ibm unit 01 gobalization

8/4/2019 IBM Unit 01 Gobalization

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By :

Prof. Amit Kumar


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Course: International Business Management

1. Globalization2. Global Trade & Theory

3. Global Technological Environment

4. Global Economic Environment5. Global Political-Legal Environment

6. Foreign Direct Investments

7. Regional Economic Integration

8. Strategy and Structure of International Business

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Global Business Management


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IILM-GSM

Global Business Management Globalization


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Contents

What is Globalization? Globalization of Markets

Phases of Market Globalization Drivers of Market Globalization

Internationalization of Firms Value Chain Globalization of Production Emergence of Global Economy Ripple Effect of Globalization Routes of Globalization

Case-Study: Arrow & Apparel Industry

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A fundamental shift is occurring in the world economy.

Process by which this shift occurs is commonly referred

as Globalization.

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What is Globalization?

National

Economy

IntegratedGlobal

Economy

A Shift From



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Facets of Globalization

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Globalization has several facets, including

Globalization of markets & Globalization of production.

Globalization

Of

Markets

Globalization

Of

Production



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The Globalization of markets refers to the merging of

historically distinct and separate national markets into

one huge global marketplace.

The falling barriers to cross-border trade have made it

easies to sell internationally.

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Globalization of Markets



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Since the 1800, we can identify four distinct phases in the

evolution of market globalization.

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Phases of Market Globalization

Phase of Period Triggers Key CharacteristicsGlobalization

Fourth

Phase

1980s

to

present

Radical advances

in information,

communication,

manufacturing;

privatization of

MNEs and

economic reforms

emerging country

Unprecedented rate of

growth in global trade of

products, services and

capital; focus on emerging

markets for export, FDI and

sourcing activities;

participation in international

business of SMEs



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In their own way, globalization and technological advances are

resulting in the death of distance.

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Death of Distance

In this time

Period

Fastest transportation

was via.. At a speed of.

1500 to 1840s

1850 to 1900

Early 1900s

to Today

Human-powered ships &

horse-drawn carriages10 miles per hour

Steamships

Steam Locomotive Trains

36 miles per hour

65 miles per hour

Motor Vehicles

Propeller airplane

Jet aircraft

75 miles per hour

300-400 miles per hour

500-700 miles per hour



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The term drivers refers to the global forces that have

fueled the process of globalization. These global

factors have acted as catalyst that have contributed to

the growth of international business.

Declining Trade and Investment Barriers

Technological Change

Emergence of Global Institutions

Integration of World Financial Markets

Drivers of Market Globalization

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Each value-adding activity is subject to internationalization;

that is, it can be performed abroad instead of at home.

The most typical reasons for locating value-chain activities in

particular countries are to reduce the costs of R&D and

production or to gain closer access to customers.

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Internationalization of Firms Value Chain

Stages in the Firms Value Chain

R&DProcurement

(Sourcing)Manufacturing Marketing Distribution Sales &

Services


G G


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GOP refers to the sourcing of goods & services from locationsaround the globe to take advantage of national differences in the

cost and quality offactor of production (such as labor, energy,land and capital).

By doing this, companies hope to lower their

overall cost structure and improve the quality or

functionality of their product offerings, thereby

allowing them to compete more effectively.

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Globalization of Production


Gl b l B i M t Gl b li ti


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Ripple Effects of GlobalizationEffects of globalization are varied, ranging from cultural degradation to the

fear of loss of sovereignty. We focus on the effects of internationalizationon management, Jobs, wages, child labor, women and lastly, developing

countries.

GLOBALIZATION

JobsDeveloping

Countries

Women at the

Workplace

Management

WagesChild

Labor

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Gl b l B i M t Gl b li ti


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Routes of GlobalizationThe usual routes of globalizations are exports and imports,

use of assets, performance of services..

Presence in Foreign Markets

Foreign

Investment

High

High

Low

Low

Exports &

Imports

Tourism &Transportation

Use of

Assets

Performance

of

Services

Direct Investment

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