Chapter 1
What Is Globalization?
The world is moving away from self-contained national economies toward an interdependent, integrated global economic system
Globalization refers to the shift toward a more integrated and interdependent world economy
Globalization has two facets:
1) the globalization of markets
2) the globalization of production
*The Globalization Of* Markets
The globalization of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace
In many industries, it is no longer meaningful to talk about the “German market” or the “American market”
Instead, there is only the global market
{The globalization of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace.
It is important to recognize that significant differences still exist among national markets, requiring companies to customize market strategies, product features, and operating practices to meet the conditions in particular markets.
The most global markets currently are not markets for consumer products—where national differences in tastes and preferences are still often important enough to act as a brake on globalization—but markets for industrial goods and materials that serve a universal need the world over.
These include the markets for commodities such as aluminum, oil, and wheat; the markets for industrial products such as microprocessors, DRAMs (computer memory chips), and commercial jet aircraft; the markets for computer software; and the markets for financial assets from U.S. Treasury bills to Eurobonds and futures on the Nikkei index or the Mexican peso. }
Falling trade barriers make it easier to sell internationally
The tastes and preferences of consumers are converging on some global norm
Firms help create the global market by offering the same basic products...