This course has three integrated goals: First, to give you a basic grounding in global business so you can understand and analyze events and trends in the global business environment and their impact on managerial decision making; Second, to help you understand the analytical frameworks on strategy formulation and implementation in an international context. Third, the course aims to develop your practical skills in applying global strategic analysis tools in business situations through a series of case discussions and a local product internationalization project. It aims to help you serve and lead in globalized business organizations.

1. GLOBALBUSINESS & STRATEGY
Lecture
The Spatial Impact of Globalisation

2. Learning
Outcomes
After the lecture you will be able to: 
◦ Identify the aggregate trends in global
economic activity
◦ Analyse the global shifts in production,
trade and investment
◦ Learn the development of the global triad
◦ Investigate on the regionalisation and
localisation
◦ Investigate the trans border clusters of
economic activity

3. DIFFERENT DIMENSIONS OF THE NEW GLOBAL
COMPETITIVE ENVIRONMENT
GLOBAL
LOCAL
REGIONAL
Global economy
Global output
Global trade and investment
National output, trade & investment
Competitive advantage of nations
Regionalism
Regional trade & investment
The triad (Is this imposing
problems for the developing
countries)

4. THE GLOBAL DIMENSION OF INTERNATIONAL BUSINESS
In the 1960s the US economy
dominates
US firms accounted for the majority of FDI
US firms majority of large multinationals – (2011 status)
Roughly half the world (centrally planned economies) closed
to Western business
But ...By the mid 1990s US share of world output had halved

5. THE GLOBAL
DIMENSION OF
INTERNATIONAL
BUSINESS
◦ Major share of output taken by European
and East Asian economies
◦ Collapse of communism in Europe
◦ Economic liberalisation in China/India
◦ EMEs as production locations
◦ Emerging market multinationals (Embraer,
a Brazilian firm that has recently become
the largest maker of regional jet
aircraft/Haier of China has become a
powerhouse in household
appliances/Taiwan's Acer, the world's
second-largest computer brand
◦ Emerging market economies as markets

7. GLOBAL MAP OF
INWARD AND
OUTWARD FDI
INVESTMENT

8. USA
◦ World biggest FDI investor
◦ Largest exporter of commercial
services & agricultural products
◦ 2nd largest exporter of manufactured
goods
◦ 15% of agricultural production
◦ Europe is the most important
destination for the USA FDIs. (1/2)
◦ Asia & Mexico – important
destinations of FDI

9. Europe
◦ The world biggest trading area.
◦ Germany -1, UK – 2, France – 3
◦ Considerable differences in trade
performance between individual
European countries.
◦ More than 2/3 of European trade is
intra-regional
◦ North America- most important
export destination

11. ◦ East Asian Economies are more
significant as exporters
◦ Japan bashing – China bashing
◦ Huge cheap labour force
◦ Economy is unusually open to trade
◦ China growth rate – 10% (highest)

12. • Emergence of transitional economies
– Russian Federation
– Poland
– Czech Republic
– Hungary
• Latin America
– Most resource rich countries
– Brazil (largest agricultural surplus)
• Persistent Peripheries (Sub-Saharan
Africa)
– Economic growth remains very limited
– Deepest poverty & deprivation
– Social challenges

13. Networks of Trade

14. THE LOCAL
(NATIONAL)
DIMENSION
◦The competitive advantage
of nations
◦Porter’s Diamond
◦Industry clusters

15. PORTER’S DIAMOND MODEL (1)
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16. Video -
https://www.youtube.com/watch?v=vVzco0yZl88

17. PORTER’S DIAMOND MODEL (2)
Factor conditions
Specialised pool of labour
Specialised infrastructure
Demand
Local customers push companies to innovate
Tastes anticipate global demand
Related and supporting industries
Internationally competitive supplier industries
High quality, supportive business infrastructure, and
Spurs innovation and spin-off industries

18. PORTER’S DIAMOND MODEL (3)
Firm, strategy, structure and rivalry
Intense local rivalry among local
industries spurs innovation
Government
National
Regional/local

19. What Are Industry
Clusters?
Geographic
concentrations of
competing,
complementary, or
interdependent firms
◦ Interconnected companies,
suppliers, service providers,
institutions (universities)
◦ Country/region/city
◦ Common needs for talent,
technology, and infrastructure
◦ Increase productivity with
which companies can compete

20. How Do Clusters
Arise?
◦Enough resources and
competencies amass and
◦reach a critical threshold
◦This gives a key position in a given
industrial activity
◦Sustainable competitive advantage
over other locations
◦Can give global supremacy in that
activity
◦Role of government

21. Clusters and
Competitiveness
◦ Increase the productivity of companies based
in the area
◦ External economies of scale
◦ Drive the direction and pace of innovation
◦ Stimulate the formation of new businesses
within the cluster
◦ Attract FDI
◦ Knowledge based competition

22. Now you are able to;
◦ Identify the aggregate trends in global
economic activity
◦ Analyse the global shifts in production,
trade and investment
◦ Learn the development of the global
triad
◦ Investigate on the regionalisation and
localisation
◦ Investigate the trans border clusters of
economic activity

23. THANK YOU