YIP’S GLOBALIZATION MODEL
We have followed George Yip’s famous globalization model (1992) to analyse the forces behind attractiveness of globalization for telecom firms in India and more specifically Bharti Airtel.
1. MARKET GLOBALIZATION FORCES
Every month about 8-10 million subscribers are being added in the Indian mobile database. India is likely to see ~80% teledensity (fixed +mobile users) by 2014 and is set to see waning demand there on. (source: Wikipedia.com)
Given the current level of saturation in urban market and cut throat competition among operators, the industry players are aiming to achieve the dual strategy of:
• Widening telecom footprint by acquiring new subscribers in semi urban/ rural India to take advantage of its high growth potential.
• Netting talkers in emerging markets is to replicate the Indian experience outside
2. COST GLOBALIZATION DRIVERS
The margins of the telecom industry as a whole have shrunk, even though subscriber base is growing owing to competition and lower “Average Revenue per User” (ARPU) primarily due to major growth drivers being from the bottom of the pyramid, for which rates have been drastically reduced to make them affordable to the masses. The tariff structure in India is among the lowest globally at Rs.0.5 - 1 per minute vis-a -vis to the tariff in USA and UK (around Rs.13 and Rs7-8 respectively) .The inevitable commoditization of voice calls and shrinking ARPU, the next challenge lies in to develop alternative revenue
We have followed George Yip’s famous globalization model (1992) to analyse the forces behind attractiveness of globalization for telecom firms in India and more specifically Bharti Airtel.
1. MARKET GLOBALIZATION FORCES
Every month about 8-10 million subscribers are being added in the Indian mobile database. India is likely to see ~80% teledensity (fixed +mobile users) by 2014 and is set to see waning demand there on. (source: Wikipedia.com)
Given the current level of saturation in urban market and cut throat competition among operators, the industry players are aiming to achieve the dual strategy of:
• Widening telecom footprint by acquiring new subscribers in semi urban/ rural India to take advantage of its high growth potential.
• Netting talkers in emerging markets is to replicate the Indian experience outside
2. COST GLOBALIZATION DRIVERS
The margins of the telecom industry as a whole have shrunk, even though subscriber base is growing owing to competition and lower “Average Revenue per User” (ARPU) primarily due to major growth drivers being from the bottom of the pyramid, for which rates have been drastically reduced to make them affordable to the masses. The tariff structure in India is among the lowest globally at Rs.0.5 - 1 per minute vis-a -vis to the tariff in USA and UK (around Rs.13 and Rs7-8 respectively) .The inevitable commoditization of voice calls and shrinking ARPU, the next challenge lies in to develop alternative revenue
DIAGNOSING INDUSTRY GLOBALIZATION POTENTIAL
(Excerpts from G. Yip’s Total Global Strategy)
Industry globalization drivers are the underlying conditions in each industry that create the potential for using global strategy. Here we will examine each driver in more depth.
To achieve the benefits of globalization, the managers of a worldwide business need to recognize when industry conditions provide the opportunity to use global strategy levers. These industry conditions can be grouped in four categories of globalization drivers: market, cost, government, and competitive. Each key industry globalization driver affects the potential use of global strategy levers (global market participation, global products and…show more content…
That is why it is important to understand how industry globalization drivers affect the threat of entry and rivalry among existing competitors.
MARKET GLOBALIZATION DRIVERS
Market globalization drivers-common customer needs, global customers, global channels, transferable marketing, and lead countries-depend on the nature of customer behavior and the structure of channels of distribution. These drivers affect the use of all five global strategy levers. As illustrated in Exhibit 2-1, different industries have different levels of market globalization drivers. These comparative rankings are approximate only and will also change with time.
Common Customer Needs
Common customer needs represent the extent to which customers in different countries have the same needs in the product or service category (or the group of products and services) that defines an industry. Many factors affect whether customer needs are similar in different countries. These factors include whether differences in economic development, climate, physical environment, and culture affect needs in the particular product or service category as well as whether the countries are at the same stage of the product life cycle.[?] Common customer needs particularly affect the opportunity to use the global strategy levers of global market participation, global products and services, and global competitive moves. Common needs make it easier to
(Excerpts from G. Yip’s Total Global Strategy)
Industry globalization drivers are the underlying conditions in each industry that create the potential for using global strategy. Here we will examine each driver in more depth.
To achieve the benefits of globalization, the managers of a worldwide business need to recognize when industry conditions provide the opportunity to use global strategy levers. These industry conditions can be grouped in four categories of globalization drivers: market, cost, government, and competitive. Each key industry globalization driver affects the potential use of global strategy levers (global market participation, global products and…show more content…
That is why it is important to understand how industry globalization drivers affect the threat of entry and rivalry among existing competitors.
MARKET GLOBALIZATION DRIVERS
Market globalization drivers-common customer needs, global customers, global channels, transferable marketing, and lead countries-depend on the nature of customer behavior and the structure of channels of distribution. These drivers affect the use of all five global strategy levers. As illustrated in Exhibit 2-1, different industries have different levels of market globalization drivers. These comparative rankings are approximate only and will also change with time.
Common Customer Needs
Common customer needs represent the extent to which customers in different countries have the same needs in the product or service category (or the group of products and services) that defines an industry. Many factors affect whether customer needs are similar in different countries. These factors include whether differences in economic development, climate, physical environment, and culture affect needs in the particular product or service category as well as whether the countries are at the same stage of the product life cycle.[?] Common customer needs particularly affect the opportunity to use the global strategy levers of global market participation, global products and services, and global competitive moves. Common needs make it easier to
Yips Globalization Drivers For Macbook Pro
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Yips Globalization Drivers For Macbook
- Globalization Drivers Market Drivers Cost Drivers Government Drivers Competitive Drivers Market Globalization Drivers Common customer needs Global customers Global market channels Transferable marketing Measures:% of WW sales attributed to standardized products Strength of Market Drivers Cost Globalization Drivers Global scale economies.
- Industry drivers of global strategy and organization. Adjunct Associate Professor at the Anderson Graduate School of Management, UCLA, 405 Hilgard Avenue, Los Angeles CA 90024. Businesses belonging to some of the largest American multinational companies responded in their strategies to industry globalization forces.
- Yip identifies four sets of “industry globalization drivers” that underlie conditions in each industry that create the potential for that industry to become more global and, as a consequence, for the potential viability of a global approach to strategy.