drivers of globalisation
The drivers of globalisation are those pressures or changes that have impelled both businesses and nations to adopt this approach. There are four different drivers:
1. Cost drivers
These seek out an advantage to a business from the possible lowering of the cost of the service or production, and would include: gaining economies of scale from increasing the size of the business operation; the development and growth of technological innovation; lower labour and other resource costs in developing countries; fast and efficient transportation systems with the development of improved infrastructure.
2. Market drivers
The development of a world market brings about changes in the demands and tastes of the consumer by: the establishment of global brands which have instant recognition and are created and supported by global advertising and marketing (for example, McDonald’s fast-food outlets, Nike trainers and sportswear, and Levi jeans); increasing low-cost travel which begins to create the idea of global consumers with a growing convergence of lifestyles and tastes; growing per capita income which increases the purchasing power of consumers both individually and organisationally.
3. Government drivers
Here nations work together to increase the possibility of trading activities in their international trade to create economic advantage and wealth. This can be brought about by: a reduction in trade barriers through the removal of tariffs to imports and exports; the creation of trading blocs to bring about closer co-operation and economic activity between nations; for example, the World Trade Organisation, the EU; the creation of more open and freer economies as a result of, for example, the ending of the closed economies of Eastern Europe and the relaxation of the Chinese economy; privatisation of previously centrally controlled industries or organisations: examples include the UK policy of the 1980s and 1990s of selling off to private
1. Cost drivers
These seek out an advantage to a business from the possible lowering of the cost of the service or production, and would include: gaining economies of scale from increasing the size of the business operation; the development and growth of technological innovation; lower labour and other resource costs in developing countries; fast and efficient transportation systems with the development of improved infrastructure.
2. Market drivers
The development of a world market brings about changes in the demands and tastes of the consumer by: the establishment of global brands which have instant recognition and are created and supported by global advertising and marketing (for example, McDonald’s fast-food outlets, Nike trainers and sportswear, and Levi jeans); increasing low-cost travel which begins to create the idea of global consumers with a growing convergence of lifestyles and tastes; growing per capita income which increases the purchasing power of consumers both individually and organisationally.
3. Government drivers
Here nations work together to increase the possibility of trading activities in their international trade to create economic advantage and wealth. This can be brought about by: a reduction in trade barriers through the removal of tariffs to imports and exports; the creation of trading blocs to bring about closer co-operation and economic activity between nations; for example, the World Trade Organisation, the EU; the creation of more open and freer economies as a result of, for example, the ending of the closed economies of Eastern Europe and the relaxation of the Chinese economy; privatisation of previously centrally controlled industries or organisations: examples include the UK policy of the 1980s and 1990s of selling off to private