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?

Globalization Drivers
Market Drivers
 Cost Drivers
 Government Drivers
 Competitive Drivers

Low
Multi-domestic
High
Global
Market Globalization Drivers
Common customer needs
 Global customers
 Global market channels
 Transferable marketing


Measures:
%
of WW sales attributed to standardized
products
Strength of Market Drivers
Aircraft
Computers
Automobiles
Soft Drinks
Toothpaste
Retail Banking
Book Publishing
Beer?
Baked Goods
Low
Multidomestic
High
Global
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
Strength of Cost Drivers
Pharmaceuticals
Aircraft
Computers
Automobiles
Toothpaste
Retail Banking
Baked Goods
Soft Drinks
Low
Multidomestic
High
Global
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
Strength of Government Drivers
Toothpaste
Baked Goods
Soft Drinks
Computers
Automobiles
Pharmaceuticals
Airlines
Retail Banking
Low
Multidomestic
Internet Commerce?
Genetically engineered foods?
High
Global
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
Strength of Competitive Drivers
Aircraft
Pharmaceuticals
Computers
Toothpaste
Automobiles
Soft Drinks
Retail Banking
Baked Goods
Low
Multidomestic
High
Global
Industry Globalization and Strategy
Multidomestic
Based on
Interest
Lever
Market
Participation
Global
Pursuit of
Global Share
Duplicate
Activities
Activity
Location
Follow Global
Driver
Tailored
Marketing
Standardize
Independent/
market-bymarket
Competitive
Moves
Interrelated/
Coordinated
Beer Industry and Globalization
Multidomestic
Driver
Market
Cost
Government
Competitive
Global
Mobile Phone Industry and
Globalization
Multidomestic
Driver
Market
Cost
Government
Competitive
Global
Managed Healthcare Industry
and Globalization
Multidomestic
Driver
Market
Cost
Government
Competitive
Global