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.

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

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

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

Businesses can build a direct presence in foreign markets.

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