Viewpoints on globalization

Question 1

Explain Levitt T, 1983

Answer 1

Companies mustlearn
to operate
as if the world were
one large market -
ignoring superficial regional and
national differences

Assumption: If a company forces costs and prices down and pushes quality and reliability up (and reasonable concern for suitability= - customers will prefer is world-standardized products.

1.“Two vectors are shaping the world: Technology and Globalization”,

2,Technology determine human preferences; globalization determine economic realities

3. “Companies that do not adopt to the new global realities will become victims of those that do

Question 2

Explain Ghemawat, 2003 viewpoint on globalization

Answer 2

We are not completely seperated or completely integrated - somewhere in the middle.

Its a complex situtaiton. Neither the barriers nor the links among markets in different countries can be neglected

Question 3

Explain how Tesla according to Levitt T, should make a global expansion

Answer 3

Levitt = standardized products.

Global expansion = When to go where. Define the level of resources the firm is wiling to commit and decide on the rate of entry.
Basic considerations + detailed consideration.
-> could argue for both concentration and diversification strategy

Detailed considerations:
- Many custumer segements, since global custumer preferences are converging.

Question 4

Explain the difference between Ghemawat’s semiglobalization and Levitt T’s globalization theory.

Answer 4

According to Levitt. T’s firms should operate as it was one large market, Ghemawat diasgrees saying there is still substantial crossborder frictions