive advantage depends on economies of scale and economies of scope gained across markets.

Some industries are more suited for globalization than are others. The following drivers determine an industry's globalization potential. Flat experience curves in an industry inhibits globalization. Customer Drivers Common customer needs favor globalization. For example, the facsimile industry's customers have more homogeneous needs than those of the furniture industry, whose needs are defined by local tastes, culture, etc.

Furthermore, global customers often require globally standardized products. Global channels require a globally coordinated marketing program. Strong established local distribution channels inhibits globalization.

World brands with non-dictionary names may be developed in order to benefit from a single global advertising campaign. Competitive Drivers Global competitors: The existence of many global competitors indicates that an industry is ripe for globalization.

Global competitors will have a cost advantage over local competitors. When competitors begin leveraging their global positions through cross-subsidization, an industry is ripe for globalization.

Government Drivers Technical standards Regulations The furniture industry is an example of an industry that did not lend itself to globalization before the 's. Because furniture has a high bulk compared to its value, and because furniture is easily damaged in shipping, transport costs traditionally were high.

Government trade barriers also were unfavorable. IKEA's furniture was unassembled and therefore could be shipped more economically. IKEA also lowered costs by involving the customer in the value chain; the customer carried the furniture home and assembled it himself.

IKEA also had a frugal culture that gave it cost advantages. IKEA successfully expanded in Europe since customers in different countries were willing to purchase similar designs.

Different tastes in furniture and a requirement for more customized furniture. The Swedish Krona increased in value, increasing the cost of furniture made in Sweden and sold in the U.

Foreign Companies Compete With You Locally

Stock-outs due to the one to two month shipping time from Europe More competition in the U. Comparative advantage resides in the factor endowments and created endowments of particular regions.

Factor endowments include land, natural resources, labor, and the size of the local population. In the 's, Swedish economists Eli Hecksher and Bertil Ohlin developed the factor-proportions theory, according to which a country enjoys a comparative advantage in those goods that make intensive use of factors that the country has in relative abundance.

Porter argued that a nation can create its own endowments to gain a comparative advantage. Created endowments include skilled labor, the technology and knowledge base, government support, and culture. Porter's Diamond of National Advantage is a framework that illustrates the determinants of national advantage.

This diamond represents the national playing field that countries establish for their industries.Ten Reasons Why Businesses Are Going Global. and to an extent this is true because personal brands are becoming more prominent in the global business sphere.

So why are so many businesses. After more than 50 years of trying, the search for an ideal model of the global organization remains elusive. But intriguing new experiments are under way.

Consider if you will the following quotations, each from executives at Philips, the global technology company—one in the late s and one. Sam Palmisano: How to become a truly global company.

Subscribe; Home; How to become a truly global company. the more pressing and more pragmatic questions are the following: How do we deal. Decision-Making in Global Organizations In today's business environment, there is sustained pressure for companies to maximize productivity in order to be competitive in the marketplace.

Many businesses are moving a variety of activities, such as manufacturing and product development, to . To some the word "Globalization" may seem a cliché.

Organizations become more global

To others, it may appear an end in itself. Competitive pressures are creating the need for most companies to become Global. Why are organizations becoming more global?

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The global company’s challenge | McKinsey