How Far Is the World Still not Homogenous - Assignment Example

How far is the world still not homogenous? Name Professor Institution Course Date How far the world is still not homogenous and how the situation influence the decisions made by multinational companies In observing the run of the events in the recent times, there is no way one can ignore the fact that the world has changed overtime. Similarly, globalization has increased market targeting and companies look for foreign markets to expand their production and sales of their products (Holt, Quelch & Taylor 2004). Despite development in the world markets as a result of increase in a variety of products and service offered and advancement of technology, the world or products are still not homogenous. Christopher and Peck (2004, p.7) claimed the markets still have challenges resulted by different market structure, cultures, supply chain systems, technology and needs. Therefore, this essay will discuss how far the world is still not homogenous. In addition, it will evaluate how this situation influences the decisions made by multinational companies. Some of the factors which contribute to why world market is not homogenous are culture, communication, technology, product feature and price, and market structure. Homogenous means something which is uniform or has the same nature. From the market perspective, it means markets of the same structure or which has the same composition in terms of products and service. Eichengreen, Chiţu and Mehl (2014) stated that in the product perspective, homogenous means products which cannot be differentiated from others from different producers or suppliers. In a nutshell, such products have similar quality and physical features similar to that of other suppliers. In this situation, products are easily substitutable. However, such situation has never been completely achieved in world markets because managers try to be unique enough to gain competitive advantage. Maude (2011) argued that even though, managers try to unique, the uniqueness must embrace local taste in terms of product feature, communication or selling techniques. According to Holt, Quelch and Taylor (2004) the strategy is called termed as glocal and has been there for quite sometimes. The world is far from achieving homogenous state because of cultures. Global brand often do not escape being noticed because they have not been in consumer minds for a long time. People view global different from the local and think they can do more harm but at the same time can be of high quality (Holt, Quelch & Taylor 2004). To grasp the attention of the consumers in the international markets, strategists suggest that companies ought to consider about the culture of such economies. It is obvious that national cultures are different and shape up the customers’ preferences and tastes. For instance, Ralston et al (2008) asserted that cultures among Asian, and American and European nations are categorized as Eastern and Western cultures and are different from each other. In fact, business experts believes that understanding the western culture in terms of business etiquette and how it varies from Chinese culture on how to build create relationships, interact and communicate with their associates is vital in closing business deals (Zhu, Nel & Bhat 2006). Using China and America as a case study, Maude (2011) contended in America culture, workmates could sporadically spend happy coffee to know one another at a personal level. This is not accepted during organization-sponsored events. In a nutshell, many colleagues American cultures do not mix personal and professional lives. On the contrary, Chinese culture allows knowing colleagues at the personal level and fostering genuine trust (Wilson & Brennan 2010, p.655). They consider that trust is crucial to creating confidence required to conduct business with the associates. In addition, in Chinese culture, one is required to know business partners, the etiquette of communication and how to socialize. Ralston et al (2008, p.12) posited that the Chinese also invest heavily on guanxi or relationship because it pays later. Culture has also affected product features and packing hence making the world not become homogenous. The growth of the global culture does not imply that the consumers now share values and taste. Geert, Hofstede and Minkov (2010) argued that usually, people from dissimilar countries have different opinions; take part in a joint conversation and borrowing from common symbols. Global brand forms the major symbol in such conversation. Many entertainment and sport celebrities today have been turned to the lingua franca by companies and used to brands (Holt, Quelch & Taylor 2004). Consumers subscribe to particular features to the global products and apply such characteristics as their taste when deciding on what to purchase. As stated earlier, packaging feature has cultural symbol and companies must adhere to the creativity as perceived by a community (Valdillez 2012, p.12). The world is in a modernization process and there have been constant change of new ideas which has turned out to be creative for global products. However, each country of the world has its unique customs and culture, hence packaging of a product could be different. For instance, Chao (2010, p.22) argued that Italy’s design and packing emphasize on strong romantic features borrowed from the Italian Renaissance culture. On the other hand, Denmark and Germany packaging have some characteristics of coherent and order, while the US has some degree of the global culture (Ralston et al 2008, p.11). The situation of the US is attributed tom the fact that the country is some features of civilization and multicultural in nature. The company cannot understand the packing design until they understand the feature of culture of specific ethnic or regional group in terms of values, philosophy thinking, human sociology and literature (Mooij 2005). Colors and logos normally have different meanings attached to them in different societies. Lin, Koroglu and Olson (2012, p.438) stated that even though companies would want to shed some of the cultural connotation of colors and logos, the fear of offending members of the society is real and marketers cannot ignore this fact. Therefore, as companies cross borders to produce and sell products, they still adhere to color taste and preferences. Brand strategist argues that colors influence brand preferences and taste among the consumers (Valdillez 2012, p.18). Packaging influence can be blamed for Kentucky Fried Chicken loss in Japan. Okazaki, Mueller and Taylor (2010, p.24) claimed that the company entered the Japanese market while using the bucket for carrying fried chicken as they use in the US. Upon researching on the customer attitude towards the bucket, they realized it was appetizing and it was why the company was making a loss. The situation prompted a change of bucket packaging. The image or package creates value within the lives of people and part of the visual environment and culture (Ferrell and Hartline 2011). Differences in the supply chain have also ensured that the world is not homogenous. Today, the multinational firms look to grow its business through expanding into different markets and also seeking to reduce costs by means of economies of scale in production, purchasing and focused manufacturing operations (Helen 2004). Whereas the globalization logic is great, it comes with some few challenges. The reality is that the world is not currently and products categories present numerous variations. Helen (2004, p.413) argued that unless high degree of management, intricate logistics of coordinating international supply chains could lead to higher costs. On one spectrum, the company is needed to provide domestic markets with the wide range which they need whilst still maintaining the edge of standardized international production and on another spectrum, it is required to co-ordinate the relationship in the international supply chain from the sources to the end user (Christopher & Peck 2004, p.5). It is a proof that efficient logistics systems are critical for the domestic operations, and it’s equally significant for the global operations as well. According to Helen (2004, p.416), logistic and supply experts believe that operations of global logistics have to accommodate not just local conditions, but must also cope with intensified uncertainties related to demand, distance, documentation and diversity. From such point of view, there is a need for the global logistics and supply managers to create a wide create an array of expertise and capability. The effective status never been achieved in the past which makes the world not homogenous. At the moment, several languages are need for both product and the documentation for global operations. The problems arise because of language disparities when a product is made for a particular language and country (Christopher & Peck 2004, p.7). The product proliferation owing to the language prerequisites has reduced due to multilingual packaging. The situation is not accepted approach in most cases. Another challenge to achieving homogenous status is the documentation style. Christopher and Peck (2004) posited that multilingual form of documentation is needed for each country the shipment passes yet it is not achievable because there are many countries to the destination. In addition, some countries require that documentation customs are done in local language. The process leads to increase in effort and time for the global operations since the complex documents require translation prior to shipment (Helen 2004, p.415). International transportation is also difficult because particular services might not be offered in some countries, particularly the third world nations. Disparity in the systems integration also presents a challenge to attaining world homogeny. Despite the need to improve co-ordination by means of system integration, many supply chains are still stuck in the earlier systems where there was less commonality between local and global system in the international companies (Christopher & Peck 2004, p.9). In fact, few companies have incorporated international logistic systems even as the world develops. Furthermore, differences in business alliance have hindered achievement of homogeny. Christopher and Peck (2004, p.9) affirmed that the international alliance between services suppliers and carriers is more important than local alliances and operations. The absence of such alliances means that the companies operating domestically must preserve contacts with manufacturers, suppliers, services providers and retailers across the globe. It is time consuming to uphold such business relationships. Accessing international market is always easy when provided by the global airlines as it reduces the inherent risks (Helen 2004, p.417). Market prices are also not similar across the globe for the same products. The countries with higher income normally get high prices compared to lower income countries. High prices in lower income counties cannot attract more customers, hence companies normally lower their prices to get a large customer base for their products. Wilson and Brennan (2010, p.659) argued that China has taken advantage of the situation and now makes counterfeit products and sells them at a cheaper price. The research shows that China is the leading counterfeit products producer in the world (Wilson & Brennan 2010, p. 661). The situation makes it difficult to achieve uniform prices in the global markets. The complexity in achieving homogeny in the market has influenced the decisions made by multinational companies. Ferrell and Hartline (2011) opined that the rigidity of the market to change despite globalization has made the managers to make decision which favor the company. For instance, managers make price decisions which will attract customers to their business rather than global “standard” prices. An example would be airline companies which try to lower their prices in order to get more customers than their competitors. When Tiger Airline introduced low prices for Melbourne-Darwin at A$79.99, Jetstar responded by lowering their prices to A$79 to counter its competitor (Damon 2010). The decision ensures that the company improves its profits and gain market share. From another perspective, experts believe since the world is not homogenous companies take advantage of the situation to make decision. The managers’ decisions are influenced by market conditions and the slight change prompt change of strategy. For instance, Ferrell and Hartline (2011) contended that when consumers of fast-foods became health conscious, companies offering such products had to diversify into health products to continue satisfying consumer needs. In conclusion, research has confirmed that the world is far from being homogenized. The essay has established that even though the world is trying to embrace global culture, countries still have unique values and norms which they cannot just shed off even with time. Such unique culture determines their communication, business relationship, product packaging, preferences and tastes. In addition, the essay has found that world economies have disparities in terms of income, hence world prices cannot be the same. Challenges of supply chain and logistics have also hampered the world from attaining homogenous. Some of the challenges here consist of product documentation and language. These issues have influenced managers’ decision on international operations. The situation has enabled companies to market product development and price decisions. The state of not being homogenous has enabled managers to lower and increase price and develop new products to gain market advantages. References Chao, Z 2010, Analysis of Multi-Cultural Influences of Modern Packaging Design, Scientific Research, pp. 21-23. Damon, K 2010, Cut-price Tiger Airways builds up fleet, The Australian. 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