Industry Globalization

1
Industry Globalization

• What is a global industry? Why?
• Which drivers/factors most important?
• How does a global industry compare with a
  multi-domestic one?
• How is the extent of globalization measured?
• What are the implications for firms
  international strategies?

2
Globalization Drivers

• Market Drivers
• Cost Drivers
• Government Drivers
• Competitive Drivers

High Global
Low Multi-domestic
3
Market Globalization Drivers

• Common customer needs
• Global customers
• Global market channels
• Transferable marketing
• Measures
• of WW sales attributed to standardized products

4
Strength of Market Drivers
Aircraft
Computers
Automobiles
Soft Drinks
Toothpaste
Retail Banking
Beer?
Book Publishing
Baked Goods
Low
High
Multidomestic
Global
5
Cost Globalization Drivers

• Global scale economies
• Sourcing efficiencies
• Factor of production differences
• High product development costs
• Rapidly changing technology
• Measures
• of WW market needed to achieve MES

6
Strength of Cost Drivers
Pharmaceuticals
Aircraft
Computers
Automobiles
Toothpaste
Retail Banking
Baked Goods
Soft Drinks
Low
High
Multidomestic
Global
7
Government Globalization Drivers

• Unrestrictive trade and investment policies
• Compatible technical standards
• Common marketing regulations
• Measures
• of countries that possess uniform or mutually-
  recognized technical standards

8
Strength of Government Drivers
Toothpaste
Baked Goods
Soft Drinks
Computers
Automobiles
Pharmaceuticals
Airlines
Internet Commerce? Genetically engineered foods?
Retail Banking
Low
High
Multidomestic
Global
9
Competitive Globalization Drivers

• High two-way trade / cross-border FDI
• Global competitors
• Interdependence among countries
• Policy Link
• Trade/Investment Link
• Management Link
• Measures
• of WW market attributed to imports/exports
• of WW market attributed to top 4-8 firms

10
Strength of Competitive Drivers
Aircraft
Pharmaceuticals
Computers
Toothpaste
Automobiles
Soft Drinks
Retail Banking
Baked Goods
Low
High
Multidomestic
Global
11
Industry Globalization and Strategy

• Lever
• Market Participation
• Activity Location
• Marketing
• Competitive
• Moves

Global Pursuit of Global Share Follow Global
Driver Standardize Interrelated/ Coordinated
Multidomestic Based on Interest Duplicate
Activities Tailored Independent/
market-by-market
12
Beer Industry and Globalization

• Driver
• Market
• Cost
• Government
• Competitive

Global
Multidomestic
13
Mobile Phone Industry and Globalization

• Driver
• Market
• Cost
• Government
• Competitive

Global
Multidomestic
14
Managed Healthcare Industry and Globalization

• Driver
• Market
• Cost
• Government
• Competitive

Global
Multidomestic