Once upon a time, globalization was viewed as a one-way street – multinational companies from the developed world (North America, Japan and Western Europe) used very low cost labor (less than $1 per hour) from the developing world to produce parts and products at substantially lower costs. As the multinationals were outsourcing production to low cost locations, they were also inadvertently teaching entrepreneurs in those countries to produce products with higher quality and lower costs as well as how to market them in the developed world. A significant number of these firms succeeded in challenging the incumbent multinationals and became multinationals in their own right. Some have even become number one in their industries – BYD Battery, Johnson Electric, Embraer, Wipro. They are no longer challengers – they are the new incumbents. And many of these companies (like Tata) are purchasing the traditional incumbents (like Corus Steel and Jaguar) for their brands, talent and access to markets.
At the same time, a billion people are leaping from poverty to being early stage consumers. These next billion consumers are no longer looking for the calories to survive the day – they are buying mobile phones, two wheeled vehicles and consumer products. They are improving their housing and using the banking system. They are improving their lives and their life expectancies. They are creating new demand.
In this course, students will explore why this happened, the change in global dynamics, the countries that are spawning these companies, the companies themselves and what they are doing differently to change the economic equations. This new two-way street (“Globality”) is the megatrend that managers will be riding and fighting for the next 10 to 20 years in the business world. Knowledge of how the global economy will continue to evolve and how to ride the resulting tsunami will bring competitive advantage to the companies and management teams that understand and embrace the changes.
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