 |
 |
|
GSM Lecture 6Management > Global Strategic Management > 2x2 matrix > Pressures >Global integration
Pressures for global integrationMultinational customers - Pressures for global integration are due to the importance of multinational customers. The dependence of customers on a global basis means that firms must co-ordinate their activities globally. Competitors - There is also the presence of global competitors, which means that companies need to improve their global co-ordination in order to compete. Investment intensity - In addition, there is a need to recoup large investment costs, for example R&D, which increases the need for global co-ordination. Technology intensity - The development of high technology products and processes are best centralised in a few locations, requiring concentrated configuration of activities. Cost reduction - The pressure for cost reduction means that global integration is more necessary for a firm to benefit from various economies of scale. Universal consumer needs - The increasing availability of technologies and products in the world means that consumer needs are converging, leading to the standardisation of products that facilitates globally-integrated operations. Access to raw materials - Finally, pressures for global integration stems from increased accessed to raw materials and cheap energy, which can be achieved if manufacturing is concentrated in a single area, remote from other activities, thus requiring integration and co-ordination. In conclusion it appears that the drivers of globalisation are partly general and partly industry-specific.
Pressures for local responsiveness
|
|
