The article written by Theodore Levitt on the globalization of the market mainly focuses on the difference between ‘multinational’ and ‘global’ corporations operating throughout the world today. The author describes how the concept ‘global’ being quite new in the field of marketing than the concept ‘multinational’ is threatening the latter due to the change in the mentality and preferences of customers worldwide which have turned into what he calls “relentlessly homogenized” (Levitt 3). He has rightly called the concept of global corporations absolute and multinational corporations obsolete. He presents a clear picture of how the national or local cultures today are not getting enough importance in front of the “high tech” and “high touch” global products that have flooded the worldwide market.
The author has presented wonderful examples of people craving modern western goods at low prices from all over the world and every sphere of life. People from interior areas of poor countries, countries affected by war and fundamentalism, and fighting for their day-to-day lives are not exceptions. That has led to the smuggling of western clothing electronic goods, cosmetics, automobiles, and even pirated movies. His examples support very well the idea that he wanted to present in the article.
The author has stated that the customer of today wants standardized products available as it is throughout the world rather than customized products modified to suit their national or local cultures. The example of Coca-Cola and Pepsi Cola has been rightly stated by him as an example of success which has conquered the taste buds of people irrespective of their national, religious, or ethnic differences. According to him, the whole world loved them equally with their same “taste, flavor, consistency, effervescence and aftertaste” (Levitt 3) everywhere. The author thinks this success was not something exceptional. He opines rightly, “Indeed, their global reach would be even greater were it not for artificial trade barriers” (Levitt 3).
It cannot be denied that in today’s market the cost of the products matters a lot. The combination of reliability, quality, price, and delivery makes a perfect package for a customer anywhere in the world for “products that are globally identical with respect to design, function and even fashion” (Levitt 4). The author has defined “scarcity, the difficulty of acquisition and transience” (Levitt 7) as the driving force of the market today. The customers, though considered as the king, are not from royal status everywhere but they want products of the same high grade in a price range they can afford. The ‘global’ companies are therefore providing quality things at low prices and strengthening their hold over the market whereas the multinationals that focus on high-priced customized products are lagging in competition (Hill 27).
The author however states that the products that are sold to different countries by a global company should suit the rules of that country. He states the example of Japan which exports cars with left-hand drives to some countries and right-hand drives to some. It won’t be correct to think that the Japanese companies are not global because “National rules of the road differ, and so do distribution channels and languages. Japan’s distinction is its unrelenting push for the economy and value enhancement” (Levitt 5).
The whole article is extremely mind-capturing and informative. The author has been able to able to make it clear why it is necessary to go global rather than being multinational. The article has been supported by suiting examples and proverbs. He has compared global companies with a hedgehog who knows everything about a great thing and the multinational with the fox who knows a lot about a lot of things. The article is a successful effort of comparing the two.
Works cited
Hill, Charles W. L. International business: competing in the global marketplace. Ed 4. Boston: McGraw-Hill/Irwin, 2003.
Levitt, Theodore. The globalization of markets. The McKinsey Quarterly, 17.2, (1984): 2-20.