iipm lectures - global is at ion

8/8/2019 IIPM Lectures - Global is at Ion

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International Business

Globalisation


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Globalisation

What is Globalisation?


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Some Definitions- Globalisation

In literal sense, Globalisation is the process of transformation of local orregional phenomena into global ones. Make world-wide in scope orapplication

The process of going to a more interconnected world.

Generally defined as the network of connections of organisations andpeoples across national, geographic and cultural borders and boundaries

The increase of international trading and sharing of information, social andcultural values.

Globalisation : process in which geographic distance /boundaries are of diminishing importance for Trade andBusiness.


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Drivers of Globalisation

Production

(Supply)

Consumption

(Demand)

Enablers

(Supply Chain)

Value Created = Consumption (Production + Enablers)

Raw Material

Technology

Manpower

Manufacturing

Transport

Finance

Media

Sales & Distbn.

InformationTariffs/Govt. Policies

Marketing

Travel

Income

Opening of

economies


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Consumption Drivers

Per Cap income converging in Developed; increasing in

Developing economies

Convergence of lifestyles and tastes

Revolution in information, communication, media

Increasing travel

Establishment of world brands

Push to develop global advertising Opening of China and India economies


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Production Drivers

Continued push for Economies ofScale

Accelerating technological innovation

Emergence of neo industrialised countries with

productive capability and low labour costs.

Increasing cost of product development relative to

market life

Organisations behaving as global customers

Opening of China and India economies


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Enabler Drivers

Advances in transportation :quicker, cheaper, safer

Reduction of tariff/non tariff barriers

Creation of blocs

Modification of Govt. role to Enabler / Regulator

Opening / Privatisation of Govt. run economies

Globalisation of financial markets

Capability to own companies across geographies Revolution in information, communication, media


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Drivers Globalisation

Market drivers

Per capita income converging among ind ustrialised

nations

Convergence of lifestyles and tastes

Organisations beginning to behave as glob al customers

Increasing tr avel creating g lobal consu mers

Growth of global and regional channels

Establishment of worl d brands

Push to develop global advertising

Cost drivers

Continuing push for economies of scale

Accelerating technolog ical innovation

Advances in transportation

Emergence of newly industr ialised countries withproductive capability and low labour costs.

Increasing cost of prod uct development relative tomarket life

Government drivers

Reduction of tariff barriers

Reduction of non-tariff barriers

Creation of b locs

Decline in role o f governments as produ cers and

customersPrivatisation in previous ly state-dominated economies

Shift to open market economies from closed com munistsystems in eastern Europ e

Increasing participation of China and India in the glob aleconomy

Competitive drivers

Continuing increases in the level of world trade

Increased ownership of corpor ations by foreignacquirors

Rise of new competitors intent upon becoming glo balcompetitors

Growth of global networks making countriesinterdependent in particular industries

More companies becoming global ly centred rather thannationally centred

Increased formation of glo bal strategic alliances

Other drivers

Revolution in information and communication

Globalisation of financial markets

Improvements in busin ess travel


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Implications - Globalisation

Larger demand pool

Higher levels of Competition

Reduced Insulation / Protection

Complex organisations

Manage diverse socio/eco/political /legal

environments diverse yet similar


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Routes - Globalisation

Informal Trade/Smuggling

Distribution, Sales and Marketing

Setting up a local company - subsidiary/JV

M&A with existing local / global company

Licensing / Franchising

Outsourcing

Strategic supply contracts


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Debate - Globalisation

Hard Talk Video

UNSW Video


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Domestic vs International

Group Assignment

What are the advantages and disadvantages of beingan (choose any one) International Company

Domestic Company

Maximum limit 2 pages MM 10; weightage 3%

Submission deadline 18 Feb. via [email protected]


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Globalisation e.g.

Katee & Joshua

iipm lectures - global is at ion

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