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Globalization of Production
Vizio flat panel TV is
designed in a small office in California assembled in Mexico
From
panels made in South Korea electronic components made in China microprocessors made in the U.S.
Globalization of markets
In the past, each country had its own companies in many industries and its own products
Drivers of Globalization
Two factors underlie globalization
Decline in barriers to the free flow of
goods, services, and capital that has occurred since the end of World War II Technological change
foreign direct investment Advanced industrial nations of the West committed themselves after World War II to removing barriers to the free flow of goods, services, and capital between nations.
Index 1950=100
19 50
19 54
19 58
19 62
19 66
19 70
19 74
19 78
19 82
19 86
19 90
19 94
19 98
World Production
20 02
barriers
made
movement
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Japan
United States
World
2003
tastes?? Global Customers due to increased travel and organizational buying Growing global and regional channels Increasing number of world brands and global advertising
by flexible manufacturing) Accelerating technological innovation Increasing cost of product development relative to market life Advances in transportation Emergence of newly industrialized countries with productive capability and low labor costs
producers and consumers Market liberalization and privatization Adoption of common standards
More countries becoming key competitive battlegrounds Rise of new competitors intention on becoming global Growth of global networks making countries interdependent in particular industries More companies becoming internationally oriented rather than nationally centered New global alliances
Export development is a process and not an event. Most businesses fail to understand this. It is commonly recognized that a business needs a product or services which is in demand in overseas markets. But the fact that businesses need proper skills, resources, commitment and information to support sustained exporting activities over the longer term is often overlooked. Neglecting factors such as these can be a critical exporting barrier for small and medium-sized businesses. To benefit from export market opportunities, a business needs to make a sustained commitment in resources: effort, money and time. Before rushing out to export, a business needs to find out the right reason to export and test its export readiness
CChecking readiness You may be successful in the domestic market and are now looking to export to overseas market. But are you ready? For this you need to assess the market opportunities and your business' internal capabilities It will take more time, money and resources to establish your business in an overseas market than in a domestic one. You should have a long-range view. As an exporter, you should be equipped with different skills such as finance, technical, marketing, administration and market experience.
the weakness & strength of your product in terms of quality, price & uniqueness Research why the product will attract sales in the destination market. Also analysis whether your company has the capacity to tailor it to the requirements of the target market? AAccessing capability Another key test in determining your export capability is to analysis why your business is successful at the domestic level, what are your competitive advantages, and how these competitive advantages could help you in grabbing success in the international market as well
P . C .
The risks in exports are totally different from those encountered domestically, and they are unavoidable to some extent Political risk Legal risk Credit related risk Internet frauds
Copyrights: Copyright acts protect a creator from having his creation (literary work, dramatic work, musical work, artistic work, cinematographic film, sound recording, etc.) copied or exploited by someone without the creator's permission.
2. Trade marks: In simple term, a trade mark (or brand name) is nothing but a visual symbol or sign such as signature, name, device, label, numerals, etc. which distinguishes the creator's goods or services or other articles from other similar goods or services created by others.
exert monopoly of the invention and thus to fetch adequate commercial value for a period of 20 years. To gain patent, an invention must be new, inventive and capable of industrial application.
4. Geographical indications: The term 'geographical indication' (in relation to goods) means an indication which identifies goods as originating, or manufactured in the territory of a country, or a region or locality in that territory, where a given quality, reputation or other characteristic of such goods is essentially attributable to its geographical origin.
5. Industrial designs: The term 'design' is defined as "only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye.
6. Trade secrets or know hows: Trade Secrets or Know Hows are confidential information which may be commercially or technically valuable, and therefore, they need protection.
To grab success in export business, it usually requires a financial commitment over a long period until one's export venture is paid off. Besides initial investments, exporters also need to offer credit to win overseas customers. Hence, you must pay careful attention to cashflow management before or even after starting your export business.
development the United Nations (UN) which maintains international peace and security, develops friendly relations among nations, cooperates in solving international problems and promotes respect for human rights, and is a center for harmonizing the actions of nations
dominant industrial power accounting for about 40.3% of world manufacturing output By 2007, the U.S. accounted for only 20.7% Other developed nations experienced a similar decline
Mini-multinational means Growth of medium size and small multinationals Eg. Bharat Forge - an Indian maker of steel car components, the company recently bought forges in the United States and Germany Another mini-multinational is Videsh Sanchar NigamLtd., or VSNL, the former state monopoly for international telephone calls that was privatized in 2002.
The company had certain business deal with US giant Tyco International. The company's ambitions stretch beyond India. VSNL wants to establish itself, as a"onestop telecommunications provider for globalbusinesses."
Con
Destroys manufacturing
and services Economic growth Increase in consumer income Creates jobs (for many) Countries specialize in production of goods and services that are produced most efficiently
jobs in wealthy nations Wage rates of unskilled in advanced countries decline Companies move to countries with fewer labor and environment regulations Loss of sovereignty Homogenized cultures
money into different currencies Range of problems in an international business is wider and problems are more complex International business must cope with different, conflicting government rules and systems Different strategic approaches required
Key terms
An international business any business with international sales, sourcing, or investment A multinational business any business with productive activities in 2 or more countries
A global business a business that takes a