UNIT 2 GLOBALIZATION
NAME:____________________________________________ MOD.________________
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Describe the process of globalization and how it affects markets and production
Identify the two forces causing globalization to increase
Summarize the evidence for each main argument in the globalization debate
Summarize the globalization debate
Identify the types of companies that participate in international business
Describe the global business environment and identify its four main elements
OBJECTIVES
McDonalds has become the symbol of ______________________________ and the spread
of the ______________________________. How big is McDonalds? Countries _______;
Customers ______, Worldwide restaurants________; Employees _________. In every
continent except ____________.
MULTINATIONALS
More focus on ___________ their _____________ and _______________
to each individual ________________ market. Do not have ___________
product offerings in each country.
FDI
____________________________. in other countries.
Globalization has affected every aspect of life in almost every nation.
To McDonalds it is a ________________ policy to ______ to the _______
expectations of local workers.
TRADEMARK
Symbols by which _________________________ are ________________
marketed in the ________________________.
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Why McDonalds has an local strategy for each country
alongside its clear global strategy: (video)—5 reasons
1._________________________________________________
2. _________________________________________________
3. _________________________________________________
4. _________________________________________________
5. _________________________________________________
GLOBALIZATION
Trend toward greater ___________________________________
_________________ among national institutions and economies
GLOBALIZATION
OF MARKETS
_______________ and ______________ of businesses to all over the
world to reach the needs of the _________ internationally.
simply put: when big markets have emerged into one single market due
to customer's needs and demands.
GLOBALIZATION
OF PRODUCTION
World has become the global village and producers can get benefit from
different culture and cheap labor all around the world.
INTERDEPENDENCE
Relationship between members so that each is _________ ________
on each other
GLOBAL MARKETS
1) __________________ marketing costs because
companies have __________________________ to markets
2) ___________ _______ market opportunities especially if home market
Is ___________________ or _____________________.
3) _____________ income streams important if selling _____________
___________________.
Money flowing ________ and ___________ of a company.
INCOME STREAM
GROUPON
Business model copied by companies in over 50 countries. New Strategy
(handout) :BUILDING BY PARTNERING which is what?
___________________________________________________________
Advantageous to Groupon because?______________________________
1)
2)
TECHNICAL
EXPERTISE
3)
BENEFITS OF GLOBAL PRODUCTION
Lower-cost labor cuts _______________________________
Technical Expertise
(HANDOUT) To build up your skills and become a technical expertise
a)_______________________ b)______________________________
c)________________________
How to take action:
a)______________________________________________
b)______________________________________________
c)______________________________________________
Production inputs which requires access to __________from abroad
because they may be more __________ at _______
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CHALLENGES OF
GLOBAL MARKETING `
ADVICE TO GLOBAL
MANAGERS
1) ___________________ consumer response
2) __________________ differences over _____________
_________________ development
3) Differences in _________ & __________ influences by regional
background.
1)
Know your ___________________ Understand how
People think, work, eat, and interact in foreign workplace
2)
Emphasize __________________ awareness. Successful managers need to
understand the similarities/differences across national boundaries, to be
aware of opportunities and deal with the potential downfalls.
3) Develop __________________ products. Know your market
Ex: Japanese women—sophisticated, spent more money on
cosmetics than anyone in the world.
Proctor & Gamble created skin care product @ $120/bottle
4) Market ___________________.EX: Mary Kay Cosmetics
Not allowed to see door-to-door in Japan. Introduced
Midrange products and sold in Chinese department stores.
5) Improve ____________________ (movement of people, products from
one place to another via: rail, plane, ship; warehousing)
6) Analyzing ______________ correctly. Key: Have a good understanding
of problem before you try and solve it.
Ill-defined problems result in ill-defined solutions
GLOBAL CHALLENGES
MANAGING SECURITY
1) Physical security – Examine ___________________________ and
create ___________________________________________.
2) Digital security – Guard _______________________________ and
_________________________________________________
3) Reputational risks – require __________________ and ___________
behavior from all ________________ and _____________________
ETHICS
Being ethical involves doing the ____________________________,
Regardless of what ______________________ might be gained.
Leads to _______________________ in global markets and increased
_________________________ and ______________________
Based on parties trusting one another.
HOW IMPORTANT IS ETHICS IN THE WORKPLACE?
IT TAKES 20 YEARS
TO BUILD A REPUTATION
AND
FIVE MINUTES TO RUIN IT
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MAIN DRIVERS
OF
GLOBALIZATION
_____________________ - General Agreement on Tariffs & Trade
-- promotes __________________ by __________________
and _________________________________ such as:
_________________________________________
___________________ - World Trade Organization
-- regulates ________________________________________
-- settles ____________________________ among nations
__________________ - Regional Trade Agreements. Also referred to as FTA
(free trade agreements)
---Agreement between 2 or more countries that affect trade in
_____________________________________, intellectual property
protection.
--- Reduce ________________ to U.S. _____________,
---_______________ U.S. interests
--- Builds off WTO negotiated agreements
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SECOND DRIVERS
OF
GLOBALIZATION
E-mail/videoconferencing speeds information across borders
Internet sharpen forecasting, lower inventories and costs, and improve
communication with distant managers.
Intranet gives employees access to company information from distant locations
while on business travel.
Extranet give customers and suppliers access to a company’s database to place
orders or restock inventories electronically and automatically.
Advancements in transportation technologies (such as global positioning satellite,
or GPS, technology) are making global shipping more efficient and
dependable.
MEASURING GLOBALIZATION
Globalization Index
1 Belgium
2 Austria
3 Netherlands
4 Sweden
5 Switzerland
6 Denmark
7 France
8 Hungary
9 Portugal
10 Ireland
27 United States
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2011 KOF Index of Globalization TEN TOP COUNTRIES BY RANKING
Economic Globalization
Social Globalization
92.6 1 Singapore
96.8 1 Switzerland
92.36
91.67 2 Luxembourg
93.11 2 Austria
91.74
91.17 3 Ireland
92.93 3 Belgium
90.43
89.26 4 Malta
91.98 4 Canada
89.46
88.98 5 Belgium
90.95 5 Netherlands
88.91
88.96 6 Netherlands
90.72 6 Denmark
87.72
87.65 7 Hungary
89.82 7 United Kingdom 87.16
87.62 8 Estonia
89.2 8 France
86.3
87.28 9 Bahrain
88.49 9 Sweden
85.8
86.45 10 Sweden
87.9 10 Slovak Republic
85.41
79.84 50 United States 71.64 75 United States
78.36
Political Globalization
1 France
98.43
2 Italy
98.37
3 Belgium
98.13
4 Austria
97.37
5 Spain
96.62
6 Sweden
96.3
7 Netherlands 95.11
8 Portugal
95.08
9 Poland
94.9
10 Canada
94.64
15 United States 93.6
economic globalization, characterized as long distance flows of goods, capital and services as well
as information and perceptions that accompany market exchanges;
♦ social globalization, expressed as the spread of ideas, information, images and people.
political globalization, characterized by a diffusion of government policies; and
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JOBS &
WAGES
Opponents: Globalization ______________ jobs in developed nations
______________ wages in developed nations
______________ workers in developing nations
Supporters: Globalization increases _____________ and ___________ everywhere
Generates labor market ______________ in developed
Countries
Advances economies of _______________ nations
ENVIRONMENT
LABOR
MARKETS
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OPEN ECONOMY
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Opponents: Globalization __________labor standards
__________ protection of _____________
__________ workers in ___________ nations
Supporters:
__________raises labor standards
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__________economies most environment friendly
economy in which there are economic activities between
________________ and________________ -- mostly environment friendly
Companies concerned for future markets
INEQUALITY
WITHIN
NATIONS
Developed countries _______________________________________________
Developing countries: ______________________________________________
Newly Industrialized countries__________________________________________
Underdeveloped countries:__________________________________________
INEQUALITY
BETWEEN
NATIONS
Nations open to world trade and investment grow faster than rich nations
Emerging economies (China & India) have grown big & strong to thrive
independently while U.S. & other rich countries continue to struggle.
In what country does the richest 10 percent earn an average of $93,000 — the
highest level in the OECD. The poorest 10 percent earn an average of $5,800 —
about 20 percent lower than the OECD average. ___________________
GLOBAL
Opponents: there is a widening income inequality between all people of the world.
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INEQUALITY
Supporters: Studies show inequality has fallen—to create equality, net transfer of
resources from richest 5% of population to 40% of the world that lives on $2 a day.
IMPACT ON
CULTURE
Opponents – Destroys ____________ diversity
___________________ our world which means
__________________________
______________________ local small businesses
Supporters - __________________ and _________ to obtain other goods
____________________________ from other nations
________________ deeper ________and _________ norms
HOW THEY
STACK UP:
MNC power:
(1)
Sales and net profit figures for some multinationals are higher than GNPs of
developing countries, (annual sales of Shell are roughly £68billion, which is
two and half times the income of Nigeria's 110 million people )
(2)
Coca-Cola advertisements are being shown 560 million times a day,
everyday in 160 countries, while majority of world population does
not know where Fiji is.
BUT
1) MNCs are a major source of foreign investment, which is believed to bring higher
growth rates for the developing countries; thus the dependency on MNC’s
economically and the reason why MNC’s through FDI have gained a small share
in the political power as well.
2) Developing countries need to seduce the multinationals, governments are
automatically made to follow those policies that will favor these firms and will
create suitable financial as well as legal environments for them. Also due to high
corruption records in the developing states, multinationals are able and sometimes
do obtain various favorable changes
3) Financial markets could not exist without governments, and are subject to whatever
rules and restrictions that states may impose upon them" .
4) Thus, the interdependency that exists between the states and MNCs
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