Page 14 - DMGT548_GLOBAL_HRM

Unit 1: Introduction to Global HRM

 Costs Drivers Notes
 Technology Drivers
 Government Drivers
 Competitive Drivers

1.2.1 Market Drivers

One of the primary drivers of globalisation has been in respect to market forces, whereby many
consumer goods and services are now universally available, no matter one’s geographic location
or social setting. As a result of international marketing campaigns and corporate brand
promotions, consumer desires and lifestyles around the world are increasingly converging.
As corporations pursue growth through globalisation, they have encountered new challenges
that impose limits to their growth and potential profits. Corporate social responsibility helps
them sustain a competitive advantage by using their social contributions to provide a
subconscious level of advertising.
The market forces aiding the process of globalisation are:
 Per capita income converging among industrialised nations

 Convergence of lifestyles and tastes
 Organisations beginning to behave as global consumers
 Increasing travel create global consumers

 Growth of global and regional channels
 Establishment of world brands
 Push to develop global advertising
Globalisation of markets: It refers to the merging of national markets into one huge global
marketplace. Now selling internationally is easier due to falling barriers to cross-border trade.
A company doesn’t have to be the size of these multinational giants to facilitate and benefit from
the globalisation of markets. They can offer a standard product to the worldwide but it is not
possible as there are very significant differences that exist between national markets like consumer
tastes, preferences, legal regulations, cultural systems. These differences require that marketing
strategies in order to match the conditions in a country.

Example: Wal-mart still needs to vary their products from country depending on local
tastes and preferences. McDonalds when entered into Indian market has to bring the changes in
their menu and product preparation as per the Indian people requirements.
Globalisation of production: It refers to the sourcing of goods and services from locations
around the world to take advantage of national differences in the cost and quality of factors of
production. The idea is to compete more effectively offering a product with good quality and
low cost.

Example: Nike is considerate one of the leading marketers of athletic shoes and apparel
on the world. The company has some overseas factories which have achieved a super production
with low cost. Unfortunately Nike has been a target of protest and persistent accusations that its
products are made in sweatshops with poor working conditions. The company has signalled a
commitment to improving working conditions, but in spite of the fact, the attacks continue.

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