What Drives Globalization? Part 1/4

Globalization is driven by four factors:

  1. Cost
  2. Market
  3. Environment
  4. Competition


Maximizing their investment is a motivator for many global companies. Single-nation markets might not be large enough to offer a company’s country subsidiaries all possible economies of scale and scope, especially given the dramatic changes in the marketplace. The goal, then, is to get the most mileage from the investment cost. At the same time, advertising and promotion can bleed across borders, so it makes sense to make the product available where people are going to hear or learn about it.

A realistic, objective assessment of global opportunities and costs will probably lead to tough decisions about which markets, customer segments, or product positioning to focus on and which ones to bypass as well as appropriate strategies. In pursuing price leadership, for example, the global marketer offers a product or service that is nearly identical to the competition’s, but at a lower price. This often means investing in scale economies and controlling costs that typically include overheads, research and development, and logistics.

The alternative strategy, product differentiation, takes advantage of the marketer’s real or perceived superiorities on value elements such as design or technical support. Cost leadership and differentiation are not mutually exclusive, of course, and should be balanced appropriately. For instance, product components manufactured to one worldwide standard on one production line can be assembled into different final products backed by unique positioning and brand differentiation to meet local customer tastes. And the “mass customization” product design movement that emerged two decades ago still permits low-cost tailoring of manufactured goods to individual customer specifications. Most global marketers combine high differentiation with cost containment so their global activities contribute to economies of scale in production and marketing.

Marketers who opt for high differentiation cannot forget to monitor costs, though, because customer value perceptions rely at least in part on the price paid for the quality obtained. Knowing this, Nissan introduced the sub-$10,000 Versa in the U.S. in late 2008, as the economic recession was just being acknowledged. The small vehicle lacks frills – there is no air conditioning or power steering – but its target market does not expect luxurious touches in a car in that price range.

This is an excerpt from Dr. Czinkota’s book Global Business: Positioning Ventures Ahead, co-authored by Dr. Ilkka Ronkainen.

Michael R Czinkota and Ilkka A Ronkainen, Global Business: Positioning Ventures Ahead (New York: Routledge, 2011), pg.90-91.

Related posts:

50 thoughts on “What Drives Globalization? Part 1/4

  1. Just desire to say your article is as amazing.
    The clarity in your post is just cool and i can assume you
    are an expert on this subject. Fine with your permission let me to
    grab your feed to keep up to date with forthcoming post. Thanks a million and please carry
    on the gratifying work.

  2. I do accept as true with all the concepts you have offered in your post. They are very convincing and can definitely work. Nonetheless, the posts are too short for newbies. May you please extend them a little from next time? Thanks for the post.

  3. You’ll find some intriguing points in time in this article but I don’t know if I see all of them center to heart. There is some validity but I will take hold opinion till I appear into it further. Superior article , thanks and we want extra!

  4. You actually make it seem so easy together with your presentation however I in finding this matter to be actually something which I think I might never understand. It kind of feels too complicated and extremely huge for me. I am having a look ahead to your next put up, I will attempt to get the hold of it!

  5. Hey! This is my first comment here so I just wanted to give a quick shout out and say I genuinely enjoy reading through your blog posts. Can you recommend any other blogs/websites/forums that deal with the same subjects? Thank you!

  6. you are in point of fact a good webmaster. The web site loading velocity is amazing. It kind of feels that you are doing any distinctive trick. Moreover, The contents are masterwork. you’ve performed a fantastic task in this topic!

  7. Thank you a lot for providing individuals with an extraordinarily splendid possiblity to read critical reviews from this site. It is usually so pleasing plus packed with fun for me and my office friends to visit the blog not less than 3 times a week to study the fresh tips you have. And of course, I’m so certainly happy for the surprising opinions served by you. Selected two ideas on this page are truly the most effective I’ve had.

  8. Hello my name is Heiko. You need to build a email subscribers list to market your site to, there is massive amounts of amazing tips here! I’ll be the first one to subscribe to your list! I’ve been using http://TEARcloud.com which is free for your first 2000 subscribers. I’de love to help you skyrocket your marketing to get you more subscribers! Add me on skype: heiko.viceoffers or shoot me an email!

  9. I know this if off topic but I’m looking into starting my own weblog and was curious what all is needed to get setup? I’m assuming having a blog like yours would cost a pretty penny? I’m not very web smart so I’m not 100 certain. Any suggestions or advice would be greatly appreciated. Appreciate it

  10. Howdy I’m appreciating the time and energy you put into your post and informative information you present. It’s awesome to come across a blog every once in a while that isn’t the same out of date remake information. Nice read! I’ve bookmarked your site and I’m including your RSS feeds to my Yahoo account.

  11. of course like your web-site however you have to test the spelling on quite a few of your posts. Many of them are rife with spelling issues and I in finding it very troublesome to inform the truth on the other hand I will definitely come back again.

  12. Hello Web Admin, I noticed that your On-Page SEO is is missing a few factors, for one you do not use all three H tags in your post, also I notice that you are not using bold or italics properly in your SEO optimization. On-Page SEO means more now than ever since the new Google update: Panda. No longer are backlinks and simply pinging or sending out a RSS feed the key to getting Google PageRank or Alexa Rankings, You now NEED On-Page SEO. So what is good On-Page SEO?First your keyword must appear in the title.Then it must appear in the URL.You have to optimize your keyword and make sure that it has a nice keyword density of 3-5% in your article with relevant LSI (Latent Semantic Indexing). Then you should spread all H1,H2,H3 tags in your article.Your Keyword should appear in your first paragraph and in the last sentence of the page. You should have relevant usage of Bold and italics of your keyword.There should be one internal link to a page on your blog and you should have one image with an alt tag that has your keyword….wait there’s even more Now what if i told you there was a simple WordPress plugin that does all the On-Page SEO, and automatically for you? That’s right AUTOMATICALLY, just watch this 4minute video for more information at. Seo Plugin

Leave a Reply