Developed and Less Developed Country

Developed and Less Developed Country



Developed and Less Developed Country

Introduction:

In 1983, marketing Professor Theodore Levitt wrote a landmark article in the Harvard Business Review, entitled “The globalization of markets”. Professor Levitt's theory was that the future belonged to companies that make and sell “the same thing, the same way, everywhere” (Levitt, 1983). Such companies could take advantage of apparently global converging tastes and preferences, driven by world-wide media and marketing channels. Where tastes were not already converging, they could be made to do so by selling customers globally standardized forms of products and services that present superior value over local versions.

Since Levitt's article, many corporations have embraced globalization strategies with gusto. On the other hand, some critics believe that the fruits of globalization have not been fairly shared. The effects of this globalization approach by business have been blamed for many of the ills of the world, notably poverty, a growing gap between rich industrialized countries, and undeveloped poverty-stricken ones. Globalization is also held liable for corruption, environmental degradation and human rights failings. The spleen of anti-globalization protesters is vented against international financial and trade institutions (IFTIs) like the World Bank and the World Trade Organization (WTO), as well as governments and leaders, especially of the G7 countries. Particular anger is reserved for multinational corporations (MNCs), especially, but not exclusively US companies, which have a global footprint or global brands.

Of course, globalization poses challenges as well as advantages. One of the thorniest issues relates to the fact that the “one size fits all” approach does not always work. Sometimes, there are such big disparities among different countries in tastes, preferences and lifestyles, that it is impractical to adapt a standard product in such a way as to cater for all markets. For example, Ford has been singularly unsuccessful in its efforts to develop a “world” car. Even when a product can be adapted, other elements of the marketing mix might have to be tailor-made for each market. For instance, Heineken beer is regarded as a mundane everyday beer in its home country, The Netherlands, but in other countries it is promoted and perceived as an élite foreign beer and commands a premium price. Compared with a multi-domestic strategy, where each country market is managed discretely by its own separate locally based management structure, globalized company managers may lose touch with their multiple markets and diverse customers. This is because their attention is focused on coordinating activities from the center, rather than on local customers themselves.

The last point raises potential difficulties with implementing a global strategy. The center must co-ordinate and integrate the company's activities, to reap the rewards of globalization. This can be very complex and time-consuming, and it may well require additional staff at headquarters. An effectively managed global strategy implies much less autonomy for middle managers than a multi-domestic one. Thus, it may be demotivating for managers outside head office. It is exacerbated for managers based in markets which have been chosen as battlefields ...