Global Business Environment
To date, our world market is dominated mostly by many well established global brands. Over the last three decades, there have been a steady trend of global market convergence – the tendency that indigenous markets start converge on a set of similar products or services across the world. The end-result of the global market convergence is that companies have succeeded on their products or services now have the whole wide world to embrace for their marketing as well as sourcing.
To date, our world market is dominated mostly by many well established global brands. Over the last three decades, there have been a steady trend of global market convergence – the tendency that indigenous markets start converge on a set of similar products or services across the world. The end-result of the global market convergence is that companies have succeeded on their products or services now have the whole wide world to embrace for their marketing as well as sourcing.
The rationale of global market convergence lies partially in the irreversible growth of global mass media including Internet, TVs, radios, news papers and movies, through which our planet has become truly a small global village. Everybody knows what everybody else is doing, and everyone wants the same thing if it is perceived any good. It also lies in the rise of emerging economic powers led by BRICs (Brazil, Russia, India and China), which has significantly improved the living standard and the affordability of millions if not billions of people.
For organizations and their supply chains, the logic of going global is also clearly recognizable from economic perspective. They are merely seeking growth opportunities by expanding their markets to wherever there are more potentials for profit-making; and to wherever resources are cheaper in order to reduce the overall supply chain costs. Inter-organizational collaborations in technological frontier and market presences in the predominantly non-homogeneous markets can also be the strong drivers behind the scene.
For organizations and their supply chains, the logic of going global is also clearly recognizable from economic perspective. They are merely seeking growth opportunities by expanding their markets to wherever there are more potentials for profit-making; and to wherever resources are cheaper in order to reduce the overall supply chain costs. Inter-organizational collaborations in technological frontier and market presences in the predominantly non-homogeneous markets can also be the strong drivers behind the scene.
One can also observe from a more theoretical perspective that the trends of globalization from Adam Smith’s law of “division of labour”. A global supply chain is destined to be stronger than a local supply chain because it takes the advantage of the International Division of Labor . Surely, the specialization and cooperation in the global scenario yields higher level of economy than that of any local supply chains. Thus the growth of global supply chain tends to give rise to the need for more coordination between the specialized activities along the supply chain in the global scale.
As the newly appointed Harvard Business School dean professor Nitin Nohria said “If the 20th century is American’s century, then the 21st century is definitely going to be the global century.” The shift of economic and political powers around world is all too visible and has become much more dynamic and complex. But, one thing is certain that there will be significantly and increasingly more participation of diverse industries from all around the world into the global supply chain network; hence bringing in the influences from many emerging economies around the world. Their roles in the globally stretched network of multinational supply chains are going to be pivotal and will lead towards a profoundly changed competitive landscape.
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