Globalization of Markets Essay

760 Words Dec 7th, 2008 4 Pages
GLOBALIZATION OF MARKETS

Theodore Levitt is often considered to be the first to recognize the trend towards globalization and states that: “companies must learn to operate as if the world were one large market – ignoring superficial regional and national differences…” In addition, he argues that the companies that do not adapt to the new global realities will become the victims of those that do.

Theodore Levitt’s 1983 article about the globalization of markets is one of the most discussed essays on this subject. Many companies have become disillusioned with the sales in the international marketplace as old markets become saturated and new ones must be found. Levitt in his essay asserts that well-managed companies have moved from
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The days when a company could sell last year’s models or lesser versions of advanced products in the less developed world, and the days when prices, margins, and profits abroad were generally higher than at home are also gone.

He also cites that with the globalization of markets, the multinational commercial world and the multinational corporation near their end. According to Levitt, the multinational and the global corporation are not the same thing. The multinational corporation operates in a number of countries, and adjusts its products and practices in each- at high relative costs. The global corporation operates with resolute constancy – at low relative cost – as if the entire world (or the major regions of it) were a single entity; it sells the same thing in the same way everywhere. Levitt argues that which strategy is better, is not a matter of opinion but of necessity. Worldwide communications carry everywhere the constant drumbeat of modern possibilities to lighten and enhance work, raise living standards, divert, and entertain. It is evident that the ubiquity of the desire for the most advanced things that the world makes and sells – goods of the best quality and reliability at the lowest price, has become global. The world’s needs and desires have been irrevocably homogenized. This makes the multinational corporation obsolete and the global corporation absolute.

Levitt cites that ancient

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