The myth of globalization – Harvard Business Review (Article)
In this article, the writer described globalization and standardization, and adaption of products and services in the international market. He described external and internal barriers that hamper the standardization of products and services, requisite conditions, and underlying assumptions for standardization and global strategy.
The first assumption is the homogeneity of consumers’ needs worldwide, which may not hold everywhere as consumers’ needs vary from region to region. The second underlying assumption of consumers’ willingness to sacrifice preferences in product design, tastes, and functions for low prices but not on the quality was explained. Then the author laid down the third assumption of economies of scale of production for achieving standardization of global products and services. He narrated that the new technological developments have changed this concept of achieving economies of scale by producing many products. Further, he explained that production costs had become minimal impact due to technological development and economies of scale. Rather other factors such as distribution channels, packaging, marketing, and PR play greatly affect the product’s cost.
The author also described many requisite conditions for companies to have a winning strategy in the international market. First, he described the condition of the existence of global market segments such as industrial and consumer markets to have a global brand image across the targeted segment. Secondly, he mentioned synergies associated with globalization, which meant that the opportunities might exit to transfer the goods and ideas for product and promotional method from one country to another. Thirdly, he discussed that for implementing globalization’s strategy, the international communication and distribution channels should be available in all such countries. Marketing and another distribution medium must be readily available and accessible to make globalization strategies successful.
Finally, in the article, the author discussed the external and internal constraints to the effective standardization and regarded the governments’ restrictions, differences in the competition, availability and costs of resources, and the marketing media’s effectiveness as external constraints. He then described internal constraints such as existing international operations and local managements’ motivational levels and attitude towards standardization. He concluded the topic by offering a framework for classifying the global strategic options that are international companies should adopt a hybrid global strategy to reap the benefits of standardization and synergies from operating at an international level.
The article discussed the International Marketing and global strategy part of strategic management.
In my view, a criticism from my side would be the writer should also mention the advantages of globalization and standardization of products. Moreover, the author did not provide empirical evidence to support the adaption of products and services. He could not provide the impact of effective globalization strategies over the international firm’s sustainable competitive advantage.
The most interesting part I have found in this article is the underlying assumptions of globalization because the author presented the valid and accurate counter-arguments to negate these assumptions.
I have found internal constraints to effective standardization and framework to classify the strategic options most difficult. In fact, the article could not shed light in detail on hybrid strategies and how organizational structure hampers its effort to standardize.