Topic 1
Globalization
Globalization
• The world economic globalization process
– Theodore Levitt’s (1983) view:
• Technological advances altered communication, transportation, travel to create a global consumer who prefers standardized products.
• The entire world [or major regions of it] is now a single entity; an organization can sell the same things in the same way everywhere.
– Today’s view
International integration of goods, technology, information, labor, and capital.
Nothing is only a local event; all inventions, victories, and catastrophes affect the whole world.
Globalization is a result of:
• Political forces
– reduce barriers to trade and foreign investment.
– induce privatization of industries.
• Technological forces
– lead to advances in computers and communications technology.
– allow low cost network computing and ubiquitous Internet collaboration across borders.
Globalization Forces
• Market forces
– lead to globalizing companies’ need for their suppliers to globalize too.
– allow easier revenue seeking activity abroad due to home market saturation.
• Cost forces
– demand economies of scale -- product line and manufacturing -- to reduce unit costs.
– lower cost production factor seeking efforts in other countries.
• Competitive forces
– more intense due to explosive growth internationally of small and new businesses.
Globalization Forces
Globalization Example
Globalization Example
Globalization Example
• Alsea is the largest restaurant operator in Latin America of global leading brands in the fast food, cafeteria and casual dining segments.
• It has a diversified portfolio, with brands such as Domino’s Pizza, Burger King, Starbucks, Chili’s, Italianni’s, California Pizza Kitchen, PF Chang’s, Pei-Wei and The Cheesecake Factory.
• As of March 31, 2012, the company operated 1,431 units in Mexico, Argentina, Chile and Colombia.
• The Company has more than 27,600 employees.
Globalization Example
• Production
• Purchasing
• Distribution and Logistics: –4 Distribution
centers
–137 Cities visited per week with more than 3,300 deliveries
–1,367 Points of sale
• Finance and Accounting
• Technology and Systems
• Human Resources
• Real state development
• Internal Audit
Globalization Example
Globalization Example
Globalization Example
Globalization Example
Globalization Example
Globalization Example
Globalization Debate
• Supporting Free trade:
– enhances socioeconomic development.
– promotes more and better jobs.
• Concerns with Globalization:
– Produces uneven results across nations and people.
– Has deleterious effects on labor and labor standards.
– Contributes to the decline of environmental and health conditions.
http://www.youtube.com/watch?v=HYVRIIKb7DI&feature=related
Conclusion Globalization is like fire.
Globalization Debate
Summary
Globalization
• Definitions of globalization
– Theodore Levitt’s (1983) view: Technological advances to have standardized products.
– Today’s view: International integration of goods, technology, information, labor, and capital.
• Globalization Forces
– Political (reduce barriers, privatization)
– Technological (advances in communications, low cost network)
– Market (globalization of suppliers, home market saturation)
– Cost (economies of scale, lower cost production factor)
– Competitive (international growth of small and new business)