To achieve worldwide competitiveness, many managers would quickly move any factory anywhere in the world where they could get cheaper or better materials, labor, and vendors, and where laws and governments were more congenial. However, the conquest of global markets will be the reward of the most efficient producers. Globalization has made worldwide competitiveness critical for survival.

Industries and companies that previously enjoyed relatively safe home markets now find themselves faced with the possibility of new competition from companies that had never attempted to market products in their part of the world. Thus, globalization presents both a major threat and a major opportunity, particularly in developed countries. Since demand has become homogeneous across borders, producers of major consumer goods today can use similar marketing concepts and approaches to reach the entire Western world. In the 20-year period from 1970 to 1990, world trade will have more than doubled in importance, from 12 percent of total world production to 27 percent (McKinsey and Company, Inc., 1987). A decade of peace and increasing governmental advocacy of free trade in all the major developed countries has lowered trade barriers and given a renewed impulse to global trade. Many forces are pushing for globalization. The evolution of supply, demand, and environmental factors is driving companies toward operating as if a homogeneous worldwide market existed in their industries. G LOBALIZATION IS A KEY TREND in the business world today.

Globalization of Industry Through Production Sharing

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