ASSESSING INTERNATIONAL MARKETS

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ASSESSING INTERNATIONAL MARKETS
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READING LIST

• I Globalization

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I.1. Sense and Nonsense in the Globalization
Debate

• Is globalization a source of prosperity or is it
  a threat to social stability?
• Has globalization advanced so far that national
  governments are virtually powerless?
• Is the shift of manufacturing activities to LDCs
  undermining global purchasing power?
• To what extent have capital mobility and the
  outsourcing of production Increased the
  substitutability of domestic labour?
• Are domestic economies submerged ina seamless,
  unified world market?

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• The anxieties generated by globalization
  ensuring adequate levels of employment,
  establishing social safety nets providing
  medical and social insurance, and caring for the
  poor
• Welfare state
• International economic integration poses a
  serious dilemma Globalization increases the
  demand for social insurance while simultaneously
  constraining the ability of governments to
  respond effectively to that demand
• The need for social insurance for the vast
  majority of the population that lacks
  international mobility has not diminished

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• In the market for goods, services. Labour, and
  capital, international trade creates arbitrage
• Child labour in Honduras replacing workers in
  South Carolina
• Trade usually redistributes income among
  industries, regions, and individuals questions
  of fairness and legitimacy
• Employers can move abroad but employees cannot
• A mistake wage levels and productivity
• Globalization greatly enhances the opportunities
  availbale to those who have the skills and
  mobility to flourish in world markets.
• A mistake wage levels and productivity

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• Globalization greatly enhances the opportunities
  availbale to those who have the skills and
  mobility to flourish in world markets.
• At the same time globalization does exert
  downward pressure on wages of underskilled
  workers in industrialized countries, exacerbate
  economic insecurity, call into question accepted
  social arrangements and weaken social safety
  nets.

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I.2. International Economics Unlocking the
Mysteries of Globalization

• The most notable features of the new world
  economy are the increasing links between the
  high- and low-income countries
• National economies are becoming more integrated
  in four fundamental ways trade, finance,
  production, and growing web of treaties and
  institutions
• It is now possible to divide up the value chain
• The enormous and increasing role of MNCs in
  global trade

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• Increasing harmonization of economic institutions
• Will globalization promote faster economic
  growth?
• Will globalization promote or undermine
  macroeconomic stability?
• Will globalization promote growing income
  inequality?
• How should governmental institutions adjust their
  powers?
• Long-term growth depends on increased
  productivity and innovation and that the
  incentives for both depend on the scope of the
  market

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• Gains in growth may not be shared by all
  geography and climate
• Pressures for rapid liberalization of
  international capital flows
• Less than 5 of the U.S. labour markets in
  apparel, footwear, toys, assembly operations, and
  the like a appears to be in the direct line of
  fire of low wages from Asia
• However, increased globalization limits the
  ability of union workers to achieve wage premium
• International trade may have changed the
  bargaining power of workers vis-à-vis capital

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• Globalization is supporting a new
  winner-take-all approach to labor markets.
  Skilled workers find an expanding market, while
  unskilled workers see no particular gains in an
  expanding market.

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I.3. Has Globalization Gone Too Far?

• Globalization had an impact on wage disparity and
  keeping wages low
• trade with LDcs is no more than one-third of U.S.
  total trade
• technological change and wages
• international trade operates by changing the
  elasticity of demand for labour
• As the corporations and capital become
  internationally more mobile, the tax base of
  nation-states tends to erode and therefore the
  ability of governments to finance social safety
  nets is to some extent compromised

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• Underlying technological trends leading to an
  increase in the demand for skilled labor and
  reducing the wages of the relatively unskilled
• trade is aggravating the downward movement in the
  relative wages of the least-fortunate workers in
  the economies of the advanced industrial
  countries
• trade expansion almost necessarily creates some
  losers in the economy
• we have to start by recognizing that, for trade
  to be a source of gains in terms of efficiency
  and growth form an economy it has to be
  associated with some destruction of jobs and some
  distributional consequences
• we need to rethink some of the mechanisms in the
  WTO that alllow for national safeguards

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I.4. Global Customerization of Markets has Arrived

• A company which maintains a single national
  allegiance and market orientation is employing a
  precarious strategic orientation
• World Market for goods and services
• GATT and WTO
• Trading Blocks encouraging firms to expand and
  devlop products
• Increase in cross-border acquisitions mergers
  exploiting the relative advantage which occur in
  each region

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• Use of satellite communications accelerated the
  awareness of product offerings
• Increasing expectation of consumers
• Developed economies are becoming more similar
• Developing countries still show a great deal of
  local variation
• Glocalization Strategies
• MNCs to remain competitive
• Redefine the concept of competitiveness by
  integrating the role firms market orientation
  and the role or power of the consumer in a market
• Allows for continue movement toward globalization

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• Develop a strategic map of countries
• Customer values and expectations become the
  driving force to the stage of globalization in
  each economy
• Emphasizes a specific strategy to create a
  reputation and unique value for the chosen
  customers
• MNCs must constantly redefine value buy
  continuously raising customers expectations
  toward their chose strategy
• Sustained success requires core business process
  to possess certain assets that continually
  enhance performance and value
• Customers continue to become more not less aware
  and sophisticated

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• New trends product customization, intimate
  customer relationship, reengineering, supply
  chain management
• No product or service is so good that it cannot
  be improved
• Change From a sellers market to a buyers
  market
• Responsiveness the firm that respond to customer
  needs the fastest have a clear advantage and tend
  to dominate the market
• Responsiveness excite customers fast to market
  (anticipate customers needs) fast to produce
  fast to deliver fast to service
• It is the customer!
• In a buyers market a customer-centric
  orientation is paramount

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• Customer buy more than a product, they buy
  utility or perceived value
• There is a need to be flexible to make
  adaptations
• Varying economic/cultural settings
• Mass customization products and processes are
  modularized to easily make change at customer
  preference points
• The future of an MNC does not depend on
  developing new customers but rather on keeping
  current customers and large purchases