GLOBALISATION

Or
INTERNATIONALISATION

-ANAND

What is Globalization?
Globalization is a process of
interaction & integration among the
people, companies, and governments
of different nations.

Major motives of Globalization

Proactive Motives Stimuli to attempt
strategy change
1. Profit and Growth goals
2. Managerial urge
3. Technology Competence/Unique
product
4. Foreign market opportunities/ Market
information
5. Economies of scale
6. Tax benefits

 Reactive Motives- Firms react to

pressure or threats in its domestic or
foreign market
1. Competitive pressures
2. Domestic market saturated
3. Over production/Excess capacity
4. Unsolicited foreign orders
5. Extend sales of seasonal products
6. Proximity to international
customers/Psychological distance

Factors to consider globalization

Information Technology
Cultural issues
Geographic location
Standardization v/s Customization

Globalization Planning Process

Phase 1- Preliminary analysis and
screening (Matching company and
country needs)
Phase 2- Adopting marketing mix to
target markets.
Phase 3- Developing the marketing
plan
Phase 4- Implementation and control

Barriers to entering global market

Protectionism.
Restrictions on trans border data
flows.
Protection of intellectual property.
Cultural barriers and adaptation.

Four cases of globalization of firm

Degree of internationalization of the market
Low
Degree
of
interna
tionaliz
ation of
firm

High

Lo
w

The early starter

The later starter

Hig
h

The lonely
international

The international
among others

 Advantages of Globalization
1. Resources of different countries are used for
producing goods and services they are able
to do most efficiently.
2. Consumers get the product they want at
more competitive prices.
3. Companies get access to much wider market.
4. Business and investors get much wider
opportunities for investment.
5. Much wider variety of products.
6. Promotes understanding and goodwill among
different countries.

 Disadvantages of globalization
1. Companies face much greater
competition.
2. Economic depression in one country
can trigger adverse reaction across
the globe.
3. Increase spread of communicable
diseases.

U
O
Y
K
N
A
TH