Management Theories and Philosophies

Management Theories and Philosophies

Globalization
“The globalization of markets is at hand. With that, the multinational commercial world nears
its end, and so does the multinational corporation”.
It can be analyzed that Levitt overestimated and also underestimated globalization. There are
some markets that are not anticipated to respond against globalization, mainly against the
western globalization. Levitt underestimated entire globalization power that brought change in
the nations to hold the aspects related to global capitalism in relation to the former Soviet Union,
China and also the different parts worldwide. According to the statement given by Levitt's, states
that the globalization is expanding on a large scale and there are many companies who are
operating in the number of counties and adjust their products and processes. Due to this, the
companies have to face the high relative cost. The companies are expanding with resolute
constancy and they are offering the same products and service everywhere (Monaghan &
Tippmann, 2018). So, it can be said that the statement given by him have both positive as well as
negative aspects behind the concept of globalization.
Globalization can defined as the term related with growth in trade and investment that is
considered by the international business and it is considered as the integration of economies on
the global platform. It can be said that globalization is the method in which there are individuals,
companies and also the government (Cravino & Levchenko, 2017). Globalization relates to the
spread of products, investment and technology across the national borders and cultures. It can be
examined that there are many companies who are managing their activities on the global
platform. They are mainly focusing on spreading the brands and services on the global platform
(Rusten & Bryson, 2017). One of the best examples can be of Honda Company that conduct the
activities in the United States and also US brand Coca Cola manages its plants in the other
counties such as France and Belgium with almost 80% of the profits of the company are earned
from the overseas sales (LeClair, 2018).
The multinational companies are considered as major globalization drivers as they boost
economic interdependence in the national markets. The companies enhanced their market share
by considering the concept of globalization and it has helped the business to earn more profits in
the business environment. But it can be argued that globalization is considered by the companies
that it is ending the scope for the multinational companies. There are companies such as Wal-
Mart and Starbucks who are operating the same activities in many countries and due to this, the
2

Globalization
relative cost has been enhanced by the company. It can be said that these companies have
attained success by expanding their services and products on the global platform but on the other
hand, it can also be argued they face a huge competition worldwide (Andriof & McIntosh, 2017).
For example Wal-Mart has expanded its activities or the operations on the global scale and now
they are facing huge competition in the market. The competitors of the company are Target,
Kroger, safe way and also Kmart. Just due to globalization the company has to face competition
in competitive market. But cost incurred by the company to compete the competitors has been
enhanced. It is observed that to maintain the competitive advantage, Wal-Mart focused on
marketing and also advertising of the products and services that boosted the sales of the products
in the highly competitive market (LeClair, 2018).
Levitt stated that the Global Corporation vs. Multinational Corporation in which he stated that
multinational companies should move to a global corporation as according to him the
multinational market is sinking. It can be said that there is more scope if the activities are
operated on the global platform. To maintain the large market share it is important to maintain
the standardized products so that it could be easy to boost the brand image in the highly
competitive business world. The next concept on which Levitt focused relates to offering high
quality to the customers at low costs. This idea will help to boost the demand and needs of the
customers on the global platform. In the present scenario, people are more focused on preferring
the standardized products so that the products and services can be sold on the global platform
(Steger, 2017).
One of the essential strategies given by Levitt, states that there is no best option like the price.
So, the companies should focus on offering the products at a low price or if the products are
standardized then the people will prefer to spend more money on the products and services
offered by the company. The concept was also given by Levitt related to standardization in
which it has been stated that of the company emphasizes on maintaining the cost of the products
then it could be easy to satisfy the needs of the customers in the competitive market (Steger,
2017). He also stated that "Customers will prefer the products that are standardized". This
statement clearly showcases the link with the strategy analyzed by the Levitt.
3