$2.$ Drivers of Globalization $($Keyboard Navigable Alternate Version$)$

Drivers of Globalization

Globalization has been driven by five major factors: political, technological, market, cost, and competitive. Businesses have fueled and have ultimately been the beneficiaries of these trends. Understanding these trends helps businesses develop strategies and tactics to accelerate their growth and international expansion.

Understanding globalization trends helps businesses identify opportunities and threats in their environment. Understanding these trends will also make the changes much more manageable and predictable. International businesses have greater flexibility, more options, and a broader scope to consider globalization of production and globalization of markets.

Select the driving force for each description or implication for business.

Competition continues to increase in intensity with new firms entering global markets.

$($Click to select$)$ Competitive Driver$$ Political Driver$$ Cost Driver$$ Technological Driver$$ Market Driver$$

The rush to globalization has resulted in explosive growth in international business.

$($Click to select$)$ Competitive Driver$$ Political Driver$$ Cost Driver$$ Technological Driver$$ Market Driver$$

Microprocessors, telecommunications advances, and the Internet have fueled changes.

$($Click to select$)$ Competitive Driver$$ Political Driver$$ Cost Driver$$ Technological Driver$$ Market Driver$$

As microprocessors get faster and less expensive and telecommunications bandwidth increases, work processes that can be digitized can be done anywhere in the world.

$($Click to select$)$ Political Driver$$ Market Driver$$ Cost Driver$$ Technological Driver$$ Competitive Driver$$

Businesses can build a direct presence in foreign markets.

$($Click to select$)$ Political Driver$$ Cost Driver$$ Competitive Driver$$ Market Driver$$ Technological Driver$$

Companies expand abroad to protect their home market by establishing operations where key customers are located or by following large customers into new markets.

$($Click to select$)$ Political Driver$$ Competitive Driver$$ Cost Driver$$ Technological Driver$$ Market Driver$$

There is a trend toward the unification and socialization of the global community leading to the formation of arrangements such as the North American Free Trade Agreement and the European Union.

$($Click to select$)$ Political Driver$$ Cost Driver$$ Technological Driver$$ Competitive Driver$$ Market Driver$$

Many businesses have gained access to combined markets by exporting to or producing in the area.

$($Click to select$)$ Competitive Driver$$ Political Driver$$ Technological Driver$$ Cost Driver$$ Market Driver$$

Companies are exporting or producing overseas to capitalize on economies of scale in R&D$,$ production, inventory costs, and so on$.$

$($Click to select$)$ Market Driver$$ Political Driver$$ Technological Driver$$ Cost Driver$$ Competitive Driver$$

Businesses can move production or other parts of the value chain business to countries where costs are lower.