Business Environment regarding Regionalization and Globalization: a case study for IKEA
Business environment changed dramatically in last decade as emerging markets came into the world economy and began to play a very important role. Levitt (1983) has predicted the world economy will eventually become globalized, which means standardized consumer products are sold in the same manner everywhere, and the tastes and preferences of consumers turn to irrevocably homogenized. However, in 20th century most of globalized firms faced by a serious challenge. In late 1990, global brands were losing its luster whereas consciousness of culture roots was on the rise in emerging market and the large global companies were facing serious competition from smaller agile competitors (Janet 2009). However, Levitt (1983) was not completely wrong because production companies like Coca-Cola has gained advantage for being globalized to operate in multiple countries to increase the economy of scale and efficiency. Those advantages global companies can gain from being globalization would drive other companies to this direction. This is because globalization would bring those companies substantial benefits. Therefore, the following chapter is going to explain what could be drives of globalization in market environment nowadays.
2. Drivers of Globalization
Ananthram and Pearson (2008) stated that drivers of globalization could be classified into market drivers, cost drivers, government drivers, competitive drivers and other drivers. There are some components in each driver.
By regarding the market drivers, to have a world brand established and a global present developed are under considerations by the corporations, because consumers have high level of cognition and be able to gather information around the globe. Also, some industries may be driven by convergence of lifestyles and tastes for example like the fast-food industry.
In terms of cost drivers,...