Boarding Pass to a Brighter Future O'Hare's big project is just one aspect of the state's multifaceted role in international commerce. There are more than 80 consulates and consuls general based in that city, with more honorary consuls scattered throughout the state from Swansea to Moline.
An industry in which firms must compete in all world markets of that product in order to survive.
An industry in which a firm's competitive advantage depends on economies of scale and economies of scope gained across markets. Some industries are more suited for globalization than are others. The following drivers determine an industry's globalization potential. Flat experience curves in an industry inhibits globalization.
Customer Drivers Common customer needs favor globalization. For example, the facsimile industry's customers have more homogeneous needs than those of the furniture industry, whose needs are defined by local tastes, culture, etc. Furthermore, global customers often require globally standardized products.
Global channels require a globally coordinated marketing program. Strong established local distribution channels inhibits globalization. World brands with non-dictionary names may be developed in order to benefit from a single global advertising campaign. Competitive Drivers Global competitors: The existence of many global competitors indicates that an industry is ripe for globalization.
Global competitors will have a cost advantage over local competitors. When competitors begin leveraging their global positions through cross-subsidization, an industry is ripe for globalization. Government Drivers Technical standards Regulations The furniture industry is an example of an industry that did not lend itself to globalization before the 's.
Because furniture has a high bulk compared to its value, and because furniture is easily damaged in shipping, transport costs traditionally were high. Government trade barriers also were unfavorable. IKEA's furniture was unassembled and therefore could be shipped more economically.
IKEA also lowered costs by involving the customer in the value chain; the customer carried the furniture home and assembled it himself. IKEA also had a frugal culture that gave it cost advantages.
IKEA successfully expanded in Europe since customers in different countries were willing to purchase similar designs. Different tastes in furniture and a requirement for more customized furniture. The Swedish Krona increased in value, increasing the cost of furniture made in Sweden and sold in the U.
Stock-outs due to the one to two month shipping time from Europe More competition in the U. Comparative advantage resides in the factor endowments and created endowments of particular regions. Factor endowments include land, natural resources, labor, and the size of the local population.
In the 's, Swedish economists Eli Hecksher and Bertil Ohlin developed the factor-proportions theory, according to which a country enjoys a comparative advantage in those goods that make intensive use of factors that the country has in relative abundance.
Porter argued that a nation can create its own endowments to gain a comparative advantage. Created endowments include skilled labor, the technology and knowledge base, government support, and culture.
Porter's Diamond of National Advantage is a framework that illustrates the determinants of national advantage. This diamond represents the national playing field that countries establish for their industries.
Types of International Strategy: Global Multi-domestic Strategy Product customized for each market Decentralized control - local decision making Effective when large differences exist between countries Advantages:VML is an award-winning digital marketing, advertising and transformation agency.
Part of WPP, VML has more than 3, employees in 33 offices around the globe. Forscherwelt, or Researchers‘ World, is Henkel’s international education initiative that encourages children to explore the world of science. That is why China is aptly called the “Global Factory.” Conversely, few Chinese manufactures currently adopt a global sourcing strategy.
Analysis of the problems and challenges of global sourcing companies need to develop a sourcing strategy based on the integration and coordination of suppliers across worldwide purchasing. DHL is the global market leader in the logistics industry.
DHL commits its expertise in international parcel, express, air and ocean freight, road and rail transportation, contract logistics and international mail services to its customers.
The annual Global Services Location Index, formerly called the Offshore Location Attractiveness Index, is a tool to help companies understand and compare the factors that make countries attractive as potential locations for offshore services.
Globalization and the Location of Economic Activity Until recently, most research in international economics ignored the location of economic activity inside countries. In fact, the majority of industrial firms are located in cities and produce goods for urban consumers.