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Five factors of acceleration of globalisation - Essay Example

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Five factors of acceleration of globalisation

These include market drivers, cost drivers, technological drivers, government or political drivers, and competitive drivers. Each of these will each be explained in detail in the following paragraphs (Campbell, Stonehouse, and Houston, 2002).
There are two popular frameworks that cover the basic concepts of the drivers of globalisation. One of these is particularly relevant and will be covered here. One of the frameworks is Yip's Framework, and the other one of the frameworks is Porter's Framework. The one that will be covered in the context of this assignment is Yip's Framework, which covers four drivers of globalisation (Campbell, Stonehouse, and Houston, 2002).
Yip did not believe in the two extremes that companies were either global or not global. Instead, he believed that all organizations were combinations of the two, each one being more of one than the other. His framework-or outline-allows an observer to determine specifically which parts of an organization are global and which parts have different aspects on a local level. If an organization wishes to evaluate their global strategy, analyzing Yip's Framework can play a crucial role (Campbell, Stonehouse, and Houston, 2002)..
Yip argued that, "A global strategy will be global in many respects, but may also include features that are locally oriented. To achieve the benefits of globalization, the managers of a worldwide business need to recognize when industry conditions provide the opportunity to use global strategy levers (Campbell, Stonehouse, and Houston, 2002)." According to Yip, there are four drivers that that determine the extent of globalisation: market drivers, cost drivers, government drivers, and competitive drivers (Campbell, Stonehouse, and Houston, 2002).
Market Globalisation Drivers
The first driver of globalisation to take a look at is market drivers. "As domestic markets become more and more saturated, the opportunities for growth are limited and global expanding is a way most organizations choose to overcome this situation. Common customer needs and the opportunity to use global marketing channels and transfer marketing to some extent are also incentives to choose internationalization" (Bauernfeind, 2005, pg. 1).
Market drivers have resulted in the convergence of per capita income among industrialized nations; take a look at the exchange rates across the globe for example. There has also been a convergence of lifestyles and tastes. People are demanding more high quality products and services than they ever have before, and they want them at the cheapest price, which seriously creates a problem for businesses that are attempting to make a profit. Organisations are beginning to behave as global customers. When organizations spread their operations to other countries, they have to look at finding suppliers in those areas in order to minimize their costs.
There has been a notable increase in travel creating global consumers. This can perhaps be attributed to the astronomical increase in communication that came along with the growing popularity of the Internet. Regional and global channels have grown to astronomical proportions. This can be attributed once again to the growth in worldwide communication, as well as ...Show more

Summary

Globalisation is a concept that has rapidly taken off over the course of the past twenty years or so. The purpose of this paper is to, with special reference to production and market globalisation; carefully discuss five factors that have accelerated this process in the past two decades…
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Five factors of acceleration of globalisation essay example
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