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International Business: Globalization and its drivers · Globalization of Markets and Production

How firms sell across converging markets and split production worldwide, and the trade-offs that follow.

International Business · 23 questions

Try 3 questions

1. What does the "globalization of production" refer to?

  1. Merging with firms in other countries
  2. Selling one product in many countries
  3. Spreading production stages across countries
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Answer: Spreading production stages across countries

It means sourcing goods and services from locations around the world to exploit differences in cost and quality. Selling the same product everywhere is the globalization of markets.

2. In 1983 Theodore Levitt argued that technology was pushing firms toward what kind of global market?

  1. Local brands replacing foreign ones
  2. Standardized products sold worldwide
  3. Products tailored to each nation
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Answer: Standardized products sold worldwide

Levitt claimed converging tastes would let firms sell standardized products everywhere, winning on scale and price. Later critics noted that many national differences persisted.

3. Why does a global fast-food chain still sell different menu items in India, Mexico and Japan?

  1. Most countries ban standardized menus
  2. Global menus cost more to produce
  3. Tastes and customs still differ by market
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Answer: Tastes and customs still differ by market

Even the most global consumer brands adapt to local diets, religious practices and flavors. Markets for consumer goods remain far less uniform than Levitt predicted.

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