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- Market Drivers Of Globalization
- Political Drivers Of Globalization
- 5 Major Drivers Of Globalization Theory
As per V K Bhalla and S. Shiva Ramu the major drivers or factors of Globalization are – 1. Economic driving forces of globalization. One of the main driving forces of globalization is economic development. Establishment of a new monetary system, the Bretton woods system in 1940. Establishment of GATT in 1947. Define the major drivers of globalization and then introduce. Be separated into five. The core drivers of globalization are alive and well, but executives are still grappling with how to seize the opportunities of an interlinked world economy. V.B.Shah Institute of Management Subject: Business Environment Topic: Drivers & Hurdles of Globalization.
According to the standard theory, international trade theory leads to the share of resources being consistent with the corporate advantage. This further leads to specialization thereby enhancing the output. The quick progress in the capital market is because of the globalization. Along with the benefits offered by globalization, there are major concerns related to it. The first concern is related to the fact that globalization leads to a more immoral dispersion of income among the countries and within the countries.
- Question: List And Explain Five Major Characteristics Of Globalization And The Two Main “drivers” Of Globalization. This problem has been solved!
- Industry Globalization Drivers. Common customer needs and the opportunity to use global marketing channels and transfer marketing to some extent are also incentives to choose internationalization. (Ferrier, 2004) 4) Cost drivers Sourcing efficiency and costs vary from country to country and global firms can take advantage of this fact.
- Two key factors seem to underlie the trend toward the increasing globalization of markets and production: The decline of barriers to trade and increasing technological capabilities.
The second concern is related to loss of national autonomy and the countries are finding it highly complex to pursue independent domestic policies (Rangarajan, 2006). Dell Corporation has been analyzed for the purpose of this study. Since last 26 years, Dell has been capable of authorizing countries, communities, customers as well as people all over the globe to make use of the technology so that they can realize their dreams. The company tends to value its customers and thus aims at delivering the products and the services according to the needs and the wants of the customers (Dell, 2012).
Market Drivers Of Globalization
The five main kinds of drivers that are forcing international firms to the globalization of operations are political, technological, market, cost, and competition (Indian Institute of Material Management, 2012). Political Forces There is a trend towards the association and socialization of the global community. Both North American Free Trade Agreement (NAFTA) and the European Union present major marketing opportunities for the companies. If the government can reduce barriers to trade as well as foreign investment and can privatize most of the industries in formerly communist nations then globalization can be fostered (Acemoglu & Yared, 2010).
Technological Forces With the progress in computers as well as communication technology ideas information can flow across borders. The small companies are capable of competing all over the globe because of the internet as well as communication technology. By making use of the internet for the purpose of business exchanges, Business-to-Business (B2B) transaction is providing major savings. Market Forces When the companies tend to globalize, they become global customers. In order to retain their presence in the global markets and expand the consumer base, organizations endeavor to set their trail towards global shores.
Political Drivers Of Globalization
When the home market saturates, companies seek to operate globally. Cost Forces The management goal is to make use of the economies of scale so that it can reduce unit cost. It is vital for the companies to globalize the product lines so that it can successively attain economies of scale. Production houses can be located in those countries where the cost of production is observed to be less.
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