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The Globalization of Markets

hbr.org

The author asserts that well-managed companies have moved from the emphasis on customising items to offering globally standardised products that are reliable and low priced.

Global companies will achieve long-term success by concentrating on what everyone wants rather than ...

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Technology is a powerful force that drives the world toward a converging commonality. The result is the emergence of global markets for standard consumer products.

Corporations geared toward this new reality benefit from enormous economies of scale in production, distribution, marketing, an...

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The strategy of the multinational corporation and the global corporation differs:

  • The multinational corporation operates in several countries and adjusts its products and practices at a relatively high cost.
  • The global corporation oper...

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Our age is characterised as driven by "the Republic of Technology whose supreme law is convergence, the tendency for everything to become like everything else", writes Daniel J. Boorstin in his trilogy The American.

This trend has pushed markets toward global commo...

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Customers will prefer the world standardised products if a company forces costs and prices down while pushing quality and reliability up. For example Henry Ford (Model T), South Korea (televisions sets), Malaysia (microcomputers), Singapore (...

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In a rapidly evolving world, the most endangered companies tend to be those that dominate small domestic markets with high value-added products where there are smaller markets. Distant competitors can enter the sheltered markets of those companies by offering cheaper goods.

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The multinational corporation knows a lot about a great many countries. It adapts to supposed differences, not questioning the possibility of their transformation nor recognising how the world is ready for modernity, especially when the price is good.

By contrast, g...

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Money has three special qualities:

  1. Scarcity
  2. Difficulty of acquisition
  3. Transience

People value money. But in an increasingly homogenised world market, people want products that everyone else wants. If the price is low enough, they will choose the standardised...

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Different cultural preferences, tastes and standards and business institutions are remnants of the past. Some preferences will die gradually, while others will expand into mainstream global preferences.

Many multinational corporations believe that preferences are fixed. As ...

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Many companies tried and failed to standardise world practice by exporting domestic products and processes without accommodation. 

Poor execution is an important cause. More important is the failure of imagination. What customers say they want is often different to what their behaviour demo...

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The global corporation accepts that technology drives consumers toward the same goals:

  • easing life's burdens
  • expanding of discretionary time
  • spending power

Managerially advanced corporations have been eager to offer what customers really want rather than wha...

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Japanese companies don't look with mechanistic thoroughness at the way markets are different. Instead, they search for meaning with a deeper wisdom. They discovered that all markets have an overwhelming desire for dependable, world-standard modernity in all things at aggressively low pric...

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An ancient dictum of economics states that things are driven by what happens at the margin, not at the core. That means in ordinary competitive analysis, what's important is the marginal price, not the average price. What counts in commercial affairs is what happens at the cuttin...

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