International Business Environment & Strategy

Drivers of Globalisation June 2010

Slides based on Yip, G. (1995):- Johnson, Scholes & Whittington (2005)

“Exploring Corporate Strategy”, 7th edition

Robert Jones © 2010

What is globalisation?

Causes?

Effects?

Pros & cons?

Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

Drivers of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

Drivers of globalisation

Global market convergence

Global market convergence

Similar customer needs e.g. Personal computers Mobile phones i-Pod

Global customers Europe Americas Asia Africa

Transferable marketing Global marketing Local adaptation – especially with car models

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

Drivers of globalisation

Cost advantages

Global market convergence

Employees at a call centre in the southern Indian city of Bangalore.

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

Drivers of globalisation

Cost advantages

Global market convergence

Global competition

Global competition

Interdependence Global alliances – car industry - airlines - electronics

Competitors global Top firms have #1 / #2 market shares in many nations Global car makers

High exports / imports Many electronic products are made in China Shoes are made in Vietnam “Home” markets are disappearing

Is my Toyota Corolla a Japanese car or………?

A global airline alliance:-

Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

Drivers of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Government influence

Trade policies Falling barriers to trade Liberalisation & deregulation WTO / EU and trading bloc policies

Technical standards ISO replaces national standards (BS, DIN, ASA) Computer software is international Safety & quality standards:- Pharmaceutical, aviation, automobile sectors

Host government policies Sensitivity is needed National differences still exist

7th Session of the WTO Ministerial Conference in Geneva 30 November to 2 December 2009

Argentina Australia Brazil Canada China France Germany India Indonesia Italy Japan Mexico Russia Saudi Arabia South Africa Republic of Korea Turkey United Kingdom United States of America

Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

Drivers of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

How do these Drivers of Globalisation affect us?

Think of the 4 Cs:-

Competition is increasing

Costs must be reduced constantly

Customers are ever more demanding

Country differences are still important

R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall

Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

The 4 Cs of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Country

Customer

Cost

Competition

Sources of Culture

Language/s Nationality Education Profession Ethnic group Religion Family Sex Social class Corporate or organisational culture

Culture

Based on Usunier (2000) Marketing Across Cultures, Pearson Education Ltd

Sources of Culture

R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall

Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

The 5 Cs of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Country

Customer

Cost

Competition

Culture

R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall

Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

The 6 Cs of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Country

Customer

Cost

Competition

Culture Converging technologies, E-business

R Jones (2006) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall

Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

The 6 Cs of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Country

Customer

Cost

Competition

Culture Converging technologies, E-business

http://www.bankofengland.co.uk/monetarypolicy/assetpurchases.htm

© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall

Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

More Cs of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Country

Customer

Cost

Competition

Culture Converging technologies, E-business

Credit crunch Currency

© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall

Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

More Cs of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Country

Customer

Cost

Competition

Culture Converging technologies, E-business

Credit crunch Currency

Collaboration

Common platform

http://unfccc.int/essential_background/feeling_the_heat/items/3157.php

© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall

Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

More Cs of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Country

Customer

Cost

Competition

Culture Converging technologies, E-business

Credit crunch Currency

Climate change CO2

Collaboration

Common platform

© R Jones (2009) - Based on Johnson, Scholes & Whittington (2006) Exploring Corporate Strategy, FT Prentice Hall

Based on G. Yip, Total Global Strategy, Prentice Hall, 1995, chapter 2

•  Trade policies •  Technical standards • Host government

policies

Global strategies

• Similar customer needs • Global customers •  Transferable marketing

•  Interdependence • Competitors global • High exports / imports

More Cs of globalisation

Government influence

Cost advantages

Global market convergence

Global competition

Country

Customer

Cost

Competition

Culture Converging technologies, E-business

Credit crunch Currency

Climate change CO2

Collaboration

Common platform

Copenhagen