Becoming one "global village"
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Description
Technological advances in transportation, shipping and communication have made it easier for companies to market in other countries and easier for consumers to buy products and services from marketers in other countries. Globalization is about how people become more intertwined with each other around the world economically, politically and culturally.
Some advantages of going global are global-scale efficiency, access low-cost factors, global scanning & learning and competitive postioning (e.g. cross-subsidization of markets).
Enablers
- Several advances: Modern communication (with ICT), transportation and legal advances as well as the political choice to consciously open borders makes globalization more and more attractive.
- Emerging markets: Big markets like China, India and Brazil are getting closer to “the global village”.
- Pro-globalization: promoting the advantages of globalization.
Inhibitors
- Cultural differences: Nationality plays an important role in shaping the assumptions, beliefs and values of individuals.
- Antiglobalization movements: Groups with different agenda’s, but united in their concern that liberalization will be beneficial for multinational corporations and will be at the cost of people and businesses in less-developed parts of the world.
- Local government demands: These have been the most severe constraint to global strategies of many companies. Underlying cause is the fact that goverments and global operating companies do have different objectives and motivations. For instance, local governments mainly care employment, import substitution and regional development.
Paradigms
- “The world is becoming a common market place in which people – no matter where they live, desire the same products and lifestyles.” (Theodore Levitt, Harvard University) More concrete: The world is transforming into a “homocultural” market place where all customers can be informed/persuaded by the same advertisements.
- The opposite paradigm is: people in different cultures around the world have different perceptions, habits et cetera and need to be treated in different ways.
Experts
- C.A. Bartlett, S. Ghoshal and J. Birkinshaw (authors “Transnational Management”)
- P. Kotler and K. Lane (authors “Marketing Management”)
Timing
Started in the 20th century. Will continue for the coming years, although for instance political difficulties (e.g. Middle-East, Korea) probably will inhibit the process.