Chapter-1 : The New Global Challengers
Summary
TLDRThe script delves into the concept of globalization, highlighting its impact on economies and businesses worldwide. It discusses the integration of national markets, the rise of cross-border trade and investment, and the influence of technological advances on international business. The script also touches on the emergence of emerging markets as significant players, creating new multinational firms known as 'Global Challengers,' which are reshaping the global business landscape.
Takeaways
- 🌐 Globalization is the process of integration and interdependence of the world's economies, facilitated by falling trade barriers and technological advances.
- 🛒 Companies now operate in a unified global market, sourcing raw materials and services globally to maximize advantages and reduce costs for consumers.
- 🌍 Market globalization is characterized by the interdependence of national economies, with regional integration blocks like the EU and NAFTA contributing to this trend.
- 💸 The globalization of capital is extending economic activities worldwide and fostering interconnectedness among economies through the free movement of capital.
- 🛍️ Consumer preferences are converging worldwide, with the popularity of music, entertainment, consumer electronics, clothing, and food transcending national borders.
- 🏭 Multinational firms are manufacturing products globally to obtain maximal advantages, leading to a more competitive and innovative global business environment.
- 📈 Emerging Markets, such as Brazil, China, India, Mexico, and Turkey, are rising as significant players in the global economy, offering attractive target markets and low-cost manufacturing bases.
- 🌟 The rise of new Global Challengers from Emerging Markets is creating intense competition and posing new risks for firms from advanced economies.
- 📊 Emerging Markets are characterized by rapid economic growth, a young population, a growing middle class, and liberalizing trade environments.
- 🏗️ These markets are becoming hubs for manufacturing activities by global multinational firms due to advantages like low-wage, high-quality labor, and knowledge workers.
- 🚀 The success of new Global Challengers indicates a shift in international trade and investment, with more Emerging Market firms becoming key competitors on the world stage.
Q & A
What does the term 'globalization' refer to in the context of the script?
-Globalization refers to the gradual integration and growing interdependence of the world's economies, characterized by falling trade barriers and easier ways to conduct international business, leading to a unified global market.
How does globalization affect company managers' perspective on the market?
-Globalization allows company managers to view the world as one big marketplace, facilitating cross-border trade and investment, and connecting buyers, manufacturers, suppliers, and governments more than ever before.
What technological advances have contributed to the internationalization of companies?
-Technological advances in communications, manufacturing, and transportation have played a significant role in the internationalization of companies, allowing them to launch websites for global sales and source raw materials and services from suppliers worldwide.
How does globalization impact consumer preferences worldwide?
-Globalization has led to converging preferences for many consumer products worldwide, as evidenced by the universal popularity of music, entertainment, consumer electronics, clothing styles, and food.
What are the specific characteristics of market globalization mentioned in the script?
-Market globalization involves the integration and interdependence of national economies, with countries depending on each other for trade and investment. It has been facilitated by regional integration blocks and the free movement of capital, leading to economic interconnectedness.
What are the consequences of market globalization for businesses?
-Market globalization presents numerous business opportunities for internationalizing firms, as well as new challenges such as more demanding buyers and new competitors from around the world. It also pressures firms to internationalize to stay competitive.
What is the role of emerging markets in the context of globalization?
-Emerging markets, such as Brazil, China, India, Mexico, and Turkey, are becoming attractive target markets and low-cost manufacturing bases, often with high-quality labor and knowledge workers. They are also giving rise to a new generation of multinational firms known as the new Global Challengers.
How do technological advances facilitate the operations of managers in a globalized world?
-Technological advances in information, communication, and transportation have made it possible for managers to organize operations around the world, connecting geographically distant locations closely through the internet and global telecommunications.
What are the advantages of internationalizing a company's value chains?
-Internationalizing a company's value chains allows for obtaining inputs from suppliers around the world, which can lead to cost reductions, increased innovation, and access to new markets.
What challenges do companies face in the era of globalization?
-Companies face challenges such as increased competition from global challengers, the need to adapt to diverse and demanding buyer preferences, and the pressure to internationalize to exploit the advantages of globalization.
Why are emerging markets attractive for international businesses?
-Emerging markets are attractive due to their rapid economic growth, young populations, growing middle class, liberalizing trade environments, and the presence of low-wage, high-quality labor for manufacturing and assembly operations.
Outlines
🌐 Globalization and Market Integration
The first paragraph discusses the concept of globalization, which is the increasing integration and interdependence of the world's economies. It highlights the role of falling trade barriers and advancements in technology, which facilitate international business and create a unified global marketplace. The paragraph emphasizes the growth of cross-border trade and investment, the convergence of consumer preferences worldwide, and the benefits of globalization such as reduced prices for goods and services, job creation, and increased living standards. It also touches on the regional integration blocks like the European Union and the North American Free Trade Agreement, and the impact of globalization on currency transactions, capital movement, and lifestyle similarities across different regions.
🚀 The Rise of Emerging Markets and Global Challengers
The second paragraph delves into the characteristics of Emerging Markets, which are low-income nations like Brazil, China, India, Mexico, and Turkey that are thriving under globalization. These markets are attractive due to their large populations, rapid economic growth, and liberalizing trade environments. The paragraph outlines the advantages of these markets, including low-cost manufacturing bases, high-quality labor, and the presence of knowledge workers. It also introduces the concept of 'new Global Challengers'—multinational firms from Emerging Markets that are becoming significant competitors in the global marketplace. Examples of such firms are provided, illustrating their growth and impact on the world economy.
🌟 Opportunities and Challenges of Globalization
The final paragraph underscores globalization as a major trend in international trade and investment, bringing new opportunities and challenges for companies. It suggests that firms must adapt to thrive in the global environment, acknowledging the competitive edge that Emerging Market firms possess and their increasing presence on the world stage. The paragraph concludes with a note on the importance of preparing for the dynamic global landscape shaped by globalization.
Mindmap
Keywords
💡Globalization
💡Trade Barriers
💡International Business
💡Market Globalization
💡Capital Globalization
💡Consumer Preferences
💡Technological Advances
💡Emerging Markets
💡New Global Challengers
💡Regional Integration Blocks
💡Global Business Environment
Highlights
Globalization refers to the gradual integration and growing interdependence of the world's economies.
Trade barriers are falling and international business is becoming easier, leading to a unified global market.
Technological advances in communications, manufacturing, and transportation are facilitating the internationalization of companies.
Market globalization is characterized by the integration and interdependence of national economies for trade and investment.
Regional integration blocks like the European Union and NAFTA have contributed to globalization.
The globalization of capital is extending economic activities and fostering interconnectedness among world economies.
Lifestyles and preferences worldwide are becoming increasingly similar, influencing consumer behavior.
Multinational firms are manufacturing products wherever they can obtain maximal advantages.
Globalization has led to a substantial reduction in tariffs and non-tariff barriers to international trade and investment.
Emerging economies like China and India have transitioned towards market-based economic systems, promoting economic development.
Technological advances have made it possible for managers to organize global operations and connect distant locations.
Globalization presents new business opportunities and challenges, including more demanding buyers and new competitors.
The rise of new multinational firms from emerging markets is creating an intensely competitive global business environment.
Emerging markets are becoming attractive target markets and low-cost manufacturing bases with high-quality labor.
Emerging markets are characterized by rapid economic growth, industrialization, and modernization.
China, as the largest emerging market, has been growing its economy at an impressive rate and producing new global challengers.
New Global Challengers leverage local natural resources and low-cost labor to their advantage in the global marketplace.
The success of new Global Challengers indicates a shift in the character of international trade and investment.
Globalization is the most important trend in international trade and investment, bringing new opportunities and challenges.
Transcripts
[Laughter]
[Music]
[Laughter]
the term globalization refers to the
gradual integration and growing
interdependence of the world's economies
falling trade barriers and easier ways
to conduct international business are
contributing to a gradual integration of
most national economies into a unified
Global
Market this process is allowing company
managers to view the world as one big
Marketplace the current times are
experiencing enormous growth in crossb
trade and investment buyers
manufacturers suppliers and governments
are more connected to each other across
National borders than ever
before simultaneously preferences
worldwide for many consumer products are
converging as exemplified by the
universal popularity of Music
Entertainment consumer electronics
clothing styles and
food ongoing technolog iCal advances in
Communications manufacturing and
transportation are facilitating the
internationalization of countless
companies around the world countless
firms are launching websites that allow
them to sell products and services well
beyond their National borders research
and development can be performed just
about anywhere companies Source raw
materials components and service inputs
from suppliers located around the world
wherever the companies can access
maximal advantages the competitive and
innovative activ ities of
internationally active firms help reduce
the prices that consumers and firms pay
for products and services
internationally active firms create jobs
thereby increasing the living standards
of people around the world let's examine
the specific characteristics of Market
globalization Market globalization is
the integration and interdependence of
national economies today countries
depend on each other for trade and
investment more than ever before
globalization has arisen partly as
groups of countries in Europe Latin
America North America and other world
regions have come together to form
Regional integration blocks such as the
European Union Moser and the North
American Free Trade Agreement what has
led to the trends now occurring under
globalization in the process of
conducting International transactions
firms and governments undertake massive
buying and selling of national
currencies such as dollars euros and Yen
the free movement of capital around the
world the globalization of capital is
helping extend economic activities
across the globe and is fostering
interconnectedness among world economies
at the same time Lifestyles and
preferences of people worldwide are
increasingly similar from Brisbane to
Boston to Birmingham people are buying
much the same products and
services finally multinational firms are
manufacturing their products wherever
they can obtain maximal advantages
anywhere in the
world
numerous globalization drivers can be
identified first the past several
decades have brought a substantial and
WID spread reduction in tariffs and
non-tariff barriers to international
trade and investment since the 1980s
China and India as well as the countries
in the former Soviet Union have all
transitioned toward economic systems
based on Market forces and free trade
these countries and many others around
the world have industrialized and
modernized their infrastructure leading
to growth in Economic Development
declining regulations and falling
barriers in international finance have
led to Growing integration of world
financial markets technological advances
in information Communications and
transportation have made it possible for
managers to organize far-flung
operations around the world
geographically distant locations closely
connected by the internet and global
telecommunications what are the
consequences of Market globalization
globalization has numerous consequences
it has produced countless new business
opportunities for internationalizing
firms more and more companies recognize
the advantages they can obtain by
internationalizing their value chains as
well as by obtaining inputs from
suppliers around the world at the same
time however globalization also brings
new challenges companies are facing more
demanding buyers and new competitors
from around the world many more firms
are feeling the pressure to
internationalize or risk losing out to
competitors that exploit globalization's
advantages the rise of companies new to
International Business from both the
advanced economies and Emerging Markets
is posing new risks in creating an
intensely competitive Global business
environment the most recent Legacy of
globalization is the rise of Emerging
Markets historically most international
business was conducted by the advanced
economies primarily in Europe North
America and Japan as well as Australia
New Zealand Hong Kong and Singapore
however recent years have seen the rise
of the Emerging Markets formerly
low-income Nations such as Brazil China
India Mexico and turkey that are
prospering under
globalization Emerging Markets are very
appealing they have become attractive
Target markets and they are lowcost
manufacturing bases often home to
highquality labor and knowledge workers
more recently Emerging Markets have
given birth to a new generation of
multinational firms the new Global
Challengers these companies have become
important new competitors to firms from
the advanced economies before delving
into the new Global Challengers let's
review more details about Emerging
Markets Emerging Markets are located
throughout the world they include
approximately 27 countries the most
notable of which are China India Brazil
and Russia collectively the Emerging
Markets represent about 2/3 of world
population some four billion people and
43% of world gross domestic product in
contrast to advanced economies Emerging
Markets are experiencing rapid economic
growth as well as recent
industrialization and
modernization most have a young
population and a growing middle class
the trade environment in these countries
is liberalizing and they are the
recipients of massive investments from
the advanced economies and other
Emerging Markets already Emerging
Markets are providing about onethird of
the world's total exports in most cases
Emerging Markets are characterized by an
adequate commercial infrastructure
underdeveloped Commercial Legal systems
and high-risk business
environments however all the Emerging
Markets are experiencing rapidly Rising
living standards and a growing middle
class with Rising economic
aspirations Emerging Markets make
excellent targets for sales of products
and services from abroad they are also
First Rate bases for manufacturing
activities by global multinational firms
companies from Japan Europe the United
States and other advanced economies have
invested vast sums to develop factories
and other manufacturing facilities and
Emerging Markets China and Eastern
Europe are leading
examples the reason is that these
markets are home to low-wage high
quality labor for manufacturing and
assembly
operations Emerging Markets possess
other advantages including the presence
of knowledge workers India is an example
lowcost capital and Powerful highly
networked conglomerates of homegrown
firms these Trends are in increasing the
importance of emerging markets in the
world economy in addition Emerging
Markets are giving birth to a new class
of multinational Enterprise the new
Global Challengers large companies that
are fast becoming key contenders in the
global Marketplace China is the largest
emerging market with a population of 1.3
billion people 1 of the world total
China has been growing its economy at an
impressive rate often 10% a year China
is home to numerous new Global
Challengers such as Shanghai Automotive
China's top automaker sopek a giant oil
company and Shanghai bow steel a large
steel manufacturer other Emerging
Markets are giving birth to new Global
Challengers as well in Mexico sex is one
of the world's largest cement
producers in Russia Luke oil has big
Ambitions in the global energy sector in
Turkey Diversified conglomerate coach
holding owns Arch lick a giant Home
Appliance
producer Brazil is home to several new
Global Challengers Brazil's Embraer
builds Innovative small Jets and has
zipped past Canada's Bombardier to
become the world's biggest producer of
smaller jet aircraft the Brazilian food
processors Saadia and pertigo exemplify
the international entrepreneurship of
the new Global Challengers each is a $2
billion Enterprise and exports about
half of its annual
production Brazil's abundant resources
for producing pork poultry and Grains
and its ideal growing conditions for
animal feed provide these companies with
many
advantages both Sadia and pertigo also
have worldclass global distribution and
Supply Chain management systems for
product categories and Frozen Foods
cereals and ready to eat meals other new
Global Challengers have leveraged local
bases of Natural Resources Russia's
rusal is extracting the country's Rich
reserves of boxes to become a major
producer of aluminum for World Markets
the vast majority of the world's natural
resources are located in developing
economies and a growing number of new
Global Challengers use those resources
to their advantage the new Global
Challengers obtain other advantages by
employing Home Country lowcost labor as
well as engineering and managerial
talent that sometimes exceeds those of
their counterparts in the advanced
economies the success of the new Global
Challengers suggests that the character
of international trade and investment is
Shifting today there are many more
Emerging Market firms active on the
world stage they possess distinct
advantages and are becoming key
competitors to mes from advanced
economies globalization is the most
important Trend in international trade
and investment it is bringing with it an
array of New Opportunities and
challenges companies must prepare
themselves to thrive in this new global
environment
[Music]
[Laughter]
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