International Business Environment & Strategy
Drivers of Globalisation June 2010
Slides based on Yip, G. (1995):- Johnson, Scholes & Whittington (2005)
“Exploring Corporate Strategy”, 7th edition
Robert Jones © 2010
Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
Drivers of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Global strategies
• Similar customer needs • Global customers • Transferable marketing
Drivers of globalisation
Global market convergence
Global market convergence
Similar customer needs e.g. Personal computers Mobile phones i-Pod
Global customers Europe Americas Asia Africa
Transferable marketing Global marketing Local adaptation – especially with car models
Global strategies
• Similar customer needs • Global customers • Transferable marketing
Drivers of globalisation
Cost advantages
Global market convergence
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
Drivers of globalisation
Cost advantages
Global market convergence
Global competition
Global competition
Interdependence Global alliances – car industry - airlines - electronics
Competitors global Top firms have #1 / #2 market shares in many nations Global car makers
High exports / imports Many electronic products are made in China Shoes are made in Vietnam “Home” markets are disappearing
Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
Drivers of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Government influence
Trade policies Falling barriers to trade Liberalisation & deregulation WTO / EU and trading bloc policies
Technical standards ISO replaces national standards (BS, DIN, ASA) Computer software is international Safety & quality standards:- Pharmaceutical, aviation, automobile sectors
Host government policies Sensitivity is needed National differences still exist
Argentina Australia Brazil Canada China France Germany India Indonesia Italy Japan Mexico Russia Saudi Arabia South Africa Republic of Korea Turkey United Kingdom United States of America
Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
Drivers of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
How do these Drivers of Globalisation affect us?
Think of the 4 Cs:-
Competition is increasing
Costs must be reduced constantly
Customers are ever more demanding
Country differences are still important
R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
The 4 Cs of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Country
Customer
Cost
Competition
Sources of Culture
Language/s Nationality Education Profession Ethnic group Religion Family Sex Social class Corporate or organisational culture
Culture
Based on Usunier (2000) Marketing Across Cultures, Pearson Education Ltd
Sources of Culture
R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
The 5 Cs of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Country
Customer
Cost
Competition
Culture
R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
The 6 Cs of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Country
Customer
Cost
Competition
Culture Converging technologies, E-business
R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
The 6 Cs of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Country
Customer
Cost
Competition
Culture Converging technologies, E-business
© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
More Cs of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Country
Customer
Cost
Competition
Culture Converging technologies, E-business
Credit crunch Currency
© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
More Cs of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Country
Customer
Cost
Competition
Culture Converging technologies, E-business
Credit crunch Currency
Collaboration
Common platform
© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
More Cs of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Country
Customer
Cost
Competition
Culture Converging technologies, E-business
Credit crunch Currency
Climate change CO2
Collaboration
Common platform
© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall
Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2
• Trade policies • Technical standards • Host government
policies
Global strategies
• Similar customer needs • Global customers • Transferable marketing
• Interdependence • Competitors global • High exports / imports
More Cs of globalisation
Government influence
Cost advantages
Global market convergence
Global competition
Country
Customer
Cost
Competition
Culture Converging technologies, E-business
Credit crunch Currency
Climate change CO2
Collaboration
Common platform
Copenhagen