1. Drivers ,Globalization of market, production, investment, technology Presented by: AnmolNekpuri PGDM III 11/25/2010 2:10 PM 1 Xavier Institute - Jabalpur

2. globalization Globalization: An ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade. The term is sometimes used to refer specifically to economic globalization: The integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. 11/25/2010 2:10 PM 2 Xavier Institute - Jabalpur

3. Drivers of Globalization Drivers of Globalization Two macro factors seem to underlie the trend toward greater globalization Decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II Technological change. 11/25/2010 2:12 PM Xavier Institute - Jabalpur 3

4. Components of Globalization Globalization of Market Globalization of Production Globalization of Investment Globalization of Technology 11/25/2010 2:12 PM 4 Xavier Institute - Jabalpur

5. Globalization of Markets Globalization of markets refers to the process of integrating and merging of the distinct world markets into a single market. This process involves the identification of some common norm, value, taste, preference and convenience and slowly enables the cultural shift towards the use of common product or service. 11/25/2010 2:10 PM 5 Xavier Institute - Jabalpur

6. Features of Globalization of markets The size of the company need not to be large to create a global market. Even small companies can create a global market . The distinction of global market are still prevailing even after the globalization of market. These distinction require the companies to formulate different strategies for each market. 11/25/2010 2:10 PM 6 Xavier Institute - Jabalpur

7. Most of the foreign markets are the markets for non consumer goods like machinery, equipments, raw material, software etc. The global business firms compete with each other frequently in different national markets including their home markets. 11/25/2010 2:10 PM 7 Xavier Institute - Jabalpur

8. Reasons for Globalization of Market Large scale industrialization enabled mass production. Company in order to reduce the risk diversify the portfolio of countries. To cater to the demand for their product in foreign market. Companies globalize markets in order to increase their profits and achieve company goals. 11/25/2010 2:10 PM 8 Xavier Institute - Jabalpur

9. Globalization of Production Factors influencing the location of manufacturing facilities vary from country to country. They may be more favorable in foreign countries rather than in home country. 11/25/2010 2:10 PM 9 Xavier Institute - Jabalpur

10. Reasons for globalization of production Imposition of restrictions on imports by the foreign countries forces the MNC’s to establish manufacturing facilities in other countries. Availability of high quality raw materials. Availability of inputs at low cost in foreign countries. To reduce the cost of transportation and easy logistic management. 11/25/2010 2:10 PM 10 Xavier Institute - Jabalpur

11. Globalization of investment Globalization of investment refers to investment of capital by a global company in any part of the world. Global company conducts the financial feasibility of the new projects in different countries of the world and invest the capital in that country where it is relatively more profitable Globalization of investment is also known as Foreign direct investment. 11/25/2010 2:10 PM 11 Xavier Institute - Jabalpur

12. Reasons of Globalization of investment There has been a rapid increase in globalization of trade. Many countries provided more congenial environment for attracting direct investment. Limitations of exporting and licensing force the domestic companies to enter foreign markets through FDI. 11/25/2010 2:10 PM 12 Xavier Institute - Jabalpur

13. Cont…. Liberalizing the measures of flow of foreign capital across the borders of various countries. Global companies in order to have the control over manufacturing and marketing activities , invest in the foreign country. 11/25/2010 2:10 PM Xavier Institute - Jabalpur 13

15. Cont…. The foreign companies allow the companies of various other countries adopt their technology on royalty payment basis or on outright purchase basis. Company also globalize the technology through the modes of joint ventures and mergers. 11/25/2010 2:10 PM 15 Xavier Institute - Jabalpur

16. How technology fastens the process of globalization? Microprocessors and telecommunication The Internet and world wide web On-line globalization Transportation technology 11/25/2010 2:10 PM 16 Xavier Institute - Jabalpur

17. THANK YOU 11/25/2010 2:10 PM 17 Xavier Institute - Jabalpur