Yip identifies four sets of “industry globalization drivers” that underlie conditions in each industry that

create the potential for that industry to become more global and, as a consequence, for the potential
viability of a global approach to strategy. 1 Market drivers define how customer behavior distribution
patterns evolve, including the degree to which customer needs converge around the world,
customers procure on a global basis, worldwide channels of distribution develop, marketing
platforms are transferable, and “lead” countries in which most innovation takes place can be
identified. Cost globalization drivers—the opportunity for global scale or scope economics,
experience effects, sourcing efficiencies reflecting differentials in costs between countries or regions,
and technology advantages—shape the economics of the industry. Competitive drivers are defined
by the actions of competing firms, such a s the extent to which competitors from different continents
enter the fray, globalize their strategies and corporate capabilities, and create interdependence
between geographical markets. Government drivers include such factors as favorable trade policies,
a benign regulatory climate, and common product and technology standards.

Market drivers

One aspect of globalization is the steady convergence of customer needs. As customers in different
parts of the world increasingly demand similar products and services, opportunities for scale arise
through the marketing of more or less standardized offerings. How common needs, tastes, and
preferences will vary greatly by product and depend on such factors as the importance of cultural
variables, disposable incomes, and the degree of homogeneity of the conditions in which the product
is consumed or used. This applies to consumer as well as industrial products and services. Coca-
Cola offers similar but not identical products around the world. McDonald’s, while adapting to local
tastes and preferences, has standardized many elements of its operations. Software, oil products,
and accounting services increasingly look alike no matter where they are purchased. The key to
exploiting such opportunities for scale lies in understanding which elements of the product or service
can be standardized without sacrificing responsiveness to local preferences and conditions.
- Thị trường càng lớn -> không phụ thuộc quá nhiều vào các yếu tố
- Thu hút khách hàng nước ngoài -> show tiềm năng -> thu hút vốn đầu tư
Global customers have emerged as needs continue to converge. Large corporations such as
DuPont, Boeing, or GE demand the same level of quality in the products and services they buy no
matter where in the world they are procured. In many industries, global distribution channels are
emerging to satisfy an increasingly global customer base, further causing a convergence of needs.
Finally, as consumption patterns become more homogeneous, global branding and marketing will
become increasingly important to global success.
Cost

The globalization of customer needs and the opportunities for scale and standardization it brings will
fundamentally alter the economics of many industries. Economies of scale and scope, experience
effects, and exploiting differences in factor costs for product development, manufacturing, and
sourcing in different parts of the world will assume a greater importance as determinants of global
strategy. At bottom is a simple fact: a single market will no longer be large enough to support a
competitive strategy on a global scale in many industries.
Global scale and scope economics are already having far-reaching effects. On the one hand, the
more the new economies of scale and scope shape the strategies of incumbents in global industries,
the harder it will be for new entrants to develop an effective competitive threat. Thus, barriers to
entry in such industries will get higher. At the same time, the rivalry within such industries is likely to
increase, reflecting the broadening scope of competition among interdependent national and
regional markets and the fact that true differentiation in such a competitive environment may be
harder to achieve.
Competitive
Industry characteristics—such as the degree to which total industry sales are made up by export or
import volume, the diversity of competitors in terms of their national origin, the extent to which major
players have globalized their operations and created an interdependence between their competitive
strategies in different parts of the world—also affect the globalization potential of an industry. High
levels of trade, competitive diversity, and interdependence increase the potential for industry
globalization. Industry evolution plays a role, too. As the underlying characteristics of the industry
change, competitors will respond to enhance and preserve their competitive advantage. Sometimes,
this causes industry globalization to accelerate. At other times, as in the case of the worldwide major
appliance industry, the globalization process may be reversed.

Government

Government globalization drivers—such as the presence or absence of favorable trade policies,

technical standards, policies and regulations, and government operated or subsidized competitors or
customers— affect all other elements of a global strategy and are therefore important in shaping the
global competitive environment in an industry. In the past, multinationals almost exclusively relied on
governments to negotiate the rules of global competition. Today, however, this is changing. As the
politics and economics of global competition become more closely intertwined, multinational
companies are beginning to pay greater attention to the so-called nonmarket dimensions of their
global strategies aimed at shaping the global competitive environment to their advantage (see the
following section). This broadening of the scope of global strategy reflects a subtle but real change in
the balance of power between national governments and multinational corporations and is likely to
have important consequences for how differences in policies and regulations affecting global
competitiveness will be settled in the years to come.