The term globalization derives from the word globalize, which refers to the emergence of an international network of economic systems. Globalisation refers to rapid increase in the share of economic activity taking place across national borders. It goes beyond the international trade includes goods and services, delivered &sold & movement of capital. Globalization or globalisation is the trend of increasing interaction between people or companies on a worldwide scale due to advances in transportation and communication technology, normally beginning with the steamship and the telegraph in the early to mid-1800s. With increased interactions between nation-states and individuals came the growth of international trade, ideas, and culture. Globalization is primarily an economic process of integration that has social and cultural aspects, but conflicts and diplomacy are also large parts of the history of globalization.

1. G LOBALISATION

2.  Along with decisions about positioning,
mergers, & acquisitions ,decisions about
global moves are among the most important
ones the strategists make.
 A firm that is considering doing business
abroad must have a rationale & logic for how
it can compensate for & overcome the
liabilities &disadvantages that arise from its
foreignness.

3.  Globalization is the increasing
interdependence, integration & interaction
among people and corporation in various
locations around the world.
 Interdependence is a dynamics of being
mutually responsible to and sharing common
ET of principles with others.

4.  Globalization refers to rapid increase in the
share of economic activity taking place
across national borders.
 It goes beyond the international trade
includes the way in which goods/services are
produced /created, delivered &sold &
movement of capital

5. DEFINITIONS
 A typical - but restrictive - definition can be
taken from the International Monetary Fund
which stresses the growing economic
interdependence of countries worldwide
through increasing volume and variety of
cross-border transactions in goods and
services, free international capital flows, and
more rapid and widespread diffusion of
technology.

6.  This goes beyond the international trade in
goods and includes the way those goods are
produced, the delivery and sale of services,
and the movement of capital.

7. THREAT OR OPPORTUNITY...
 Globalization can be a force for good. It has the
potential to generate wealth and improve living
standards. But it isn't doing that well at the moment.
 The benefits from increased trade, investment, and
technological innovation are not fairly distributed.
 The experience of the international trade union
movement suggests that the reality for the majority of
the world's population is that things are getting worse.
 Globalization as we know it is increasing the gap
between rich and poor. This is because the policies
that drive the globalization process are largely
focused on the needs of business.

8. KEY PLAYERS
 They are-
 Multinational firms which carry out business
across the national borders.
 The World Trade Organization
(WTO)THROUGH WHICH INTERNATIONAL
TRADE AGREEMENTS ARE NEGOTIATED&
ENFORCED
 The World Bank & International Monetary Fund
(IMF) are means to assist Govt .in achieving
development aims through the provision of
loans, technical assistance.

9. STAGES IN GLOBALISATION
 Domestic company links with dealer &
distributor.
 Company does the activities on its own.
 Company begins to carryout its own
manufacturing , marketing & sales in the foreign
markets.
 Company starts full fledged operations including
business systems and R&D. At this stage the
managers are expected to perform the tasks
which they were doing in domestic markets to
replicate them in foreign markets.

10. CONDITIONS FOR GLOBALIZATION
 Business Freedom-No unnecessary
Government restrictions like restriction,
restrictions on sourcing of funds and other
factors from abroad. Hence the liberalization is
the 1st step towards facilitating globalization.
 Facilitators-Infrastructure facilitation available at
home country an help entrepreneurs go globally.
 Government support –Government support
available in the form of policy & procedure
reform encourage globalization.

11.  Resources-Resources is an important factor
which decides the ability of affirm to globalize.
 They include finance ,technology, brand image,
company’s image, managerial expertise etc.
 Competitors- This is an important factor which
company’s success in global market bank on.
 The factors like low costs& price, product
quality, product differentiation, technological
superiority.
 After sales service, market strengths etc are few
to name.

12. REASONS FOR GLOBALIZATION
 Firm operate internationally for a number of reasons:
 They may be seeking to secure better sources of raw
materials & energy.
 They may want to obtain access to low cost factors of
production such as labour.
 They may be attracted to certain countries because
of subsidies those countries provide.
 They may be seeking new markets for their products.
 Domestic markets may no longer be able to absorb
production at minimum efficient scale.

13. CONTD…
 They may be motivated by life style factors.
Domestic markets become saturated .As
they mature , firms look abroad for new
opportunities.
 They may be seeking opportunities for
economies of scope & for learning.

14. SO WHY GO ‘GLOBAL’?
 Competition within your national market is
becoming too intense so you decide to push
sales in overseas markets.
 Your products within your national markets
are reaching the end of the lifecycle so you
wish to push it into international markets.
 Sales and profit are generally declining in
national markets.
 You wish to become a global player.

15. THE DIFFERENCE BETWEEN COMPETING
INTERNATIONALLY & COMPETING GLOBALLY
 A company will start to compete
internationally by entering just one or maybe
a select few foreign markets. Competing on a
truly global scale comes later , after a
company has established operations on
several continents & is racing against rivals
for global market leadership.

16.  There is a meaningful difference between the
competitive scope of a company that
operates in a few foreign countries &
company that markets its products in 50-100
countries & expanding its operations into
additional country markets annually.
 Former is termed as International Competitor
while the later qualifies as a Global
Competitor.

17. ENTERING GLOBAL MARKETS:
 There are a number of steps that need to be
taken before you decide to enter international
markets.
 Analyze the international marketing
environment. A PEST/STEP analysis needs
to be conducted on the market you enter, to
assess whether it is worthwhile or not.

18. POLITICAL FACTORS
 Consider:
 The political stability of the nation. Is it a
democracy, communist, or dictatorial regime?
 Monetary regulations. Will the seller be paid
in a currency that they value or will payments
only be accepted in the host nation
currency?

19. ECONOMICAL FACTORS
 Consider:
 Consumer wealth and expenditure within the
country.
 National interests and inflation rate.
 Are quotas imposed on your product.
 Are there import tariffs imposed.
 Does the government offer subsidies to national
players that make it difficult for you to compete?

20. SOCIAL FACTORS
 Consider
 Language. Will language be a barrier to communication
for you? Does your host nation speak your national
language? What is the meaning of your brand name in
your host country’s language?
 Customs: what customs do you have to be aware of
within the country? This is important. You need to make
sure you do not offend while communicating your
message.
 Social factors: What are the role of women and family
within society?
 Religion: How does religion affect behavior?
 Values: what are the values and attitudes of individuals
within the market?

21. TECHNOLOGICAL FACTORS
 Consider:
 The technological infrastructure of the
market.
 Do all homes have access to energy
(electricity)
 Is there an Internet infrastructure. Does this
infrastructure support broadband or dial up?
 Will your systems easily integrate with your
host country’s?

22. MARKET ENTRY METHODS
 After assessing the environment in your selected
country, how do you decide which are the best
countries to enter? Following factors to be considered
before entering-
 Speed – How quickly do you wish to enter your
selected market?
 Costs- What is the cost of entering that market?
 Flexibility – How easy is it to enter/leave your chosen
 market?
 Risk Factor – What is the political risk of entering the
market? What are the competitive risk? How
competitive is the market?

23.  Payback period – When do you wish to
obtain a return from entering the market? Are
there pressures to break even and return a
profit within a certain period?
 Long- term objectives- What does the
organization wish to achieve in the long term
by operating in the foreign market? Will they
establish a presence in that market and then
move onto others?

24. TRADING OVERSEAS
 There are a number ways an organization can
start to sell their products in international
markets.
1. Direct export.
 The organization produces their product in their
home market and then sells them to customers
overseas.
 2. Indirect export
 The organizations sell their product to a third
party who then sells it on within the foreign
market.

25.  3. Licensing:
 Another less risky market entry method is
licensing. Here the Licensor will grant an
organization in the foreign market a license
to produce the product, use the brand name
etc in return that they will receive a royalty
payment.

26.  Franchising
 Franchising is another form of licensing. Here
the organization puts together a package of the
‘successful’ ingredients that made them a
success in their home market and then
franchise this package to overseas investors.
The Franchise holder may help out by providing
training and marketing the services or product.
 McDonalds is a popular example of a
Franchising option for expanding in international
markets.

27.  Contracting
 Another of form on market entry in an
overseas market which involves the
exchange of ideas is contracting. The
manufacturer of the product will contract out
the production of the product to another
organization to produce the product on their
behalf. Clearly contracting out saves the
organization exporting to the foreign market.

28.  Manufacturing abroad
 The ultimate decision to sell abroad is the
decision to establish a manufacturing plant in
the host country. The government of the host
country may give the organization some form
of tax advantage because they wish to attract
inward investment to help create
employment for their economy.

29.  Joint Venture
 To share the risk of market entry into a
foreign market, two organizations may come
together to form a company to operate in the
host country. The two companies may share
knowledge and expertise to assist them in
the development of company; of course
profits will have to be shared out also.

30. THE INTERNATIONAL MARKETING MIX
 When launching a product into foreign
markets do you standardize or adapt your
marketing mix to the foreign market? A
company can adopt to use a standardized
marketing mix around the world or an
adapted marketing mix in each country.

31. INTERNATIONAL PRODUCT STRATEGIES
STANDARDIZATION VS ADAPTION
 Basic marketing concepts tell us that we will
sell more of a product if we aim to meet the
needs of our target market. In international
markets, we have to take into consideration
consumer’s cultural background, buying
habits, levels of personal disposable income
etc in order to deliver a tailored marketing
mix program to suit their needs.

32.  In today’s global world, where consumers travel
more, watch satellite television, communicate
and shop internationally over the internet, the
world now is becoming a lot smaller. Because of
this there is no need to adapt products to local
markets.
 Brands such as Coca-Cola, MTV, Nike, Levis
are all successful global brands where they
have a standardized approach to their
marketing mix, all these products are targeted at
similar groups globally.

33.  In many circumstances a company will have to adapt
their product and marketing mix strategy to meet local
needs and wants that cannot be changed.
 McDonald is a global player however, their burgers
are adapted to local needs. In India where a cow is a
sacred animal their burgers are served with chicken
or fish.
 Coca-cola is some parts of the world taste sweeter
then in others. Yes we can argue that standardization
is better for the organization because it reduces cost,
however many organizations will have to ‘think global,
but act local’ if they are to successfully establish them
selves in foreign markets

34. TYPES OF INTERNATIONAL STRATEGY
International
Strategy
Multi
Country
Global

35.  Multi country competition strategy varies
somewhat across nations, since
 Buyers in different countries are attracted to
different product attributes.
 Sellers vary from country to country.
 Industry conditions & competitive forces in
each national market differ in important
aspects.

36. MULTI COUNTRY STRATEGY
 Product customized for each market.
 Decentralized control—Local decision making.
 Effective when large difference exists between
the countries.
 Advantageous product differentiation, local
responsiveness, minimal political risk.
 With multi country competition , rival firms battle
for national leadership & winning in one country
does not necessarily signals the ability to fare
well in other countries.

37.  Global strategy involves consistent strategy
for each country which includes,-
 Integrating & coordinating the company's
strategic moves worldwide.
 Selling in many if not all nations where there
is significant buyer demand.

38.  Global strategy
 Product is same in countries.
 Centralized control
 Effective when the difference between the
countries is small.
 Advantage cost, coordinated activities, fast in
product development

39. INTERNATIONAL PROMOTION STRATEGY
 As with international product decisions and organization can
either adapt or standardize their promotional strategy and
message.
 Advertising messages in countries may well have to be adapted
because of language barriers or the current message used in the
national market may be offensive to overseas residents.
 The use of certain colours may also need to be thought about. In
India red is the colour worn by the bride in weddings, white is the
colour for mourning in Japan.
 The level of media development has to also be taken into
account. Is commercial television well established in your host
country? What is the level of television penetration? How much
control does the government have over advertising on TV and
radio? Is print media more popular then TV? Many organization
go for a strategy of adapting advertising messages to local
markets to best meet consumer demand.