globalization

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page director: Brian D. Butler

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  1. Globalization
  2. Not "Americanization"
  3. Anti-Globalization Movement
  4. Localization
    1. How much "localization" is necessary?
  5. Positive effects of Globalization
  6. Globalization, Trade and FDI
  7. Links
  8. Measuring Globalization
  9. Wikipedia Definition
  10. External Links
  11. Links from KookyPlan

 

   see also:  international marketing , Localization

 

Globalization

 

During the long march toward globalization, international borders and trade barriers came down. Communism fell. Protectionist walls in Latin America and elsewhere were dismantled. Governments -- long prone to meddling in trade -- took a back seat to broader market forces.  In a globalization manifesto, New York Times columnist Thomas Friedman declared that the Internet and other planet-spanning technologies were erasing national boundaries. The world, he said in a 2005 best seller, was flat.

 

Yes, its a bit cliche to say that "globalization" is a trend, but the importance of competing globally can not be understated.  As we look at the industry analysis we notice that some industries are much more globally competitive and need to be due to massive economies of scale advantage that can be obtained from Marketing products globally.  Such industries as computer manufacture where the products are standardized are prime candidates for global competition.  But, rising oil prices, and falling dollar values are important shift that make competing globally an ever changing game. 

 

Changes in regulations and trade barriers, are things that can significantly alter comparative advantages globally overnight.  As travel costs have fallen, communication costs have fallen and the world has become more technologically integrated, we see new opportunities for even small companies to compete globally.  But, on the other hand, we also see company after company failing in global competition because they still think too US, or European-centric, and thus give up global market share to the "clones", or copy cat business models that pop up around the globe.  See our discussion about troubles going global (business)

 

 

Not "Americanization"

 

Note that globalization does not equal "americanization" ... proof is that there are just as many sushi restaurants as Mc Donalds, and what about Jackie Chan kung fu movies from Hong Kong might have as much global recognition as any American movement.

 

 

Anti-Globalization Movement

 

Many of the criticisms against the "Washington consensus" have come from the anti-globalizaion movement. 

 

 

Localization

 

this is a counter trend in retailing, in which consumers are resisting globalization by going to the other extreme: localization, in which products are just sourced locally, grown locally, produced locally...and consumers are drawn to the appeal of local industry (and are willing to pay more, and have slightly less choice for the privilege of supporting home-grown artists, farmers, and producers). 

 

 

 

How much "localization" is necessary?

 

Luxury goods are one of the few truly "global" brands that are able to gain from global efficiency in marketing and producing the product exactly the same in any market that they enter.  Without needing to tailorize (Localization) the products to meet local tastes, the companies are able to significantly save money on local costs.  But, very few products are truly able to do so.  Think Rolex.  note that even Mercedez Benz is forced to localize. 

 

 

 

 

Positive effects of Globalization

 

The lack of globalization has been a negative force in history.

 

The lack of globalization led Scotland to underdevelop during the rensissance, which was occuring just miles away, but unaware. 

 

Globalization, Trade and FDI

 

Global economic expansion over the last three decades has been remarkable. While nominal world GDP has increased four times, world trade flows have grown more than six-fold, and the stock of foreign direct investment (FDI) has grown by roughly 20 times since 1980. The sources of global trade and investment growth are well known—general economic expansion, policy liberalization, and better communications and technology

 

 

Links

 

see also:  Marketing,  strategy , Exports , Import Export business models,  export subsidy , Competitive Advantage,   strategy  , barriers to innovation ,  market entry ,   Spain market entry for cachaca , barriers to entry  , 5 forces analysis

 

 

 

 

Measuring Globalization

 

A.T. Kearney and Foreign Policy Magazine jointly publish another Globalization Index. According to the 2006 index, Singapore, Ireland, Switzerland, the U.S., the Netherlands, Canada and Denmark are the most globalised, while Egypt, Indonesia, India and Iran are the least globalised among countries listed.

 

 

 

Wikipedia Definition

 

Globalization became a business phenomenon in the 17th century when the Dutch East India Company, which is often described as the first multinational corporation, was established. Because of the high risks involved with international trade, the Dutch East India Company became the first company in the world to share risk and enable joint ownership through the issuing of shares: an important driver for globalization.

 

Liberalization in the 19th century is sometimes called "The First Era of Globalization", a period characterized by rapid growth in international trade and investment, between the European imperial powers, their colonies, and, later, the United States. It was in this period that areas of sub-saharan Africa and the Island Pacific were incorporated into the world system. The "First Era of Globalization" began to break down at the beginning with the first World War, and later collapsed during the gold standard crisis in the late 1920s and early 1930s.

 

Globalization in the era since World War II was first the result of planning by economists, business interests, and politicians who recognized the costs associated with protectionism and declining international economic integration. Their work led to the Bretton Woods conference and the founding of several international institutions intended to oversee the renewed processes of globalization, promoting growth and managing adverse consequences. These were the International Bank for Reconstruction and Development (the World Bank) and the International Monetary Fund. It has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of GATT, which led to a series of agreements to remove restrictions on free trade. The Uruguay round (1984 to 1995) led to a treaty to create the World Trade Organization (WTO), to mediate trade disputes and set up a uniform platform of trading. Other bi- and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade. Globalization in the era since World War II was first the result of planning by economists, business interests, and politicians who recognized the costs associated with protectionism and declining international economic integration. Their work led to the Bretton Woods conference and the founding of several international institutions intended to oversee the renewed processes of globalization, promoting growth and managing adverse consequences. These were the International Bank for Reconstruction and Development (the World Bank) and the International Monetary Fund. It has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of GATT, which led to a series of agreements to remove restrictions on free trade. The Uruguay round (1984 to 1995) led to a treaty to create the World Trade Organization (WTO), to mediate trade disputes and set up a uniform platform of trading. Other bi- and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.

 

 

 

 

 

 

External Links

 

http://en.wikipedia.org/wiki/Globalization

 

 

 

 

Links from KookyPlan

 

  • Doha trade round [edit] Delivering on Doha: Farm Trade and the Poor by Kimberly Ann Elliott
  • TRIPS [edit] From Wikipedia: The Agreement on Trade Related Aspects of Intellect
  • WTO [edit] ! WTO an international organization designed to supervise and liberalize inte

 

 

 

 

 

 

 

 

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