This document discusses factors driving globalization and the implications for businesses. It notes that technology has reduced distances, and factors like IT, transportation, and trade policies have accelerated globalization. This creates intensifying competition for companies from around the world. The document also notes that most of the world's population and GDP now lies outside the US, and educational and income factors are shaping global consumption. It outlines six imperatives for global business success and emphasizes the importance of designing global supply chain networks that consider compatibility, configuration, coordination, and control across culturally diverse markets.

1. POVERTY REDUCTION &
HUMAN DEVELOPMENT
Scanning and Global Supply
Chain Design
Arsala Khan

2. Globalization of Markets

3. Factors of Globalization
• Technology has overcome much of the
distance created by geography and culture.
• The pace of globalization depends on:
1. Advances in information and communication
technology
2. Availability of reliable transportation
3. Reduction of protectionist trade policies

4. Globalization’s Implications
1. Intensifying competition
e.g. Nokia and unilever possess capital and technology needed
to challenge rivals around the globe.

5. Importance of Global Markets
 95% the world’s population lives outside the U.S.
 80% of the world’s gross domestic product is
produced outside the U.S.
 50%+ of the population is under 20 years old in
many countries
 Educational background and disposable income
are prime factors motivating consumption
decisions
 US companies earned $315 billion profits
overseas in 2004, up 78% over the past decade.

6. Importance of Global Markets
$3,000,000
$2,891,500
$2,500,000
$2,000,000
$1,820,641
$1,500,000
$1,493,400
m
o
n
s
$
$1,000,000
l
i
$771,994
$575,204
$387,401
$500,000
$299,490
$147,832 $219,183
$-
1990 1995 2000
Years
Global Sales of U.S. Foreign Affiliates U.S. Exports - Goods U.S. Exports - Services

7. Global Business is Different
Managers must consider four differences between
Global and domestic operations.
1. Politics –political stability and undercurrents that
might jeopardize global business strategies.
2. Legalities – requires competent legal counsel
3. Finance – exchange rate risk and hedging; taxation
issues
4. Culture –must adapt to local views on time, personal
space, worker/manager relations, individual
accountability, etc.

8. Six Globalization Imperatives

9. • EMPLOYMENT GENERATION &
EMPLOYMENT GENERATION & CREATION OF PHSICAL
ASSETS
CREATION OF PHSICAL ASSETS
Six imperatives are shaping the global competitive
landscape:
2. Establish a Triadic Presence – companies need to
operate in the three major world markets – U.S., E.U.
and Asia
3. Utilized Beachheads – use operations in industrialized
countries as bridges into emerging markets

10. Six Globalization Imperatives
3. Achieve Seamless Performance Across Markets –
deliver the same high quality product with the same
excellent service everywhere
4. Extend Reach Through Alliances – alliance partners
can provide market knowledge, technological
expertise, operational know-how, and/or financial
resources.

11. Six Globalization Imperatives
1. Compete in Competitors Home Market –
competition prevents cross profit subsidization
2. Coordinate Global Activities – cross-
pollination of ideas creates synergy while
reducing redundancy

12. Designing a Global Network
To insure access to customers and worldwide resources,
companies are increasingly creating worldwide supply chain
networks.
Resources within the supply chain need not be owned by a
single entity.

13. Designing a Global Network
To insure supply chains are properly designed four
criteria should be considered:
4.Compatibility – need to align network design
decisions with company’s overall strategy
5.Configuration – need to identify and consider
issues that will affect network performance
when deciding where to locate value added
activities

14. Designing a Global Network
3.Coordination – need to direct and integrate
geographically dispersed activities
4.Control – need for consistent and proper day-to-
day decision-making at local value added
facilities

15. THANK YOU!

16. QUESTIONS?