By: Tommy Campbell
Globalization is defined as the integration of the world economy into one market. Globalization has gone through four phases: Globalization 1.0-4.0. In globalization 1.0, the driving force of that era was countries globalizing by imperial conquest to gain resources and wealth. In globalization 2.0, the era was characterized by the standardization of production and the market through the globalization of production and markets. In globalization 3.0, it was characterized by the differentiation that sets MNC’s and individuals apart through global marketing, core competency, and social media. And in globalization 4.0, it was characterized by the dissemination of information info across subsidiaries, worldwide. International business activities have had to adapt accordingly has each phase progressed.
In section II, examples from WSJ articles of the globalization phases and techniques of 2.0 through 4.0 will be analyzed by the ways they influence international business activities. In section 2.1, globalization is defined and illustrated by Ford’s plan to increases its presence in Europe and African companies adjust to the Wal-Mart way. In section 2.2, globalization 3.0 is defined and illustrated by McDonald’s plan to open vegetarian-only restaurants in India, Facebook and Instagram’s differentiation through utilizing core competency and social media along with acquisitions, Apple’s new virtual ‘radio stations’, mobile devices being used to stir-up the retail industry, and the growing frenzy surrounding the Apple iPhone 5. In section 2.3, globalization 4.0 is defined and illustrated by Amazon releasing their reinspired Kindle Fire HD tablets, Twitter allowing more specific advertisements based on users interests, the new iPhone 5 moving towards a new LTE technology, and e-commerce in China is growing at an astounding speed. In section III, concluding remarks and overall perception of globalization and how it affects international business activities are discussed. II. Globalization
2.1 Globalization 2.0
From 1800 to 2000, Globalization 2.0 the world shrank from size medium to size small, and it was spearheaded by MNC’s practicing standardization by reaping the benefits of economies of scale—cost advantage associated with large scale production. The two types of globalization that occurred during this period were the globalization of production through product standardization and the globalization of markets which reduced multiple markets into one market for multiple countries reducing costs. For instance, Wal-Mart is one of world’s largest supermarkets. The company has stores in almost every country around the world. Companies is Africa are having to adjust their prices and production in order to meet the goal set by Wal-Mart. Companies are “ramping up production, rolling out advertising campaigns and sweating over whether they can sell at discounted prices for extended periods. Wal-Mart is a percent example of providing for one global homogenous consumer. This article describes the challenges faced by Foodcorp and Massmart Holdings Ltd., which are both big businesses who are adapting to the “Wal-Mart Way”. Also, Ford is planning to introduce “Several new vehicles in Europe over the next two years while reducing losses and cutting risk in the economically troubled region. The company will be producing a “new Fiesta compact and new Kuga compact sport-utility vehicle” (Ramsey). Ford is demonstrating globalization 2.0 by uniting the world into one market. Consumers who live in Europe want to be able to purchase an American car and vice versa. The world is moving closer towards one homogenous market every day and Ford is just another example of the progress made in the last decade.
2.2 Globalization 3.0
Starting in 2000, Globalization 3.0 shrunk the world from size small to a size tiny. In globalization 3.0, individuals and small groups become...