The Is The World Still Not Homogenous? How Does This Influence The Decisions Made By Multinational Companies?

The substantial part of the article concentrates on the way companies and their managers should embrace contemporary multinational market. The author claims: “Adaptation strategies are better suited to opportunities opened by the shift in the locus of teh global growth. (..)Western markets must compete in big emerging markets like China and India. But they can;t forcé their way in.” That is why, it is critical to pay careful attention to political, economic, or cultural diversity. Ghemawat is skilled in giving pieces of advice to those who underestimate the importance of countries differences and similarities. He also says: “I propose that every MBA gradúate – and presumably every global manager – have a mínimum body of globalization related knowledge, including (..)an understading of how differences between countries can influence cross-border interactions; awareness of the benefits of teh additional cross-border integration’.

Finally, globalization has given way to human development through culture integration, information sharing, and competition between countries. As people disperse from their native countries they take with them their culture and ideologies. At the same time technology is rapidly advancing, allowing information to be instantaneously shared across the globe. These events culminate in the diversification of society. As opposed to living with one view of the world people can now choose from any number of beliefs or views and find others that share them.

As an illustration, maintaining domestic equity status and raising global capital are the core aspects for MNEs to retain sufficient cash flows, merger and acquisitions, forming strategic alliances and other business activities to achieve their long term goals. In order to reach these goals, MNEs need to implement necessary steps which include to examine market segmentation, forming strategic alliance, issuing stocks and bonds to raise relevant capital and conduct other meaningful strategies to support their financial outlooks accordingly.

Success in world competition turns on efficiency in production, distribution, marketing, and management, and inevitably becomes focused on price. The most effective world competitors incorporate superior quality and reliability into their cost structures. They sell in all national markets the same kind of products sold at home or in their largest export market. They compete on the basis of appropriate value- the best combinations of price, quality, reliability, and delivery for products that are globally identical with respect to design, function, and even fashion. If a company forces costs and prices down, and pushes quality and reliability up, while maintaining reasonable concern for suitability, customers will prefer its world-standardized products. The global competitor will seek constantly to standardize his offering everywhere. The strategy of standardization not only responds to the worldwide homogenized markets but also expands those markets with aggressive low pricing.

The article is divided into four parts. First part focuses on the traditional perspective on international marketing strategies focusing on the dichotomy between standardization and adaptation. The second part examines key assumptions underlying the philosophy of global standardization. The third part focuses on the constraints to implementation of global standardization. The last part of the article concludes on the bases of its review that a more general approach is suitable which incorporates various degrees of standardization or adaptation strategies. It is an important article as it concludes that an effective global marketing strategy does not guarantee the marketing of standardized products and global brands worldwide. It might work for some companies but cannot work for all.

In the book, International Business: Theory and Practice, Verizon-MCI in its domestic environment, the United States, is placed in the cultural cluster with the Anglo countries. This cluster consists of Australia, Canada, United States, United Kingdom, Ireland, and South Africa. The company’s cultural cluster, for its global environment, China, is with the Far Eastern countries. This cluster includes China, Hong Kong, Indonesia, and the Philippines. These cultural clusters approaches are based on the countries’ geographic similarities. They are grouped together depending on the location of the people in the world. Each cluster demonstrates differences within each cluster, as well as, differences among the countries. These differences reflect that other factors should have been considered when the groups were placed together.

More people are exposed to different global cultures through vacation travel, transnational jobs, international conflicts or migration. In these circumstances business that was previously domestic, now has a global precedent. Therefore, countries, in order to work to their advantage, must engage diversity. Multicultural societies are ahead in years beyond monolithic societies. As a matter of fact, intercultural countries have to spend less time and resources, in order to prepare its human resources, than monolithic nations. For these reasons, intercultural societies are dynamic and flexible before unexpected changes of the international arena achieving a better performance in the long

New York Times columnist Thomas Friedman defines globalization as “the inexorable integration of markets, transportation systems, and communication systems to a degree never witnessed before – in a way that is enabling corporations, countries, and individuals to reach around the world farther, faster, deeper, and cheaper than ever before.” (Friedman, 2002). Corporations can no longer operate exclusively in one or two countries. Today’s markets are far too complicated and interdependent for that. As globalization expands managers spend more and more time navigating the world to conduct business.

The Coca-Cola Company is the world’s leading beverage company, with markets in over 200 countries and over 1,100 brands under their portfolio. The company was founded in 1886 and is currently headquartered in Atlanta, Georgia, USA. This paper seeks to explain the impact of globalization on the standardization versus adaptation decision using examples from the Coca-Cola Company’s performance and strategies since their inception as a company.

Lastly, religions play an important role too by gathering people scattered across the globe under an identical cosmology, thus creating imagined communities (Anderson, 1983). Globalization, by connecting people through the media, also creates such a community: inhabitants of the world share the idea of a global community and an international identity. This is why we could define globalization as the compression of time and space (Harvey, 1983). Communications as well as people can travel at an ever increasing speed, thereby giving the impression that every corner of the world is at hand. The main thesis about globalization argues that it leads to a phenomenon of homogenization. My hypothesis however is that some cultures are so different and so deeply rooted in their environment that they can't simply be erased. They will be modified, influenced but not standardized under one unique model. This will lead to hybrid products, thereby proving the hypothesis of glocalization, introduced by

The literature on international marketing presents a confrontation between two mainstream schools of thought regarding international marketing. The one supports the standardization approach and argues that multinational companies’ behavior should be uniform to minimize total costs and promote a global corporate image. The other argues for the need for adaptation to fit the unique dimensions of each local market. This research investigates companies’ practical level of adaptation and standardization in international markets. It identifies

Levitt explains, because of globalization, how the world is moving from the Era of Multinational Corporations to the Era of Global Corporations as the needs and wants of the worldwide customers are getting more and more homogeneous (Levitt, 1983) and they demand for more standardized products in terms of quality and price (Levitt, 1999). According to Theodore Levitt the companies who focus on a particular market in terms of providing value added products are most likely to achieve failure in this dynamic industrialized world and that’s why to survive with the competition in the market companies should focus on more standardized products by keeping in mind the different markets of the world and their common interest (Levitt, 1983, pg-6). The other main key point mentioned by Theodore Levitt was that the organizations should focus their concentration in knowing the requirements of the customers rather than presuming their needs by themselves and forcing the already manufactured

The objective of MNC to operate in other countries is to gain competitive advantage through several ways. Firstly, MNC is able to take advantage of difference in country-specific circumstances. For example, MNC may choose to locate its productions in less developed country like Vietnam to gain cheap labor cost. Secondly,

Management is involved at all levels of a business and is central to business more importantly in this globalised era. The functions of management outlined above are cardinal to any business. This paper will discuss the importance of management in a globalised business era.

Roberto Goizueta switched from localization strategy to global standardization strategy because during his initial control over the Coca Cola Company in 1980’s, the Coca Cola brand has already been marketed to more than 76 countries in the world and the subsidiaries were managed individually by the local management to match with the local taste and preference. This practice has given bad impact on the company profit as there were a lot of duplication of functions, smaller scale of production runs and too much of the customization which limits the ability of the firm to capture the cost reduction.The benefit of Global Standardization is the company will enjoy increased profitability and profit growth by reaping the cost reduction through economies of scale(produce in large quantity), learning effect (the production efficiency is improving from time to time as the worker become expert after repetitive sequence) and location economies (product’s value creation is done at the optimal location/environments). So by having the Global Standard, the product is produced at the most economic price and will create better perceived value for money spent by the customer.