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These drivers affect the use of all five global strategy levers. That is why it is important to understand how industry globalization drivers affect the threat of entry and rivalry among existing competitors.MARKET GLOBALIZATION DRIVERSMarket globalization drivers-common customer needs, global customers, global channels, transferable marketing, and lead countries-depend on the nature of customer behavior and the structure of channels of distribution.
#Yips drivers of globalisation tesco driver#
Each key industry globalization driver affects the potential use of global strategy levers (global market participation, global products. These industry conditions can be grouped in four categories of globalization drivers: market, cost, government, and competitive. Here we will examine each driver in more depth.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. Yip’s Total Global Strategy)Industry globalization drivers are the underlying conditions in each industry that create the potential for using global strategy.
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Selling directly to overseas markets – either with sales agents, distribution agreements or online.Licence technology & other intellectual property.There are several alternative approaches for a business looking to expand globally – many choose to follow one or more of the following: software, outsourced services & media content ĝigital communication has stimulated global trade in “knowledge products” – e.g.Ğxpressed in 2005 US dollars, the charge for a three-minute New York-London call has dwindled from $80 in 1950 to $0.23 in 2007.The Internet has dramatically lowered the cost of transmitting and communicating information.This helps to bring prices in the country of manufacture closer to prices in the export market.Ĝosts of ocean shipping have come down, due to containerisation, bulk shipping, and other efficiencies.Picking up on two examples from the drivers above: Governments want to encourage domestic businesses to expand overseas (it results in a flow of profits back into the domestic economy) – so there is lots of help available for businesses looking to expand overseasīusinesses themselves though are not the only drivers of globalisation.The barriers to international business are lower and falling – it is much easier to expand into new territories.Multinationals (businesses that operate in more than one country) want to increase sales, profits and shareholder value.Influential commentator Hamish McRae has stated that businesses are the “main driver” of globalisation. Whilst there are many factors that have contributed to globalisation, it is the actions of businesses that have done most to accelerate the process in recent years.