Globalization and industry structure in india

Globalization

1. SAHYADRI COMMERCE AND MANAGEMENT COLLEGE, SHIMOGA. Subject: Strategic Management and Business Policy Topic: Module-2: Unit-2: Globalization and Industry Structure Presented By, Srujana C S Sahana G II MBA

2. Meaning of Globalization and Industry Structure: Global Economy is also referred to as world economy. This term refers to international exchange of goods and services that is expressed in monetary units of money. It may also mean as the free movement of goods, capital, services, technology, and. Industry structure refers to the composition and characteristics of the market in which a company operates. It includes factors such as the number and size of companies in the market, the level of product differentiation, the bargaining power of suppliers and buyers, and the threat of new entrants and substitutes.

3. Globalization and industry structure have a significant impact on resources, including: Access to resources: Globalization increases access to resources, such as labor , materials, and markets. Resource allocation: Industry structure influences how resources are allocated, with some industries being more resource-intensive than others. Resource utilization: Globalization and industry structure affect how resources are utilized, with some companies adopting more efficient resource use practices. Resource scarcity: Globalization can lead to increased competition for resources, exacerbating scarcity. Resource pricing: Industry structure and globalization influence resource pricing, with some resources becoming more expensive due to increased demand.

4. Some resources affected by globalization and industry structure include: Labor: Globalization has led to a global labor market, with companies seeking skilled and low-cost labor . Energy: Industry structure and globalization impact energy consumption and production, with some industries being more energy-intensive. Water: Globalization and industry structure affect water usage, with some industries being more water-intensive. Raw materials: Globalization increases demand for raw materials, such as metals, minerals, and agricultural products. Financial resources: Globalization provides access to global financial markets, influencing funding and investment.

5. Capabilities and Competencies A capability is a combination of behaviours, skills, processes and knowledge that affects an outcome. Competency is the measure of how a person performs a capability. In the context of globalization and industry structure, capabilities and competencies play a crucial role: Capabilities: Global reach: Ability to operate and manage global supply chains, distribution networks, and customer relationships. Cultural adaptability: Capability to understand and adapt to diverse cultural contexts, enabling effective communication and collaboration.

6. 3. Innovation: Capability to develop and commercialize new products, services, and processes, driving competitiveness. 4. Digitalization: Capability to leverage digital technologies, enabling efficient operations, innovation, and customer engagement. 5. Partnership and collaboration: Capability to form and manage strategic partnerships, alliances, and joint ventures. Competencies: Global mindset: Ability to think and act globally, understanding diverse cultural, economic, and political contexts. Language skills: Proficiency in multiple languages, facilitating communication and collaboration across borders.

7. 3. Cultural intelligence: Ability to understand and navigate diverse cultural norms, values, and beliefs. 4. Adaptability and resilience: Ability to adapt to changing global market conditions, regulatory environments, and customer needs. 5. Digital literacy: Ability to effectively utilize digital technologies, data analytics, and social media. Industry structure influences the development of capabilities and competencies, as companies must respond to: Global competition: Developing capabilities and competencies to compete effectively in global markets. 2. Industry convergence: Blurring of industry boundaries, requiring companies to develop new capabilities and competencies.

8. 3. Regulatory environments: Navigating diverse regulatory requirements, necessitating capabilities and competencies in compliance and risk management. 4. Technological disruption: Leveraging digital technologies, data analytics, and innovation to stay competitive. Value chain analysis: Value chain analysis is a strategic process that can increase profit margins and provide a competitive advantage for companies of all sizes. Within this analysis, businesses identify areas where the value of specific production and sales activities can be increased.

9. Primary activities The first are primary activities which include the five main activities. All five activities are directly involved in the production and selling of the actual product. They cover the physical creation of the product, its sales, transfer to the buyer as well as after sale assistance. The five primary activities are inbound logistics, operations, outbound logistics, marketing & sales and service. Even though the importance of each category may vary from industry to industry, all of these activities will be present to some degree in each organization and play at least some role in competitive advantage.

10. Inbound Logistics Inbound logistics is where purchased inputs such as raw materials are often taken care of. Because of this function, it is also in contact with external companies such as suppliers. The activities associated with inbound logistics are receiving, storing and disseminating inputs to the product. Examples: material handling, warehousing, inventory control, vehicle scheduling and returns to suppliers. Operations Once the required materials have been collected internally, operations can convert the inputs in the desired product. This phase is typically where the factory conveyor belts are being used. The activities associated with operations are therefore transforming inputs into the final product form. Examples: machining, packaging, assembly, equipment maintenance, testing, printing and facility operations.

11. Outbound Logistics After the final product is finished it still needs to find its way to the customer. Depending on how lean the company is, the product can be shipped right away or has to be stored for a while. The activities associated with outbound logistics are collecting, storing and physically distributing the product to buyers. Examples: finished goods warehousing, material handling, delivery vehicle operations, order processing and scheduling. Marketing & Sales The fact that products are produced doesn’t automatically mean that there are people willing to purchase them. This is where marketing and sales come into place. It is the job of marketeers and sales agents to make sure that potential customers are aware of the product and are seriously considering purchasing them. Activities associated with marketing and sales are therefore to provide a means by which buyers can purchase the product and induce them to do so. Examples: advertising, promotion, sales force, quoting, channel selection, channel relations and pricing. A good tool to structure the entire marketing process is the Marketing Funnel.

12. Service In today’s economy, after-sales service is just as important as promotional activities. Complaints from unsatisfied customers are easily spread and shared due to the internet and the consequences on your company’s reputation might be vast. It is therefore important to have the right customer service practices in place. The activities associated with this part of the value chain are providing service to enhance or maintain the value of the product after it has been sold and delivered. Examples: installation, repair, training, parts supply and product adjustment.

13. Support Activities The second category is support activities. They go across the primary activities and aim to coordinate and support their functions as best as possible with each other by providing purchased inputs, technology, human resources and various firm wide managing functions. The support activities can therefore be divided into procurement, technology development (R&D), human resource management and firm infrastructure. The dotted lines reflect the fact that procurement, technology development and human resource management can be associated with specific primary activities as well as support the entire value chain.

14. Procurement Procurement refers to the function of purchasing inputs used in the firm’s value chain, not the purchased inputs themselves. Purchased inputs are needed for every value activity, including support activities. Purchased inputs include raw materials, supplies and other consumable items as well as assets such as machinery, laboratory equipment, office equipment and buildings. Procurement is therefore needed to assist multiple value chain activities, not just inbound logistics. Technology Development (R&D) Every value activity embodies technology, be it know how, procedures or technology embodied in process equipment. The array of technology used in most companies is very broad. Technology development activities can be grouped into efforts to improve the product and the process. Examples are telecommunication technology, accounting automation software, product design research and customer servicing procedures. Typically, Research & Development departments can also be classified here.

15. Human Resource Management HRM consists of activities involved in the recruiting, hiring (and firing), training, development and compensation of all types of personnel. HRM affects the competitive advantage in any firm through its role in determining the skills and motivation of employees and the cost of hiring and training them. Some companies (especially in the technological and advisory service industry) rely so much on talented employees, that they have devoted an entire Talent Management department within HRM to recruit and train the best of the best university graduates.

16. Firm Infrastructure Firm infrastructure consists of a number of activities including general (strategic) management, planning, finance, accounting, legal, government affairs and quality management. Infrastructure usually supports the entire value chain, and not individual activities. In accounting, many firm infrastructure activities are often collectively indicated as ‘overhead’ costs. However, these activities shouldn’t be underestimated since they could be one of the most powerful sources of competitive advantage. After all, strategic management is often the starting point from which all smaller decisions in the firm are being based on. The wrong strategy will make it extra hard for people on the work floor to perform well.

17. Core Competencies: A core competency is a unique element that can not be easily replicated by other companies. Therefore, a company can identify its core competencies by thinking through how the company is different from other businesses. Understanding Core Competencies The concept of distinctive competencies revolves around making a collective effort to achieve one goal, i.e., delivering the best output. People in an organization with diversified skills collaborate to manufacture or produce the desired end product. The business can then use this end product for its separate units and individual product lines. The idea was first introduced by C.K. Prahalad and Gary Hamel in their article “The Core Competence of the Corporation,” published in Harvard Business Review in 1990. It clearly stated the significance of the core competencies in business in developing core products to be used in its other products.

18. The writers used the analogy of a large tree as a diversified business to illustrate their point. They considered the smaller branches as business units, the roots system as distinctive competencies, the trunk as the core product, and the leaves, flowers, and fruits as end products. According to the core competencies definition provided by Prahalad and Hamel, the existence of the tree, i.e., business and its end products, would be affected if the root system, i.e., core capabilities, is weak. Therefore, when consumers prefer products of a particular brand, the competitors must figure out its distinctive competencies. While allowing a business to expand in different markets, these unique traits add value to the customer service. Since each industry functions differently, the core capabilities might vary for companies based on their operation.

19. Conclusion: Globalization has changed the way industries work by increasing competition, leading to mergers and outsourcing, and creating new opportunities for growth and innovation. It has also made global supply chains more complex and interconnected. As a result, businesses have had to adapt to stay competitive, and new industries and companies have emerged. Overall, globalization has transformed the way industries operate, bringing both benefits and challenges.