Globalization

Globalization (or globalisation) describes the process by which regional economies, societies, and cultures have become integrated through a global network of political ideas through communication, transportation, and trade (Wikipedia).

Ten Drivers ('Flatteners' Friedman)

  1. Collapse of the Berlin Wall
    1. World Trade Organization (WTO)
    2. North American Free Trade Agreement (NAFTA)
    3. European Union (EU)
  2. Netscape (the Internet)
  3. Workflow software (collaboration software)
  4. Uploading (online projects)
  5. Outsourcing
  6. Offshoring
    1. Reduce costs (labor, taxes, tariffs...)
    2. Improve the supply chain
    3. Provide better goods and services
    4. Understand markets
    5. Learn to improve operations
    6. Attract and retain global talent
  7. Supply chaining
  8. Insourcing
  9. Informing (Google and search engines)
  10. The Steroids (wireless, VOIP, file sharing)

International Strategy

Companies typically pursue international business through one of four options:
  1. International strategy - uses exports and licenses
  2. Multi-domestic strategy - maximize local responsiveness by customizing both their product offering and marketing strategy to match different national conditions (Wikipedia).
  3. Transnational strategy - material, people and ideas cross (transgress) national boundaries. Attempts to combine benefits of global scale efficiencies with benefits of local responsivness (Heizer & Render, Wikipedia).
  4. Global Strategy - selling a standardized global product to provide standardization, learning and economies of scale (Wikipedia).

References

  • Heizer & Render (2011). Principles of Operations Management, 8th edition, Prentice Hall, Upper Saddle River, NJ.
  • Wikipedia: The free encyclopedia. FL: Wikimedia Foundation, Inc. Retrieved May 14, 2012, from http://www.wikipedia.org