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Downloadable Resources Open interactive popup.An ongoing shift in global economic activity from developed to developing economies, accompanied by growth in the number of consumers in emerging markets, are the global developments that executives around the world view as the most important for business and the most positive for their own companies' profits over the next five years. Executives also identify two other critical positive aspects of globalization: technologies that enable a free flow of information worldwide and, increasingly, global labor markets. Logic pro 9 torrent download. These four trends, of the ten we asked about, also are the ones that the biggest share of respondents—around half—say their companies have taken active steps to address.In this sixth annual survey asking executives about the forces shaping the world economy, 1.

• Drivers Of Globalisation Essays
• Which Of The Following Is A Driver Of Globalization
• Factors Driving Globalization

The online survey, in the field in March 2010, generated responses from 1,416 executives around the world, representing the full range of industries, regions, functional specialties, and seniority. There is little change in how respondents view the importance of global trends compared with previous years—either for business in general or for their own companies' profits (Exhibit 1). Clearly, the financial crisis and economic downturn have not shaken these key trends.

Continued faith in the positive effects of globalization combined with a move away from short-term planning likely reflects rebounding optimism about global economic prospects and is consistent with the findings of other McKinsey surveys on the economy. See, for example, ',' mckinseyquarterly.com, April 2010.In addition to our annual questions on individual global trends, this year's survey explores for the first time five interconnected themes that highlight the opportunities and challenges faced by global economic integration itself and by companies seeking to profit from it: growth in emerging markets; labor productivity and talent management; the global flow of goods, information, and capital; natural-resource management; and the increasing role of governments. We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at:The findings show that the global economy faces significant challenges as it continues to integrate. For example, most respondents—63 percent—expect increased overall volatility to become a permanent feature of the global economy, and another 23 percent see sharply higher levels of volatility that will undermine the economy's robustness. In addition, high levels of public debt are a headache in Europe and North America, where most executives fear the debt will have a negative impact on GDP growth.There are specific corporate challenges too.

Drivers Of Globalisation Essays

Half of the respondents are only somewhat optimistic they will be able to find the right talent to meet their companies' strategic goals. Likewise, only half of the executives reported that their companies have taken steps to address the shift in global economic activity from developed to developing economies—the force that is reshaping the global economy more than any other.

Growth and risk management in emerging marketsEmerging markets, with populations that are young and growing, will increasingly become not only the focus of rising consumption and production but also major providers of capital, talent, and innovation. This will make it imperative for most companies to succeed in emerging markets. However, no more than 40 percent of executives at companies headquartered in developed economies expect a quarter or more of revenues over the next five years to come from emerging markets—and 10 percent expect none.To capture growth from emerging markets, the actions most often taken—each cited by around half of the respondents—are building a local presence, developing partnerships or joint ventures with local companies, recruiting talent from emerging markets, and developing new business models (Exhibit 2). Executives representing Chinese and Indian companies report they are developing new business models at a significantly higher rate than companies from any other region.

Perhaps more surprising, respondents at companies headquartered in North America report significantly lower rates of actions to capture emerging-market growth than those from any other region, with fully 20 percent reporting no actions at all taken to capture emerging-market growth. In addition, large and public companies significantly outpace small and private ones in pursuing actions to capture emerging-market growth. We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at:On risks faced by their companies in emerging markets, executives cite breach of intellectual property (40 percent), volatility of currency or exchange rates (38 percent), geopolitical instability (26 percent), and lower safety and quality standards (26 percent) as the top four. Executives at North American, high-tech, and telecom companies are most concerned about IP, while companies in the financial sector worry most about currency volatility and energy companies about geopolitical instability.

Which Of The Following Is A Driver Of Globalization

Labor productivity and talent managementLow birth rates and graying workforces in most developed economies will make it hard for them to achieve steady growth unless they continue to make sizable gains in labor productivity. A majority of all respondents, 62 percent, do expect moderate gains in the next five to ten years in developed economies, and another 13 percent expect the gains to be significant.Nonetheless, developed and developing economies alike must become more innovative at sourcing talented employees, whether by tapping global labor markets or making better use of older workers. Just less than 40 percent of executives are 'very' or 'extremely confident,' and around half are 'somewhat confident,' that their companies will have the right kinds of talent to meet their strategic goals over the next five years. Notably, respondents at companies based in developing markets largely share the same views as those from developed markets on this point.The greatest projected talent shortfalls are in three functions—management, R&D, and strategy—with significant variations between executives in different regions (Exhibit 3). Interestingly, executives in China are much more concerned about a shortage of management talent than they are about R&D specialists. For India, it is the reverse. Companies are shifting their strategic planning from crisis mode to a more balanced consideration of short-term profitability and long-term strategic issues: one-third now focus equally on the short and long terms, compared with one-fifth in 2009.When indicating where their companies will find the talent they need, executives most often cite talent from emerging markets to work there (44 percent), new talent entering developed labor markets (41 percent), and talent from developed markets deployed to emerging markets (35 percent).

North American companies, their executives say, are counting more than all others on sourcing talent in developed economies, including retrained talent (30 percent) and talent from increased labor pools due to delayed retirement (25 percent). This is consistent with the lower number of actions North American companies are taking to capture emerging-market growth. Global flows of goods, information, and capitalExecutives are generally optimistic that the relatively free flow of goods and capital—two core drivers of globalization—will survive the financial crisis and the economic downturn. However, few see much further progress occurring in the next five years, a finding that is consistent with the modest hopes for multilateral cooperation also seen in this survey.Sixty-two percent of respondents expect moderate increases in global trade flows, but just 20 percent see a significant increase.

As for the integration of capital markets, a majority—59 percent—expect capital flows of the major developed economies to be integrated while many other countries continue to restrict capital flows. Another 18 percent predict that capital markets will be mostly integrated, with only a few countries restricting flows. Respondents in North America and Europe are least optimistic, with only 1 and 2 percent, respectively, expecting fully integrated, seamless capital markets; in contrast, 5 percent of executives in China and Latin America think this will be the case.The free global flow of information has already resulted in radical pricing transparency and new networks of engaged consumers, and this probably is only the beginning. Disruptive changes in consumer behavior could have great impact on business over the next five years. Executives expect that the most powerful effects on their companies will be increased innovation, greater consumer awareness and knowledge, and increased product and service customization (Exhibit 4). We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you.

Please email us at: Natural-resource managementExecutives' concerns about the impact that increasing constraints on the supply or usage of natural resources will have on their companies' profits appear to be subsiding despite the prominence of these issues in the public debate today. Twenty-five percent of respondents now expect this trend to have a negative effect on their company's profits, down from 28 percent in last year's survey and 33 percent two years ago.Energy and manufacturing continue to be outliers. Forty-five percent of manufacturing-sector executives expect negative effects on profits. Among energy executives, few are indifferent: 34 percent expect a negative impact, but a much larger share—59 percent—see a positive impact on profits.Only one-third of all respondents—and four out of ten in North America—profess not to consider natural-resource constraints to have a significant role in their strategies. When executives select the actions their companies are taking to ensure access to the resources they need, the most common response is that they are conserving energy to reduce the need for natural resources (Exhibit 5).

We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: The increasing role of governmentsExecutives in Europe and North America are haunted by the perception of crippling public-debt levels: 54 and 61 percent, respectively, think that public-debt levels will have a 'significant' or 'severely negative' impact on GDP growth in their home markets. In contrast, 45 percent of respondents in China and 24 percent in India expect that the level of public debt will have a 'positive' impact or 'no impact' in their home markets.In a pattern consistent across nearly all regions, executives view government's role in their companies' home markets over the next five years somewhat differently than do executives from other regions. For instance, 64 percent of all respondents characterize the Chinese government as the principal actor in that country's economy (Exhibit 6), compared with only 49 percent of respondents based in China.Respondents were also asked whether government actions in the previous 12 to 18 months have increased the likelihood of companies to invest in certain countries. China scored highest, with 27 percent of all respondents saying their companies are 'more' or 'much more likely' to invest there.

Smaller groups of respondents say the same for India (25 percent), Brazil (24 percent), and the United States (21 percent). Russia fares the worst, with only 9 percent saying their companies are 'more likely' to invest there; 25 percent say their companies are 'less likely' to invest.

Updt 13 Nov 2108 Supply chain capabilities are guided by the decisions you make regarding the five supply chain drivers. Each of these drivers can be developed and managed to emphasize responsiveness or efficiency depending on changing business requirements. As you investigate how a supply chain works, you learn about the demands it faces and the capabilities it needs to be successful. Adjust the supply chain drivers as needed to get those capabilities.The five drivers provide a useful framework for thinking about supply chain capabilities.

Decisions made about how each driver operates will determine the blend of responsiveness and efficiency a supply chain is capable of achieving. The five drivers are illustrated in the diagram below:1. PRODUCTION – This driver can be made very responsive by building factories that have a lot of excess capacity and use flexible manufacturing techniques to produce a wide range of items. To be even more responsive, a company could do their production in many smaller plants that are close to major groups of customers so delivery times would be shorter. If efficiency is desirable, then a company can build factories with very little excess capacity and have those factories optimized for producing a limited range of items. Further efficiency can also be gained by centralizing production in large central plants to get better economies of scale, even though delivery times might be longer.Simulate decisions about production in by defining different products in the supply chain, and define the facilities that make those products and their daily production rates.2. INVENTORY – Responsiveness can be had by stocking high levels of inventory for a wide range of products.

Additional responsiveness can be gained by stocking products at many locations so as to have the inventory close to customers and available to them immediately. Efficiency in inventory management would call for reducing inventory levels of all items and especially of items that do not sell as frequently. Also, economies of scale and cost savings can be gotten by stocking inventory in only a few central locations such as regional distribution centers (DCs).Decisions about inventory are simulated by setting production and delivery schedules for products at facilities, and by defining on-hand amounts for different products at facilities throughout the supply chain.3. LOCATION – A location decision that emphasizes responsiveness would be one where a company establishes many locations that are close to its customer base.

For example, fast-food chains use location to be very responsive to their customers by opening up lots of stores in high volume markets. Efficiency can be achieved by operating from only a few locations and centralizing activities in common locations. An example of this is the way e-commerce retailers serve large geographical markets from only a few central locations that perform a wide range of activities.Simulate this decision by the way you locate your facilities (factories, warehouses and stores), and the storage capacities and operating expenses you define for those facilities. The screenshot below shows an example of this.(click on screenshot to see larger image — from case study)4. TRANSPORTATION – Responsiveness can be achieved by a transportation mode that is fast and flexible such as trucks and airplanes.

Many companies that sell products through catalogs or on the Internet are able to provide high levels of responsiveness by using transportation to deliver their products often within 48 hours or less. FedEx and UPS are two companies that can provide very responsive transportation services.

And now Amazon is expanding and operating its own transportation services in high volume markets to be more responsive to customer desires. Efficiency can be emphasized by transporting products in larger batches and doing it less often.

The use of transportation modes such as ship, railroad, and pipelines can be very efficient. Transportation can also be made more efficient if it is originated out of a central hub facility or distribution center (DC) instead of from many separate branch locations.Simulate transportation decisions in SCM Globe by the modes of transportation (truck, railroad, ship, airplane) you select to move products between facilities, and by the delivery routes and frequencies used.5. INFORMATION – The power of this driver grows stronger every year as the technology for collecting and sharing information becomes more wide spread, easier to use, and less expensive. Information, much like money, is a very useful commodity because it can be applied directly to enhance the performance of the other four supply chain drivers. High levels of responsiveness can be achieved when companies collect and share accurate and timely data generated by the operations of the other four drivers. An example of this is the supply chains that serve the electronics market; they are some of the most responsive in the world.

Companies in these supply chains, the manufacturers, distributors, and the big retailers all collect and share data about customer demand, production schedules, and inventory levels. This enables companies in these supply chains to respond quickly to situations and new market demands in the high-change and unpredictable world of electronic devices (smartphones, sensors, home entertainment and video game equipment, etc.).SCM Globe simulations generate daily performance data on operating costs and inventory levels for all the facilities in the supply chain. As you run a simulation you can see what is happening from end to end across your supply chain. At present most companies don’t have access to this kind of data about the overall status of the supply chains they participate in — but that will change as all markets take on the high-change and unpredictable nature seen in the electronics market.The table below summarizes what can be done to guide the five supply chain drivers toward responsiveness or efficiency. Companies and supply chains continually adjust their mix of responsiveness and efficiency as situations change.Over the long run, the cost of one driver — Information — continues to drop while the cost of the other four drivers continues to rise. Companies that make best use of information to increase their internal efficiency, and increase their responsiveness to external supply chain partners will gain the most customers and be the most profitable.When to be Efficient and When to be ResponsiveEfficiency is good — Efficiency drove the economy of the 20th century.

Factors Driving Globalization

The push for efficiency increased productivity and lowered the prices of products from automobiles to home appliances thus making them available to a wide segment of the population. Yet efficiency requires two things that are becoming much harder to find. The first thing is predictability.

To efficiently plan and manage production and distribution of products you need to know what the demand will be for those products, and you need to know what the cost of raw materials will be and what the selling prices will be for the products. Then you can optimize your operations to produce the right amounts at the right prices and maximize profits.Efficiency requires one more thing — stability. You need to know that demand and prices will remain relatively stable for some number of years (5 or 10 years or more). Because then you can build factories and stores and transportation infrastructure to enable your efficient operating model.

Efficiency is best when producing relatively simple commodity products and services that sell in more predictable and stable markets.Responsiveness is better — In the 21st century, responsiveness is what drives the economy. Responsiveness is what drives continuous innovation in products and technology and continuous change in the ways we organize businesses and serve customers.

The big companies of the 20th century were efficient manufacturing companies (Ford, GM, US Steel, Kodak, Whirlpool etc.), but the big companies of the 21st century are responsive service and technology companies (Alibaba, Amazon, Apple, Facebook, Google, Starbucks, Tencent, etc.). All these 21st century companies certainly need to be efficient, but their success is based mostly on their ability to sense and respond quickly to changing markets and evolving customer desires. Lowest price is not always the deciding factor in purchasing decisions; people want what they want. They want products and services that respond quickly and meet their needs and desires.Apple and Starbucks do not sell the lowest priced laptops or cups of coffee, nor does Porsche make the lowest priced cars, but as long as people value the quality and innovation offered by those companies and others like them they will pay more for their products. Home delivery of everything from clothes to groceries costs a bit more, but people value and pay for the responsiveness and convenience of those services.

Responsiveness is best when providing more complex and unique products and services that sell in continuously changing markets shaped by evolving technology and new customer needs and desires.However, even within supply chains that emphasize overall responsiveness, there are still segments of those supply chains that should focus on efficiency. For example, segments of supply chains that connect factories with warehouses and distribution centers should be as efficient as possible. In most cases they should use the most efficient transportation modes and delivery schedules. And segments of supply chains that connect warehouses to end use consumers should usually focus on responsiveness and use transportation modes and delivery schedules that emphasize responsiveness because customers have come to expect fast delivery of products.

In every supply chain some operations will need to focus on efficiency and others on responsiveness. That mix continues to shift over time as customer preferences and market conditions change.New technologies such as robots, drones, artificial intelligence and 3D printing are making big impacts on how supply chains operate.

And yet after all is said and done, these new technologies can be employed to do one of two things: increase efficiency or increase responsiveness (or some blend of the two). See our blog article “” for ideas about how new technologies can be used to improve efficiency and responsiveness of the supply chain drivers, and create supply chains that become competitive advantages.One company making good use of information and technology to manage their supply chain drivers is Zara Clothing Company. Zara’s supply chain is a big competitive advantage (screenshot below shows design of Zara’s supply chain in Spain). It sells unique clothing products in a constantly changing market shaped by popular fashion and new customer desires. See our case study about how Zara’s supply chain makes it’s unique business model such a success – “ “.is a “sandbox” where you can model real supply chains or design new ones anywhere in the world and run simulations to see how well they work. We are glad to provide a free evaluation account to instructors, students and supply chain professionals interested in exploring supply chain simulations — click here to request an account —Part of this article is excerpted from my book, 2018.