Yip's Model
DIAGNOSING INDUSTRY GLOBALIZATION POTENTIAL
(Excerpts from G. Yip’s Total Global Strategy)
Industry globalization drivers are the underlying conditions in each industry that create the potential for using global strategy. Here we will examine each driver in more depth.
To achieve the benefits of globalization, the managers of a worldwide business need to recognize when industry conditions provide the opportunity to use global strategy levers. These industry conditions can be grouped in four categories of globalization drivers: market, cost, government, and competitive. Each key industry globalization driver affects the potential use of global strategy levers (global market participation, global products and services, global location of activities, global marketing, and global competitive moves). The drivers are as follows (See Figure 1):
Market Globalization Drivers
1. Common customer needs 2. Global customers 3. Global channels 4. Transferable marketing 5. Lead countries
Cost Globalization Drivers
6. Economies of Scale 7. Steep Experience Curve 8. Country Comparative Advantages 9. Decreasing transportation costs 10. Decreasing communication costs
Government Globalization Drivers
11. Favorable trade policies 12. Compatible technical standards 13. Common marketing regulations 14. Government-owned competitors and customers 15. Host government concerns
Competitive Globalization Drivers
16. High exports and imports 17. Competitors from different continents 18. Interdependence of countries 19. Competitors globalized
Industry globalization drivers relate to, but are different from, the industry competitive forces identified by Michael E. Porter; threat of entry, rivalry among existing firms, pressure from substitute products or services, bargaining power of suppliers, and bargaining power of buyers.[i] In most cases, but not always, increases in
(Excerpts from G. Yip’s Total Global Strategy)
Industry globalization drivers are the underlying conditions in each industry that create the potential for using global strategy. Here we will examine each driver in more depth.
To achieve the benefits of globalization, the managers of a worldwide business need to recognize when industry conditions provide the opportunity to use global strategy levers. These industry conditions can be grouped in four categories of globalization drivers: market, cost, government, and competitive. Each key industry globalization driver affects the potential use of global strategy levers (global market participation, global products and services, global location of activities, global marketing, and global competitive moves). The drivers are as follows (See Figure 1):
Market Globalization Drivers
1. Common customer needs 2. Global customers 3. Global channels 4. Transferable marketing 5. Lead countries
Cost Globalization Drivers
6. Economies of Scale 7. Steep Experience Curve 8. Country Comparative Advantages 9. Decreasing transportation costs 10. Decreasing communication costs
Government Globalization Drivers
11. Favorable trade policies 12. Compatible technical standards 13. Common marketing regulations 14. Government-owned competitors and customers 15. Host government concerns
Competitive Globalization Drivers
16. High exports and imports 17. Competitors from different continents 18. Interdependence of countries 19. Competitors globalized
Industry globalization drivers relate to, but are different from, the industry competitive forces identified by Michael E. Porter; threat of entry, rivalry among existing firms, pressure from substitute products or services, bargaining power of suppliers, and bargaining power of buyers.[i] In most cases, but not always, increases in