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
Duplicate Activities
Tailored
Independent/ market-by-market

Lever
Market
Participation
Activity
Location
Marketing
Competitive
Moves

Global
Pursuit of Global
Share
Follow Global
Driver
Standardize
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