The Global Marketplace

The Global Marketplace

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Rosow, Jerome M. Facts on File Publications, 1988
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IN THIS SUMMARY

Global competition tends to reduce the importance of home markets. There must be a shift, therefore, away from the classical vertical organizational structure to a horizontal relationship where there is interdependence between the home country and overseas subsidiaries. Siemans AG, one of the world's largest electrical companies (operating in 127 countries), has strong convictions as to the meaning, value, and positive effect of international trade. Siemans' home market accounts for only six percent of its worldwide market, it has increased exports while simultaneously integrating the com-pany into the economies of the consuming countries--50 percent of Siemans' international business rests on direct investments (espe-cially in manufacturing) in the consuming countries.The convergence of computers and telecommunications has cre-ated new networks that stimulate and support the world marketplace for consumer goods, reinforcing the internationalization of tastes, style, and, quality. This information explosion has had a staggering effect on miniaturization, speed, costs, reliability, and diversifica-tion.Today's consumers, worldwide, seek the same types of goods and services. Multinational corporations such as Pfizer were the first institutions to respond to the global demand for products. Operating on the principle that the way to "go international" was to "go local," Pfizer established subsidiaries in the early 1950s that were better equipped than the central office to handle sales in their particular areas.