Globalization

Question 1

Why is “globalization” the super story of our time, and why is it important for every manager to understand globalization if their organization is to be successful.

Globalization is the increasing interconnectedness of people and places as a result of advances in transport, communication, and information technologies that cause political, economic, and cultural convergence. With this in mind you are in business to serve people, why should you just limit yourself to your domestic market. Every manager should understand that expanding ones options can possibly turn into profit. For example job globalization is very a viable option now. Moving some stages of the production process to foreign countries where labor can be hired at relatively low cost thanks to factors like technological advances, improvements in telecommunications, and trade deregulation. Also a mature product can start a completely different product cycle in another foreign market, allowing you to continue to produce at a profit and not spending as much money trying to pry away market share. Basically a manager should keep their options open and make sure that they don’t overlook the aspects of marketing elsewhere.

Question 2

Explain how you would select promising international markets, in general, for any organization that is considering expanding overseas?

There are many factors that one must consider when looking for an international market to pursue. One factor is the countries economic development, which gives you an idea what stage their countries economy is in. For example, some may use the Rostow Modernization model to help describe what stage a country is in. There is the Traditional, Transitional, Take-off, Drive to Maturity, and High Consumption stages. Depending on a countries economics make up you can determine if there may be a viable demand for you product or service. When considering the economic situation you should consider emerging markets with a lot of potential Latin America, South Africa, China and India. Another main factor is the countries Political & Legal environment, this can affect you from the startup and how you operate. You must consider the countries individual property rights, labor laws, trade policies, economic policies, internal and external conflicts that may affect your business, and even more so now the risk of terrorism. Depending on the industry trade barriers can play a big part in your decision. Each nation’s tariffs rate are different depending on different products too. Some countries may also require you to acquire certain licenses to run certain practices within their borders. The local culture is a very important thing to consider when doing business in a foreign country. All communication aspects are different, like how you greet people, bargain, and perform customer service.

Question 3

Explain how you would go about deciding on (a) selecting an international strategic ally and (b) where you would spend your organizations marketing resources once promising international markets have been selected.

a) While investing in an international market I believe that the type of strategic alliance that I would participate if I was established in another country is one where I would buy my supplies and raw materials locally.