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The economies of the world's nation-states have become interconnected and interdependent to an extent unparalleled in history. Industry after industry is discovering that competition is no longer just regional or national, but truly global.
The global economy anticipated for years finally is being realized in the '90s because of several factors:
* The collapse of the world's command economies and socialism.
* The triumph of market economies and capitalism.
* The explosive growth of technology and its worldwide dissemination.
* The development of instantaneous worldwide communications.
* The rise of knowledge and skills as principal sources of competitive advantage--for individuals, for organizations, and for nations.
Marketing managers must prepare themselves to deal with the consequences of a global economy and the realities of global competition. First of all, the traditional multinational corporation is giving way to the global corporation.(1) Although multinational corporations, by definition, always have operated across national boundaries, most of their high value-added activities--such as product design, manufacturing, and R&D--took place in the headquarter's nation.
In contrast, all the activities of the emerging global corporations, including high value-added activities, are disbursed worldwide. The Mazda MX-5 Miata, for example, was designed in California, financed in Tokyo and New York, and prototyped in Worthing, England. It currently is assembled in Michigan and Mexico from components produced in both the United States and Japan. The Miata is a truly global car and Mazda is on its way to being a truly global corporation.
Now, as never before, companies that "think globally" will enjoy significant competitive advantages over those that treat their foreign operations and divisions as subsidiary to divisions in the headquarter's nation.
As another consequence of the global economy, nations find it is increasingly necessary to seek alliances with other nations in order to compete. The United States--the most successful "alliance" the world has ever known--is aligning itself with Canada and Mexico to compete better with Japan and the European Common Market (which is trying to become a "United States of Europe"). The emergence of trading blocs proves that no nation, even the United States, can stand alone; to compete in the global economy, each nation-state must secure allies and cooperate with them.
Like nations, corporations must court allies to promote their own survival...