Globalization theory

Globalization describes the connectedness and spread of communication, technologies, and production across the world.  Globalization is characterized by the diffusion of practices, ideas, and technologies. It has a wider scope compared to universalization and internationalization.  It is described as more than the liberalization of markets. Essentially, it is the increase of worldwide social relations linking distant regions in such a way that practices and events are shaped by practices and events taking place many miles away and alternatively.  Globalization entails changing how geography and experience is understood as well as making use of opportunity it presents considerably.  One unique feature of as we globalization is the force and influence of the change involved.  It involves the interaction of extraordinary technological innovations merged with a worldwide reach that gives it a unique character.  The development of in digital technology has opened up enormous, new potentials for exchanges and production.  The internet is one such innovation that has enabled the wide access of information and resources across the world. It has also enabled the coordination of activities in real time. (Wang, 2009)

A critical aspect of globalization is the nature and power of global businesses. According to Gray, global businesses accounted for over 66% of world trade and 33% of world output. (Gray, 1999) Considerably, more than a quarter of world trade within multinational corporations.  Thus, the important idea is that the globalization discussed here involves global businesses turning, on any large scale to transnationals. Multinationals continuously look for under-exploited or new markets. They focus on increasing sales by attempting to create new products to serve different target, groups.  Globalization has therefore resulted in the rise of brands among businesses trading in the global scope.

It has also led global businesses to focus on brands as compared to inherent qualities of products.  This has advantaged global businesses in terms of market development.  Internet marketing has been widely used by global businesses as one of the strategies in branding. The focus on the brand has an impact on sales and profitability. When a brand is associated with positive aspects, then it can face major acceptance in the marketplace.  The point is that competitiveness and productivity are by and large, a function of information processing and knowledge generation. It has caused a considerable shift in how businesses are conducted.

Brand builders form the primary producers in the knowledge economy.  One element that keeps businesses operating in the global sphere is the extent to which they look to outsource services, components and products. Examples of global businesses that spend huge amounts of money in promoting their brand are Levi, Nike, Coca-Cola and other major multinationals.  One strategy used by these global businesses is to establish their brands as an integral part of how people would like to see themselves or how they understand.

One main aspect of the theory of globalization is that Global communications systems have gained increased importance. Through this process, businesses interact much more easily and frequently in all levels.   While main communications systems had more operations in the developed nations, the mechanism spread their use to less developed countries. This increased the possibility of all nations to interact within a global context through the use of new technologies. Nations have therefore integrated themselves within the global village which can be seen in today’s worldwide transactions and communications. Technological advances are now common and accessible to both large and small businesses. The situation creates a completely new environment for conducting business.

There are several main assumptions of the theory of globalization. They can be summarized in three principal points. First, economic and cultural factors are the influential aspect in every society. Secondly, studying a particular system is no longer essential sunder current global conditions as global communications and ties have made categorization less useful. Thirdly, the increased standardization in technological advances will influence many social sectors to connect themselves with others around the world. More specifically, globalization theory incorporate a key element concerning integration as concerns international trade, technology and communications, the international financial system, and cultural values. (Liu & Su, 2014)

Theories in marketing strategy

Internet marketing is one among a range of marketing strategies that global businesses use.  Essentially, there exist three aspects to firm’s strategy.  They include content, formulation process, and implementation.  Strategy content is the timing, offerings, specific relationships and pattern of resource deployment planned by a business to achieve a competitive advantage. An example is the common strategy of cost leadership versus differentiation. Strategy formulation process involves the activities carried out by a business to determine the strategy content.  Such include competitor analysis and market opportunity analysis. Strategy implementation concerns how businesses initiate actions to realize the strategy. An example is marketing.  While businesses carry out strategic actions to attain a competitive advantage, the actions and outcomes are shaped and influenced, by both the internal and external environment of the business. The Institutional theory puts forward that the actions and outcomes are impacted by factors such as knowledge systems in the context of the organization.

Businesses are embedded in a general environment comprising macro-societal factors and institutions that lay the guidelines to shape firm’s behavior.  A firm is embedded in an industry environment made up of competitors, suppliers, channel partners and customers. The nature of the relationships these actors determines the actions it initiates in pursuit of competitive advantage. The internal environment of the firm, on the other hand, is comprised of a unique set of resources. (Lopes & Casson, 2012)

Innovation theory

 Innovation is viewed as a process of creative destruction. Through innovation, a business can create a competitive advantage in the market. The "Austrian" school of strategy supports the argument which suggests that the business environment is characterized by uncertainty and disequilibrium therefore inherently dynamic. Profits in such an environment may be a result strategic use of innovation. Innovations do not essentially involve discoveries alone. Innovations include the utilization of innovations with the potential to provide the business with a unique advantage over its competitors.  Such include developing new processes.

Game theory

Game theory models assume that firms are rational utility maximizers, and they attempt to realize the ideal outcome subject to the constraint that their competitors behave similarly. There may be ambiguity in relation to the actions and expectations of the rivals. However, a rational firm is supposed to rise above uncertainty by creating competitive conjectures. A firm can do this by estimating the subjective probability of competitors’ behavior and expectations. Essentially, game-theoretic models assume rational firms that can reason from their rival’s perspective.

Market orientation theory

 The marketing concept underlies modern marketing thought that a firm should establish its customers' requirements and satisfy them more effectively than its competitors.  The premises underlying this theory is that a business culture that  most efficiently and effectively create the required behaviors to create superior value for buyers sees the continuous superior performance. Market orientation is conceptualized in terms of competitor orientation, customer orientation, and inter-functional coordination.  From a behavior perspective, a business should generate market intelligence in relation to future and current customer needs and respond to it.

Signaling theory

 Competitive signals can be defined as a preview of potential actions of the competitor. For example, successful global businesses signal the impact that internet marketing has on business performance. Businesses in the same industry are therefore likely to adopt the use of internet marketing as influenced by signals sent by competitors. The information is utilized by businesses in providing products and services hence giving the business a competitive advantage. A business can use the signal to enhance its marketing activities in a practical and cost-effective manner.  That is, it can use the Internet to reach new markets, communicate more efficiently distribute products faster, serve customers better and solve customer problems. Sometimes, signaling is viewed as predatory as signals not followed through could hurt the competitiveness of a business. For example,   Participants of the global business in local and foreign markets that fail to utilize the internet resource as the phenomenal dynamic system to reach the customers have found themselves losing their competitive edge.

Market share theory

 There is a relationship between profitability and market share.  The relationship between profitability and market share is robust across diverse definitions of market share.  A business utilizing internet marketing can easily locate valuable information on a global scope. Additionally, its ability to locate potential customers can improve.  Thus, the enhanced capabilities of the internet as a marketing tool makes it a superior marketing medium compared to different marketing mediums. For global businesses particularly, the use of The Internet in marketing has the potential to foster competition with large, well-financed corporations by drastically increasing market share in a way that was previously impossible. (Berge, 2012)

The quality explanation

The market is characterized by imperfect information and uncertainty. Thus, a market share of a brand signals of better quality to consumers. Consumers are likely to have more confidence in high market share brands in such markets.   High market share brands command a price premium hence enhancing their profitability.

The market power explanation

The firm with a higher market share can lower costs by negotiating for more favorable terms by exercising its market power due to its ability to command a price premium.

The efficiency explanation

 The experience and scale effects linked to a larger market share translate into lower costs enabling the business to earn higher profits than its rivals. (Mingxia, 2013)

Product quality theory

The economic view of quality suggests that product quality is any aspect other than price that affects the demand curve of a product. Quality can, therefore, be construed as the non-price aspect of a product that implies its superiority. In an ideal world, business would strive to maintain a higher market share and also charge a higher price as well. However, the two objectives are not compatible.  The capability of a firm to charge higher prices for higher quality is dependent on the ease with which customers can determine the quality of the product.  In situations where quality is uncertain, consumers often use price as the indicator of quality. This suggests under conditions of greater information availability; it is possible to influence perceived quality. 

The internet has enabled businesses engaged in international marketing to identify accurately a need and wants of customers. The advantage of utilizing internet in lies in the Internet’s great capacity to provide an efficient, fast, integrated and interactive exchange of information.  Product quality information is one type of information that a business can gather through internet marketing. Some of the major changes that have resulted from Internet marketing can be seen in how customers obtain price and product information. The internet supports information speed and accessible for business and thus has a positive influence in the marketing process. (Sissell, 1999)

Market pioneering theory

A market pioneer is a first-mover business that is first to employ a new process or first to introduce a new product or to enter a new market. Market pioneering advantages are gained by being the first to enter a market. The economic-analytical perspective suggests that a market pioneer achieves sustainable competitive advantage due to less entry barriers. The behavioral perspective suggests that pioneering advantage arise from the ability to learn consumer preference formation. Thus, a market pioneer can easily shape the consumers’ ideal brand attributes. The use of the internet has a significant positive effect on market entry ad product introduction.  Additionally, a business can easily keep up with the technological changes. Global businesses can increase its marketing efforts or change their business models to online ones. This means that the use of the internet enhances marketing pioneering as businesses can enter new markets or introduce new products in new markets. (Wen-Bao, 2008)

The theory of Consumer Behavior

Consumer behavior entails the study of consumers and the how they choose, consume and dispose of products. Consumer behavior integrates ideas from biology, economics, psychology, and chemistry. Consumer behavior shapes many of marketers’ decisions as businesses spend millions of dollars to uncover consumer behavior.  All marketing decisions are based on the knowledge and assumptions of consumer behavior. While researching consumer behavior complex, its understanding is critical to marketers.  Once a business has adequate data about preferences and shopping habits, it can use the data to make predictions about their needs and shopping behavior. When such predictions are made, further attempt to influence their buying behavior may be done through marketing strategy.

Global businesses use consumer behavior information to Effectively target customers, Provide value and customer satisfaction, Improve products and services, Enhance the value of the company,  Understand how customers view their products,  Understand how customers view competitors’ products, Create a competitive advantage, Apply marketing strategies and Expand the knowledge base in the field of marketing. The process goes beyond making purchases. It entails the search for, acquisition of, utilization to fulfill the consumers’ needs.

An organization can only be successful when its products have enough buyers in the market. Although there are many parameters, that play an important role in deciding the performance of a global business, the focus on end-users is the most important. Many attempts by businesses have been unsuccessful when Customers requirements are not fully taken into consideration. Therefore, consumer behavior necessitates businesses to direct total business process on meeting the customer's needs. The internet allows businesses to determine consumer behaviors in their target markets and formulate strategies to fulfill their need. (Choi, & Park, 2014)
References

Berge, T. J. (2012). Has Globalization Increased International Business Cycles?. Economic Review (01612387), (3), 5-39.

Choi, S., & Park, H. W. (2014). Flow of Online Content in Globalization Theory. Globalizations, 11(2), 171-187.

Liu, w., & Su, Q. (2014). Market segmentation and strategies from the perspective of product architecture. Xitong Gongcheng Lilun Yu Shijian (Systems Engineering Theory & Practice), 34(11), 2817-2825.

Lopes, T. S., & Casson, M. (2012). Brand Protection and Globalization. Business History Review, 86(2), 287-310.

Mingxia, Z. (2013). Dynamics of a Market Share Model for Enterprises with Coopetition Strategy. Discrete Dynamics In Nature & Society, 1-7.

Sissell, K. (1999). `Market Share' Theory Applied. Chemical Week, 161(6), 53.

Wang, J. (2009). Globalization Theory. Chinese Studies In History, 43(1), 72-98.

Wen-Bao, L. (2008). Factors Influencing Behavior. Journal Of International Marketing, 21(5/5), 23-38.

Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in custom speech writing companies services. If you need a similar paper you can place your order from affordable term papers services.