Chapter 2 Exam Review - Globalization of Markets

Firm-level

Blank Consequences of Market Globalization • Countless new business opportunities for internationalizing firms • New risks and intense rivalry from foreign competitors • More demanding buyers who source from suppliers worldwide • Greater emphasis on proactive internationalization • Internationalization of firm's value chain

specialize; power; income; Technological; exporting; developed; inequality

How does globalization affect jobs and income? Supporters: • Benefits outweigh the costs - Countries will blank in what they do most efficiently • Cheaper products and higher purchasing blank • Increase blank levels at developing world benefit US • Blank improvements make unskilled labor less valuable • Should invest in education Critics: • Migration of manufacturing jobs; "blank jobs" • Lower demand for unskilled workers and lower wages at blank nations • Income blank between high skilled and low skilled workers increases at developed nations

environmental; regulations; regulations; rules

How does globalization affect labor policies and the environment? Supporters: • Tougher blank and labor standards are associated with economic progress - ex. Pollution decreased 60% between 1978 and 1990 in US. Critics: • Firms avoid costly efforts to adhere to labor and environmental blank by moving production to countries where such blank do not exist, or are not enforced. - ex. Pollute environment, employ child labor, ignore workplace safety and health issues, etc. • Put firms who follow the blank at disadvantage position.

prices; economic; income; Job; global

Is Globalization Good? Supporters: • Increased trade and cross-border investment means -Lower blank for goods and services -Greater blank growth -Higher consumer blank, and more jobs Critics: • Critics worry that globalization will cause -Blank losses -Environmental degradation -The cultural imperialism of blank media and MNEs

internationalize

Market globalization compels firms to blank their value chain, and access the benefits of international business.

Procurement; Marketing; Sales & Service

What are the stages in the firm's value chain? R&D -> Blank -> Manufacturing -> Blank -> Distribution -> Blank

Globalization

refers to the interconnectedness of national economies and the growing interdependence of buyers, producers, suppliers, and governments around the world.

Societal

Blank Consequences of Market Globalization • Contagion - Rapid spread of financial or monetary crises from one country to another • Loss of national sovereignty - can interfere with governments' ability to control of their own economies and social-political systems. • Offshoring and the flight of jobs - Jobs are lost as firms shift production of goods and services abroad • Effect on the Natural Environment - generate pollution, habitat destruction, and other environmental harm • Effect on the poor - may pay low wages, and many exploit workers or employ child labor • Effect on national culture - Convergence of cultures

interdependence; blocs; financial; lifestyles; production

Dimensions of Market Globalization: • Integration and blank of national economies. • Rise of regional economic integration blanks. • Growth of global investment and blank flows • Convergence of buyer blank and preferences • Globalization of services • Globalization of blank

factors of production; cost; functionality; flexibility

Globalization of Production: Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of blank like land, labor, and capital • Companies can - Lower their overall blank structure - Improve the quality or blank of their product offering - Improve blank

barriers; liberalization; development; financial; technology

The Drivers of Market Globalization • Worldwide reduction of blank to trade and investment • Market blank and adoption of free markets • Industrialization, economic blank, and modernization • Integration of world blank markets • Advances in blank

Value Chain

The sequence of value-adding activities performed by the firm in the process of developing, producing, and marketing a product or a service.

cost; productivity; customers; labor; partner

The truly international firm configures its sourcing, manufacturing, marketing, and other value-adding activities on a global scale. Rationale: • blank savings • increase efficiency, blank, and flexibility of value chain activities • access blank, inputs, blank, or technology • benefit from foreign blank capabilities