The term globalization means International Integration. It is a process through which the diverse world is unified into a single society. Opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNC's, population migrations and more generally increased mobility of persons, goods, capital, data and ideas WHAT IS GLOBALISATION ?

GLOBALISATION

Shape of the world’s economy is being changed by “globalization” Nike Dell  Marketing  Branding  Advertising  Cost down  Outsourcing

 New trade pattern: developing countries –don't just have to trade their raw materials to the West and get finished products in return; –can become big-time producers as well.  New production pattern: global product network –companies can locate different parts of their production, research and marketing in different countries

 Growing global markets in services people can now offer and trade services globally -- from medical advice to software writing to data processing -- that could never really be traded before. Globalization – what’s really new? New markets W-2, W-4, 1099 bonuses & stock statements Indian accountant US tax payers

 Market economic policies spreading around the world, with greater privatization and liberalization than in earlier decades. ex: BRIC  Widespread adoption of democracy as the choice of political regime. Globalization – what’s really new? New rules and norms

 Multilateral agreements in trade, taking on such new agendas as environmental and social conditions.  New multilateral agreements – for services, intellectual property, communications – more binding on national governments than any previous agreements. Globalization – what’s really new? New rules and norms

 GDP – USD 590 billion  GDP growth rate – 9%  Services contribution – 54%  Balance of Trade – USD (-)46.2 billion  Investment goal – USD 250 billion 2006 Growing Indian Economy * : Projected Source: Economic Times & India Brand Equity Foundation (IBEF)  GDP – USD 1.16 trillion  GDP growth rate – 9.5%  Services contribution – 60%  Balance of Trade – Negative balance should increase with surging imports versus exports  Investment goal – USD 305 billion 2008 *  GDP – USD 1.36 trillion  GDP growth rate – 9%  Services contribution – 60-65%  Balance of Trade – Negative balance should increase with surging imports versus exports  Investment goal – USD 370 billion 2010 *

Contribution of Services - increased from 48% to 62% and is estimated to contribute 60% by 2010 Growing GDP *: Projected Source: India Brand Equity Foundation (IBEF)

*: Projected Source: Ministry of Commerce & IBEF Growing Exports

Growing Imports

Steadily increasing Forex reserves offer adequate security against any possible currency crisis or monetary instability Increasing Forex Reserves Source: Reserve Bank of India & India Brand Equity Foundation (IBEF)

Growing FDI Inflows * Provisional Source: Department of Commerce Electronic equipment, manufacturing and telecom have witnessed significant FDI inflow India is ranked second in AT Kearney’s FDI confidence index (2007)

Increasing Per Capita Income Source: India Brand Equity Foundation (IBEF) & Economic Survey

How companies go International Exporting (the selling of domestically produced goods in foreign markets) Licensing (the selling of rights to market brand name products or to use patented processes or copyrighted materials) Franchise (a type of licensing arrangement in which a company sells a package containing a trademark, equipment, materials and managerial guidance)

Cont….. Joint Venture (business undertaking in which foreign and domestic companies share the costs of building production or research facilities in foreign countries)

Managers in globalization Ethnocentric Managers (Attitude that the home country’s management practices are superior to those of other country’s and can be exported along with the organization’s good’s and services.) Polycentric Manager (Attitude that since a foreign country’s management policies are best understood by its own management personnel, the home organization should rely on foreign offices.)

CONTINUE………….. Geocentric Manager(Attitude that accept both similarities and differences between domestic and foreign management policies and so attempts to strike a balance between those that are most effective.)

Main sectors : Main Destinations : Main Destinations : China, UAE, UK North America is emerging as a destination. India Inc. Investing Overseas Auto ComponentsIT BeveragesMetals CosmeticsMobile Communications EnergyPharmaceuticals Financial ServicesSoftware Industrial Goods

India co. going Global BuyerAcquisitionPrice Reliance IndustriesFlag Telecom, BermudaUS$ 212m Tata MotorsDaewoo, KoreaUS$ 118m Infosys TechnologiesExpert Information Services, AustraliaUS$ 3.1m Bharat ForgeCarl Dan Peddinghaus, GermanyN/A RanbaxyRPG (Aventis) Laboratories, FranceN/A WockhardtCP Pharmaceuticals, UKUS$ 18m Cadila HealthAlpharma SAS, FranceUS$ 5.7m HindalcoStraits Ply, AustraliaUS$ 56.4m WiproNerveWire Inc, USAUS$ 18.5m Aditya BirlaDashiqiao Chem, ChinaUS$ 8.5m United PhosphorusOryzalin Herbicide, USAUS$ 21.3m "Toyota Motor has chosen to source from India due to its competitive cost of manufacture, availability of abundant engineering talent, and strong indigenous machine tool."