Market Drivers. One of the primary drivers of globalisation has been in respect to market forces, whereby many consumer goods and services are now universally.
Globalization is a powerful result of the New World system. It represents one of the most influential forces in determining the future course of business. The term was first coined in the 1980’s. We define globalization as the democratizing of access to local market knowledge, customer information, services, products, and capital across national, cultural, and linguistic boundaries.
As Thomas Friedman writes in The Lexus and the Olive Tree: Understanding Globalization, this new period of globalization started in 1989 with the falling of the Berlin Wall. Before the falling of the Berlin Wall globalization was based on Capitalism vs. Three Key Drivers For Globalization First driver is the commoditization of the Information and Communication Technology (ICT) infrastructure, computers, software, and Internet. According to Friedman, “These technologies are able to weave the world together even tighter.” This deep global integration sets the stage for the second driver, the development of world trading systems and standards–leading to free trade, removal of barriers to trade, democratization of capital and investment barriers, and knowledge transfer. These two are now fueling the third driver, economic expansion of emerging markets and new business venturing.
Entrepreneurial Capitalism is expanding around the world. For example, The Global Entrepreneurship Monitor reports that there are more than 500 million adults actively involved in entrepreneurial activities around the world. China and India are two countries leading this pervasive adoption of free-market ideology and the introduction of free enterprise, entrepreneurial capitalism into their societies. In fact, there are more than 100 million entrepreneurs in each of these two countries. But for this entrepreneurial activity to create any such value, these emerging markets need laws clearly defining ownership and protection for tangible and intangible property rights. Entrepreneurial activity and innovation require strong property rights and rules defining the protection of intellectual property. It is clear that without strong forms of protection for property rights, many useful products would never be developed at all.
We have witnessed that such laws that reduce risk also fuel private equity investments, which in turn elevate economic productivity.
Available under. Yip identifies four sets of “industry globalization drivers” that underlie conditions in each industry that create the potential for that industry to become more global and, as a consequence, for the potential viability of a global approach to strategy.
Market drivers define how customer behavior distribution patterns evolve, including the degree to which customer needs converge around the world, customers procure on a global basis, worldwide channels of distribution develop, marketing platforms are transferable, and “lead” countries in which most innovation takes place can be identified.Cost globalization drivers—the opportunity for global scale or scope economics, experience effects, sourcing efficiencies reflecting differentials in costs between countries or regions, and technology advantages—shape the economics of the industry. Competitive drivers are defined by the actions of competing firms, such a s the extent to which competitors from different continents enter the fray, globalize their strategies and corporate capabilities, and create interdependence between geographical markets.Government drivers include such factors as favorable trade policies, a benign regulatory climate, and common product and technology standards.
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