Page 73 - DMGT548_GLOBAL_HRM

Global HRM

Notes Self Assessment

Fill in the blanks:
1. The trend away from distinct national economic units and toward one huge global market
is known as ………....

2. Globalisation has involved greater ………. in the international economy.
3. The world economy is being transformed by a combination of technological and ……….
factors.

4. ………… advances have significantly lowered the costs of transportation and
communication.
5. Technological factors include real time information about world events through television
and the ………….
6. ……….. have led to increases in the movement of capital and other factors of production.
7. Geopolitical factors include emerging global economy is demise of ………. and the rise of
market based economies.

4.2 Globalisation of Market, Production, Investment and Technology

The globalisation of markets refers to the merging of historically distinct and separate national
markets into one huge global marketplace. In many markets today, the tastes and preferences of
consumers in different nations are converging upon some global norm.

In the past, marketers have capitalised on the demand stemming from the developed regions of
the world; North America, Europe and Australasia. Demand in these markets remains strong.
However, growth has slowed significantly in the recent past. International marketers are now
turning to the developing regions of the world where there is still huge potential for market
growth.
The emerging markets with the highest growth potential are located in Africa, South America,
Asia and Eastern Europe. More specifically, international marketers are focusing their efforts on
gaining entry into South Africa, Brazil, India, China, and Russia. As these markets become more
industrialised, workers are able to earn a more stable and higher income.

There are a few key factors that you can look at to identify the emerging markets with the most
potential. Population and population growth forecasts are useful indicators of total market size.
The population of India and China combined is over 2.5 billion people, clearly indicating why
international marketers are interested in entering these markets.
The level of infrastructure in an emerging market is another good indicator of market potential.
When engaging in international operations, you rely heavily on services provided by the local
market. You are likely to utilise transportation systems, communication systems and energy
infrastructure to sell and distribute your products and services. It will be easier and more cost
effective to work in countries that already have reasonably well developed and reliable
infrastructure.
Income and spending behaviour are also important factors to consider when analysing an
emerging market. When looking at income figures, ensure that you look at the median income
rather than the average income. This is because many developing countries feature a small
amount of the population who hold the majority of the countries wealth. This can cause average
income figures to overestimate what the majority of the population actually earns in a year.

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