Drivers of Global Business

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Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002

Drivers of International Business


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Copyright Atomic Dog Publishing, 2002


Drivers of International Expansion

Competition

Regional Economic and

Political Integration

Technology

Improvements in Transportation

and Telecommunication

Economic Growth

Transition to Market Economy Converging Consumer Needs


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Drivers of International

Expansion, continued

COMPETITION

McCann Erickson, the

advertising agency,

follows longtime client,Coke, to all countries

where company is

present


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Regional agreements suchas NAFTA, MERCOSUR,

and the European Unionlower and eliminate barriersand promote trade withincommon markets.

Subsidiaries are establishedin specific markets to takeadvantage of free tradewithin the region.

REGIONAL, ECONOMIC and POLITICALINTEGRATION


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TECHNOLOGY

Consumers

worldwide are

exposed to similarproducts, services,

and entertainment.

The Web and the

Internet have

revolutionized the

way companies

conduct business.


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Lower cost and higherquality communicationdue to satellite

technology,teleconferencing, ande-mail

Efficient transportation

due to containerizationand just-in-timetechnology



TRANSPORTATION and TELECOMMUNICATIONS


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Emerging middle classwith increasing buyingpower in big emergingmarkets such as Braziland India

Opening of new markets

previously closed, suchas the markets of Chinaand Vietnam

ECONOMIC GROWTH





Transition of the EasternBloc to a market economycreated important newmarkets

TRANSITION to a MARKET ECONOMY





Uniform consumer

segments emerging

worldwide: globalteenagers, global elite

CONVERGING CONSUMER NEEDS



Firm-Specific Drivers

Product Life Cycle Considerations: opportunity toprolong product lifecycle by entering growth markets.

Sales

Intro Growth Maturity Decline

Profits

Sales



Firm-Specific Drivers, continued

High New Product Development Costs:

Firm must look beyond home-country market to

recover investment costs



Price competition during maturity drives firm to newinternational markets


Standardization, Scale Economies, Cheap Labor

Intro Growth Maturity Decline

Sales

Profits

Sales

Time




Experience Transfers

Experience in one country serves as basis for strategies

in new international markets.


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Drivers of Global Business

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