Industry Globalization
Industry Globalisation
In this essay I am going to analyse the pressures for globalisation for two different industries using Yip’s globalisation drivers. The two industries I am going to research is the Airline industry, using British Airways for examples and the Fast food Industry, using examples from McDonalds. I will then try and evaluate how firm strategy has changed in response to globalisation pressures. Firstly we need to try and define what “globalisation†is and how a company is considered “globalâ€Â. Yip argues “a truly global company is one that not only does business in both the eastern and western hemispheres, but also in the northern and southern ones†(Yip and Lovelock,1996). Another definition is that “a global firm views all of its foreign entities as interrelated and conducts business on a worldwide basis†(Punnett & Ricks, 1992). Yip believes that more and more companies are being forced to become global to stay competitive and that there are various globalisation drivers that are increasing the need of companies to globalise their products and/or services.
Yip believes there are eight key drivers for industry globalisation. These include common customer needs, global customers, global channels, global economies of scale, favourable logistics, information technology, government policies and regulations, and transferable competitive advantage. Looking in detail at both the Airline and Fast food industries I am going to see what pressures are faced by these service industries using Yip’s drivers for globalisation.
Firstly there are common customer needs that need to be met. Customer tastes and needs are consistently changing and so industries with little changing customer tastes and needs across different countries gives that industry more potential to expand and gain globalisation. Both the fast food and airline industry’s are more likely to be successful in
In this essay I am going to analyse the pressures for globalisation for two different industries using Yip’s globalisation drivers. The two industries I am going to research is the Airline industry, using British Airways for examples and the Fast food Industry, using examples from McDonalds. I will then try and evaluate how firm strategy has changed in response to globalisation pressures. Firstly we need to try and define what “globalisation†is and how a company is considered “globalâ€Â. Yip argues “a truly global company is one that not only does business in both the eastern and western hemispheres, but also in the northern and southern ones†(Yip and Lovelock,1996). Another definition is that “a global firm views all of its foreign entities as interrelated and conducts business on a worldwide basis†(Punnett & Ricks, 1992). Yip believes that more and more companies are being forced to become global to stay competitive and that there are various globalisation drivers that are increasing the need of companies to globalise their products and/or services.
Yip believes there are eight key drivers for industry globalisation. These include common customer needs, global customers, global channels, global economies of scale, favourable logistics, information technology, government policies and regulations, and transferable competitive advantage. Looking in detail at both the Airline and Fast food industries I am going to see what pressures are faced by these service industries using Yip’s drivers for globalisation.
Firstly there are common customer needs that need to be met. Customer tastes and needs are consistently changing and so industries with little changing customer tastes and needs across different countries gives that industry more potential to expand and gain globalisation. Both the fast food and airline industry’s are more likely to be successful in
References: Yip, George S. (2003) Total Global Strategy 11 Pearson Education,London. Schlie, E and Yip, G. (2000) “Regional Follows Global: Strategy Mixes in the World Automotive Industry,†European management journal, 18 (4), 343-354, Lovelock, Christopher H. and Yip, George S. (1996)†Developing global strategies for service businesses†, California Management Review, 38 (2), 64-87. Hatch, M,J, and Shultz, M.(2003), “Bringing the corporation into corporate branding†, European journal of marketing, Vol.37, No. 7/8, pp. 1041-64, ISSN 0309-0566 BBC World Service.com, (http://www.bbc.co.uk/worldservice/specials/1616_fastfood/page9.shtml) Punnett,B,J & Ricks,D,A, (1992), International Business, Wadsworth Publishing company, Belmont, California.