Rebecca E. Keisler
IBUS 310 9:30am Section 511
1. When determining an effective worldwide competitive strategy, it is critical to consider the industry globalization potential of the industry in question, in this case the retail industry. The globalization potential of the retail industry can be determined by analyzing drivers such as market, government, competitive, and cost. If the industry has a high globalization potential, then a global strategy should be chosen. Alternatively, if the industry has a low globalization potential, a more local strategy should be chosen. Because the retail industry today includes companies such as Wal-Mart that offer many differentiated products and brands, in terms of market drivers, consumer needs and tastes will differ substantially across nations. Basic products/necessities can be somewhat standardized, but other products such as clothing will need to be adapted based on location. Marketing elements therefore are not easily transferable across borders because of the immense number of brands retailers such as Wal-Mart carry. Analysis of such market drivers derives a low globalization potential for the retail industry. Government drivers also offer a low globalization potential for the retail industry. With so many products, trade policies in host countries can make manufacturing and selling difficult on a global level. Likewise technical standards, such as varying electrical voltages, in varying countries make standardized production more difficult. The governments in different nations also have different marketing regulations and media restrictions that may make homogeneous advertising difficult. These government drivers place limits on the globalization potential of an industry with products as diverse as those in the retail industry. Competitive drivers also offer a lower potential for globalization. After gaining advantages over the weaker local competitors, global retailers now must...
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