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Boeing International Expansion in Turkey - on Globalization: Economics and Culture

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Boeing International Expansion: Turkey

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Critical Analysis 1 & Global Enterprise Project Proposal

Segment One – On Globalization: Economics and Culture

Introduction

Globalization is a bizarre and complicated notion that burst on the world fairly recently, but rapidly became a household consideration. It is a theory that was seldom used till the 1990s, however, the globalization processes had been occurring for centuries. Before globalization became a buzz term, it was applied in the most improbable fields: education to designate the global life of one’s mind; international relations to refer to the European Common Market’s extension; in the journalism, field to depict the problem of the American Negro embracing a global significance. As the number of MNC’s increased in the 1960s to 1970s, the marketers were confronted by various social, political, cultural, and institutional contexts (Blutstein, 2016). There was minimal evidence on how the U.S models would hold up in the new markets if American companies could compete in overseas markets, or even how marketing management would adapt over time. In 1983, Theodore Levitt’s HBR’s article, Globalization of Markets, brought forth a new stamina to the fairly neglected topic. The article ignited the enduring debate by advocating standardized global marketing initiatives versus the presently accepted norm of local adaptation.

  1. Summary of the Article Globalization of Markets

Theodore’s globalization theory was observed by companies and academia alike as the foundation for hypothesizing globalization in marketing during the 1980s (Levitt 1983). Levitt’s vision of the global markets was rather bold and foresighted in the 1980s when world trade gained prominence. As one of the proponents of the globalization perspective, Levitt cited that multinational companies should focus on leveraging the global resources to accomplish synergy. Here, global standardization is essential in the acquisition of the scale economy and competitive advantage.

In his article, Levitt (1983) stated that the key to success is the growth of global products and brands that are more specific and standardized worldwide. He also cited that the faster technological process is the driving force that makes the needs and desires of the world become overly similar. As the technology advances, the international communication and transportation will be expedited greatly and consumer’s preferences and tastes would then become homogenous. Concurrently, mass production, owing to the technological development, makes it likely for superior goods to become inexpensive for average consumers. The failure of most multinational companies in the overseas market was not just attributed to the poor executions but the ‘catastrophe of imagination’ to comprehend the trend of new global realities for standardized products as the novel commercial reality.

Critical Analysis on Globalization of Markets

The out-of-date multinational operating archetype, which stressed on adapting to the distinctive local corporate environment, is hence obsolete (De Wit & Meyer, 2004). Bearing this in mind, as the multinational corporate world comes to an end, so does the MNCs. The present global business environment does not conform to Levitt’s idea. Though Theodore might not seem perceptive, he steered the vision by presaging the tumultuous advances in international business. If the present companies are referred to as either MNC (Multinational Corporations) or GC (Global Corporations), the concept is similar only that it has undergone over massive advancements in the past few years. The author overestimated and underestimated the globalization concept. At the time of writing, Levitt described the MNC as a business that operates in several nations, adjusts practices and products in each country at fairly higher costs.

Levitt did not expect that some foreign markets would counter globalization, mainly against the Western globalization. He underestimated the fact that globalization would transform nations to embrace the features of global capitalism, like China, and Soviet Union. Also, some markets are either too big or variegated for compulsory and rapid changes by the GCs without making substantial adaptations to the business practices and products

The current reiteration of managerial behavior and the company’s globalization role is progressing - at a faster frequency - and the “new” environment of the global corporation: adaptableness is simply a reoccurrence to the “older” MNCs. Levitts’ viewpoint, that the global and human cohesion of scarcity is a key driver of the efficiency model hence, the need for money is valid. Today, the global corporations pay more consideration to the locals' needs as life and the company operations cannot be entirely about profitability and efficiencies. Similarly, the author’s viewpoint is fundamentally founded on the necessity for standardization. This is an affable position that is hard to fortify since human beings are integrally defensive, and aspire to stand out.

The present industrial uprising of technology has resulted in instant communication, hence, feeding the conception and faster development of a global culture. The cultural preferences pursue one of either two paths: the culture has lost relevance to economic decisions and it has diffused to other communities hence, becoming the core substance of global trends. Levitt was right about the role of branding in duplicating the convergence of preferences and tastes on a global scale. For instance, the most influential of all, is the U.S cultures’ products such as Coca-Cola, McDonald’s, and Google have homogenized the worldwide “taste” for products. Technology has also driven consumers towards common goals by alleviating the life’s burdens, expanding the discretionary time and enhancing the spending power (Blutstein, 2016). Further, in the salable products, the intrinsic desire for the best or latest is certainly unavoidable, so the standardization of superior quality” is an endlessly increasing bar as the inventions infiltrate.

In the trade realms, surely the need for standards is clear. The World Trade Organization has made substantial steps to address the needs for all nations to accept by a similar rules. But, the global era stresses that the global corporations need to acclimatize to the native tastes, rather they ought to cognize what the needs and wants of the customers, The purchasing decisions are not based on prices alone, unless in the case of generic products. Today, the purchases are driven by emotions– which explains why “brand” means is even more important as homogenization increases and in technological products.

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