International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
Despite the fact that globalisation is taking place very rapidly, all the
countries are not equally integrated into the global economy still. Some key
indicators to measure the global integrated into the global economy still.
Some key indicators to measure the global integration of any country’s
economy are exports and imports as a ratio of GDP, inward and outward
flow of foreign direct investment and portfolio investment, and flow of
royalty and know-how payments associated with technology transfer. The
growths of China and India with respect to some of these indicators during
the last two decades ensure that they will emerge as major global players.
At the level of a specific industry globalization refers to the strength
of a company in the face of international competition. The more global an
industry, the greater is the face of international competition. The more global
an industry, the greater is the advantage that a company can derive from
leveraging technology, manufacturing and brand names.
Specific industries which are on the verge of globalization co-ordinate
their strategic actions across countries. For example, the athletic footwear
industry is dominated by the firms of Nike, Reebok and Adidas. In the same
way Armani, Versace and Vanity Fair are looking at global markets and
strategizing their activities with new vigour. Currently Wal-Mart, Mark &
Spencer and TESCO chains are integrating by cost effective sourcing. The
current aggressiveness of Vodafone to dominate in the communication area
especially in Asia is daring and expensive globalization in non conventional
sector.
SOME LESSONS FROM GLOBAL COMPANIES
Toyota is a good example of a highly globalised company. At the end
of 1995 one-third of Toyota’s global output came from wholly or partially
owned affiliates located in twenty-five foreign countries spread over North
and South America, Europe and Asia.
Furthermore, Toyota exported 38 percent of its domestic production
from Japan to foreign markets and engaged in significant intro-firm flows
among its affiliates. Within its South East Asian regional network Toyota
exported diesel engines from Thailand, transmissions from the Philippines,
steering gears from Malaysia and engines from Indonesia. In effect units
were set up by Toyota in the whole of South East Asia, to assemble different
automobile parts, depending on the competency and resources of the
country.
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