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Global Strategy Managing For The 21St Century (стр. 3 из 4)

rules of world trade. First, it began the process of opening up the most heavily

protected industries, agriculture and textiles (IMF, 1999). Second, it vastly extended the

scope of international trade rules, now covering services as well as goods. New issues,

such as foreigners’ “intellectual property” like patents and copyrights, were addressed

for the first time and services can now be traded internationally (IMF, 1999). As a

result of the GATT/WTO negotiations and unilateral decisions, almost all countries

have lowered barriers to foreign trade. Although liberalization has proceeded at

different speeds in different places, the trend is worldwide. Over the past decade, trade

has increased twice as fast as output, foreign direct investment three times as fast and

cross-border trade in shares ten times as fast (WTO, 1998). This development

suggests that the world economy becomes more integrated (WTO, 1998). Apparently,

the gap between export growth and GDP growth has further enlarged in the recent

past, which can be understood as an increase in the speed of globalization (Eiteman,

1999).

With the costs of communication and computing decreasing rapidly, the natural

barriers of time and space that separate national markets have been falling as well.

The cost of a three-minute telephone call between New York and London for example,

has decreased from 3 dollars (in constant prices from 1996) in 1930 to less than 1

dollar today (World Bank, 1997). The cost of computer processing power has dropped

by an average of 30% a year in real terms over the past couple of decades (World

Bank, 1997). In Information technology, the world has experienced a revolution. The

web represents a world wide information network. In 1998, 180 million Internet

workstations provided a worldwide network and Andy Grove of Intel believes that there

may be 500 million in another five years (Shepherd, 1999). The dimension can be

illustrated by some examples: Global stars as IBM and Microsoft are increasingly

focusing on the Internet business, and Reuters set up a new global ventures group to

pursue Internet investments (Shepherd, 1999). Cable & Wireless bought MCI’s US

Internet business for 1.75 billion dollars, then acquired a German and a Taiwan Internet

provider and hiked its three year budget by 3.3 billion dollars to build a global Internet

protocol network for multinationals (Shepherd, 1999). E-commerce is predicted to

become one of the most important market grounds of the next millennium and “all the

world’s businesses spend more on telecommunications each year than they do on oil”.

(Maass, 1997).

Another important factor for an increased globalization process is to be seen in

the plunge of traditional costs of covering distances by land, sea and air. They have

been reduced to approximately one fifth since the twenties and thirties respectively.

The “death of distance”, as Cairncross (1997) called it, facilitates the establishment and

monitoring of international production networks, enlarges trading areas, and enables

firms to exploit international cost differentials by the fragmentation and relocation of

production and global sourcing (Cairncross, 1997). Furthermore, the development of

high tech and telecommunication facilities together with the massive decrease of prices

for information sharing and transport can be seen as a dominant force of the

globalization process.

When comparing different regions in our world one will encounter completely

different opinions, languages, gestures, habits, rituals, behavioral patterns and so on.

As culture is about values and values are partly unconscious, acquired in early

childhood and then further developed, confirmed and reinforced later on, they are

hardly discussible and will not change quickly (Hofstede,1996). Therefore one might

argue that no globalization of culture is evident. However, there are tendencies

towards a “global culture”. The increasingly global media and entertainment industry

including cross-border satellite television broadcasting and almost “global”

TV-channels like CNN have an integrating effect on cultural diversity (Hofstede, 1996).

In most corners of the world for example, the name of Mickey Mouse will elicit at least a

glimmer of recognition. Walt Disney’s most famous creation was one of the first stars

with a global name, showing that there is a kind of convergence in consumer lifestyle

and behavior.

Signs of Globalization

Multinational corporations operate all over the world in ways never before

imagined. With operations in 100 or more countries, selling products in as many as 200

countries, global players gain revenues larger than most countries’ GDP (Shepherd,

1999). Corporate management can share best practices within seconds with modern

telecommunication from New York to Bangkok or have troubleshooting teams fly within

hours from Buenos Aires to Seoul. (Shepherd 1999) In order to enhance their

operational efficiency and profitability along the entire industrial chain many

corporations have adopted global corporate strategies (Yip, 1995). The global

enterprise organizes its operations from R&D for product and process innovation,

through production and distribution, to final sales and marketing as an internationally

integrated ensemble (Yip, 1995). It obtains raw materials from cost efficient sources,

manufactures or assembles goods in the lowest cost zones, acquires and develops

technological expertise wherever it is favorable, and uses its managerial and technical

resources as economically as possible, to enter markets as efficiently as possible (Yip,

1995). These worldwide operating organizations are particularly common in

high-technology, high-skill and capital-intensive industries such as computers,

electronics and chemicals, as well as in some assembly industries like automobiles, all

of which benefit from economies of scale through the whole industrial supply chain from

R&D to final sales (Graham, 1998). Another sign that companies are becoming global

is the fact that more and more companies are transforming their organizational

structures based on economic regions to global product lines. Consumer product

companies such as Nestl? or McDonald’s have standardized production and

distribution although they customized their products to local tastes (Shepherd, 1999).

Partners and suppliers that serve other multinationals, however, have come under

increasing pressure to provide the same products and services anywhere in the world

(Shepherd, 1999). The growth of the multinational enterprises seems likely to spur

further development in the history of globalization. Corporations want the freedom to

shift employees from country to country, and to use citizens of one country to alleviate

skills shortages in another. This will be not so much a quantitative change but a

qualitative one – namely, greater migration of workers with skills, or “human capital”.

As already stated above, globalization might be seen, at least historically, as a more or

less constant process. However, it is due to the more recent speed-up of the process

that scholars have paid more attention to it and termed the phenomenon as

globalization. There has been some dramatic changes taking place, namely the

liberalization process leading to more and more free trade and capital flows, the

development of information technology, the plunge of transportation and

telecommunication costs and the shift from “workers” to “human capital” introducing a

new quality of globalization (Graham, 1998). Today globalization is often used as a

buzzword describing the reality in which corporations are embedded.

Complexity in Global Operations

Complexity in global operations arises from multiple environments in which

global actors are embedded where one must consider the wide variety of issues, the

existence of multiple ways of operating globally, and the constant change of the

operating environment (Hansen, 1999). As one example of this complexity, we present

a framework that highlights complexity in the choosing of foreign operations (Hansen,

1999) which upon deeper examination proves to be a very challenging ordeal. Global

forces that create change towards a global operating environment can be identified as

deregulation, technological advances, increased competition, demanding customers,

etc. (Hansen, 1999). These demand a new attitude to business. A global organization

is associated with both different attitude and different activities from its more

circumscribed, international predecessor. Success and survival in a global world or

when trying to “go global” yields three main implications for corporations (Parker 1996):

1. Social responsibility: The raising globalization in economy creates a

tendency towards a redistribution of power and responsibilities between governments

and corporations. There are growing expectations for businesses to adapt roles

previously played by governmental entities. On the government side, the resources

saved hereby provide the opportunity to reallocate resources in education, training, and

other modes of knowledge creation. On the corporate side again this means adopting

roles which governments have played previously and – as ethics varies according to

culture – firms have to find a balance between what is acceptable in different cultures.

This involves not tolerating business practices that are illegal in other countries, which

involves dangerous work for the population, or which might be harmful to the

environment. Also, customers pressure large corporations to tackle human right issues

and to promote a democratic society organized around values like freedom, equality,

well-being, justice, mutual respect and to deal with the growing gap between rich and

poor, armed conflicts around the word, minimal legal protection in some parts of the

world and corrupt regimes.

2. Organization strategy: In creating sustainable competitive advantage in a

global world, strategies must be informed of political, legal and social as well as

economic considerations. They should be able to yield industry foresight and leverage

global knowledge. Thus global strategies have profound implications for human

resource strategies as well. Global corporations should not just try to establish an elite

of jet setters – they might be difficult to integrate into the corporate mainstream – or an

international team of big-picture overseers to the exclusion of focused experts. Here,

organizational learning is in a central position. In summary, global corporations should

apply an overall strategy to co-ordinate and integrate dispersed operations and

diversification in order to provide higher customer and shareholder value in their

diverse markets.

3. Organization structure: Global organizations need to develop relationships

with their interest groups and manage these relationships well in order to create

efficient and productive networks. Internally, this means that organizations with high

organization structures will have to flatten their pyramids and implement

cross-functional ways of thinking. Matrix organization structures are one way of doing

this. The knowledge revolution associated with globalization has the potential to

restructure not only existing organizations but also the way work is organized and

conducted (e.g. telecommuting). This requires fundamental rethinking of how

organizational participants think about their relationship with the organization and the

organization’s role in a global world.

Global or Local?

In today’s international markets it is difficult to find a simple answer to the

question whether to globalize or localize a product. The primary goal of a company is

usually to maximize its shareholder value, which means maximizing income, minimizing

expenses, minimizing assets and maximizing liabilities (Douglas, 1997). Respective to

products, maximizing income means adapting products to meet local environments and

minimizing expenses means to standardize them as much as possible. International

segmentation studies have revealed that global standardization is appropriate only in

relation to certain product markets or market segments under certain market conditions

(Douglas, 1997). The choice of strategy on the level of standardization or adaptation is

depending on the contingent variables (Porter,1996): (1) product characteristics – from

universal over modified to country tailored ; (2) country characteristics – such as social

and political system or, economical and technological development, or cultural context,

etc. and (3) consumer characteristics – social classes, age, sex, urban or rural

residency, lifestyle, etc. An interaction between all three characteristics implies

feasibility of an international niching strategy by customizing the marketing mix to

identified consumer niches across countries and segments. An interaction between,

product and country characteristics implies a product adaptation strategy by tailoring

country-clusters on the basis of a product-market match. An interaction between

country and consumer characteristics implies feasibility of a product transformation

strategy, in which product offerings are standardized and positioning and promotion are

adapted for different target consumer segments in different countries (Walters, 1997).

An interaction between product and consumer characteristics implies a global

segmentation strategy concentrating on one marketing mix for one segment or a

different marketing mix for each segment. If no interaction between the three

characteristics can be shown, a global standardization strategy or a gradual

standardization strategy may be feasible (Porter, 1996).

Global Market Segmentation

A central issue in global marketing is assessing markets, which is usually done

by segmenting them. Global market segments are transnational market segments,

which have been acquired by utilizing country specific segmentation criteria, individual

characteristics of customers or both of the previously mentioned segmentation criteria

(Walters, 1997). Traditionally, global market segmentation has been undertaken by

using either county specific criteria or transnational variables common to individual

customers in different nations as a basis for segmentation (Walters 1997). Country

specific global segmentation criteria include economic growth and development criteria.

Individual characteristics of customers as a global segmentation criteria include

demographic variables: e.g. sex, age, income level, social class and education level,

psychographic variables: e.g. lifestyle factors in regard to work and leisure habits such

as activities, interests and opinions, and behavioral variables: e.g. patterns of

consumption, product category and brand loyalty and context of product usage

(Walters, 1997). More recently, hierarchical segmentation processes have emerged.

These hybrids attempt to combine the benefits of both presented approaches to global

market segmentation. The advantage of this type of approach is that initial country

sorting allows identifying a context for consumer behavior, which enjoys significant

homogeneity (Walters, 1997). In such an environment, it is more probable that

similarity in lifestyle, behavior and decision-maker characteristics will translate into

viable transnational market segments. Three different ways of carrying out this process

are presented by Walters (1997):

1. Kale and Sudharshan: initial country screening followed by

microsegmentation, where the focus is on transnational similarities between customer

groups. Either segments are identified within target markets and then aggregated

across the qualified countries based on similarity or individual customers in all the

qualified countries are directly aggregated into segments.

2. Kreutzer: target markets are separated from all other countries, segments are

delineated within target countries sharing common features and finally factors that may

require marketing mix modification are taken into account.

3. Amine and Cavusgil: country clustering, lifestyle segmentation in which

targeted consumers are identified and aggregated across countries thus directly

delineating transnational segments and focusing on consumer behavior and identifying

two “shopping” clusters.

Walters (1997) states, “In the operationalization of segmentation strategies it

should be noted, that if the scope of international operations is broad, it might be