1. WHY GO GLOBAL?

2. REASONS FOR GLOBAL MARKETING/BUSINESS Need for sales-growth. Need to reduce costs by sourcing raw materials, inputs, or final products. Need to gain competitive edge-- economies of scale or strategic posturing.

3. SEEKING MARKETS The largest single domestic market--the U.S.--is only 25% of the total world market. 75% is outside. –Coca Cola derives over 70% sales and 80% profits from overseas markets.

4. Second largest market is Japan at 15% of the total world market. Among the European markets, Germany is the largest at only 6% of the total world market. Other countries have even smaller markets.

5. SEEKING INPUTS Minerals Farm Produce Forest Products Labor

6. STRATEGIC POSTURING CAT versus KOMATSU

7. WHAT ARE THE DRIVERS OF GLOBALIZATION TECHNOLOGICAL FACTORS –TRAVEL & TRANSPORT –TELE-COMMUNICATIONS –MEDIA SOCIO-POLITICAL FACTORS –REDUCTION OF TRADE BARRIERS –MARKET LIBERALIZATION –INTERDEPENDENCE

8. “A JET GOES SO FAR--IT BRINGS PEOPLE TOGETHER.”--BOEING. JET TRAVEL IS ONE OF THE MOST EXCITING DEVELOPMENTS OF OUR TIMES. THE FIRST U.S. PASSENGER JET WAS BUILT BY BOEING IN 1958. B-707 COULD CARRY 181 PASSENGERS AT A SPEED OF 550 M/HR. THE JUMBO (B-747) SHOWN HERE DEBUTED IN 1969.

9. AIRCRAFTS TYPESEATSSPEEDRANGE nm B-747-400416565nm/hr7330 (14 Hr) B-777-3003655657250 (14 Hr) B-777-2003015658820 (18 Hr) B-737-8001625302942 A-340-2002395788000 A-330-2002535786400 DC-10-402506005000

10. WORLD TRAVEL FIGURES IN 2000, NUMBER OF PASSENGERS ON SCHEDULED DOMESTIC AIRLINES WAS 1.1 B AND INTERNATIONAL AIRLINES WAS 0.5 B. IN 1988, THE CORRESPONDING FIGURES WERE 0.8 B AND 0.3 B. GROWTH IS EXPECTED TO REMAIN AT ABOUT 5% PER YEAR. Source; ICAO (May 2001)

11. TRAVEL FIGURES FOR U.S. NUMBER OF INTERNATIONAL TRAVERLERS HAS INCREASED FROM 5.5M IN 1960 TO 55.5M IN 2000. AVERAGE DISTANCE TRAVELED HAS INCREASED FROM 1,510 MILES IN 1960 TO 3,322 MILES IN 2000. NUMBER OF DOMESTIC TRAVELERS INCREASED FROM 52.4 M IN 1960 TO 610 M IN 2000, REPRESENTING OVER HALF OF DOMESTIC WORLD TRAVEL. Source: air-transport.org

12. MEGA AIRCRAFTS A3XX-100 IS DESIGNED TO CARRY 481- 656 PASSENGERS AND FLY 8000 NM. BOEING IS CONTEMPLATING A 800-1000 PASSENGER PLANE

13. TRANSPORTATION CONTAINERIZATION HAS BEEN THE BIGGEST SINGLE TECHNOLOGICAL INNOVATION IN SHIPPING. OTHERS INCLUDE: – SIZE – SPEED – HANDLING

14. CONTAINER SHIPS A 40’ CONTAINER CAN CARRY 4403 VCRs OR 10,000 PAIRS OF SHOES. NEWER SHIPS CAN CARRY 3,300 40’ CONTAINERS. USUAL IS 500-1000. A 100 CAR DOUBLE-DECK FREIGHT TRAIN CAN CARRY 200 40’ CONTAINERS.

15. SPEED SINGAPORE-NEW YORK JOURNEY TAKES 21 DAYS WHILE SINGAPORE TO LOS ANGELES TAKES 23 DAYS. AVERAGE TIME TAKEN TO HANDLE AND CLEAR A SHIPMENT IS LESS THAN 1 DAY IN SINGAPORE, 3 DAYS IN THE U.S. AND 15 DAYS IN JAPAN.

16. TRIVIA TIME WHICH PORT HANDLES THE LARGEST VOLUME OF CARGO? (‘99: 326 M MT) WHICH PORT HANDLES THE SECOND LARGEST VOLUME OF CARGO? (‘99: 304 M MT) SOUTH LOUISIANA IS #3 AT 194 M MT Source: infoplease.com/ipa

17. TRIVIA TIME WHICH PORT HANDLES THE LARGEST CONTAINER TRAFFIC? (‘99: 8.10 M 40’ CONTAINERS) WHICH PORT HANDLES THE SECOND LARGEST CONTAINER TRAFFIC? (‘99: 7.97 M 40’ CONTAINERS) LA IS #6 AT 2.2 M 40’ CONTAINERS Source: infoplease.com/ipa

18. WORLD AIR CARGO IN 1999, THE WORLD AIR CARGO WAS ABOUT 28.2 m mt (67.5 b ton-mile), OF WHICH 17.2 m mt (57.9 b ton-mile) COMPRISED OF INTERNATIONAL FREIGHT. A JUMBO SHOWN HERE CAN CARRY UP TO 124 mt OF CARGO OR ABOUT 5 40’ CONTAINERS. Source: icao.int/icao/en/nr/pio200106..htm

19. AIR TRANSPORT IN THE U.S. U.S. INTERNATIONAL AIRCARGO INCREASED FROM 1.30 b ton-miles IN 1970 TO 13.2 b ton-miles IN 2000. U.S. DOMESTIC AIRCARGO INCREASED FROM 2.2 b ton-miles IN 1970 TO 7.9 b ton-miles IN 2000. WHILE ONLY 5% OF U.S. TRADE BY WEIGHT IS HANDLED BY AIR, IT CONSTITUTES 25% OF TRADED VALUE. Source: air-transport.org

20. TRUCKING CONTAINERIZATION HAS REVOLUTIONALIZED TRUCKING TOO. U.S. IMPORTS FROM MEXICO 20.7 M MT (2000) BY TRUCK VALUED AT $88.7 B U.S. IMPORTS FROM CANADA 65.7 M MT (2000) BY TRUCK VALUED AT $127.8 B Source: bts.gov/ntda/tbscd/reports/nat_m2000.html & 2000.html Source: bts.gov/transborder/reports/weight/new_mlb20001.html & clb2001.html

21. RAIL U.S. IMPORTS FROM MEXICO 6.6 M MT (2000) BY RAIL VALUED AT $21.1 B U.S. IMPORTS FROM CANADA 60 M MT (2000) BY RAIL VALUED AT $49.7 B.

22. CAPACITY EVEN IN 1960, TRANSATLANTIC CABLE COULD CARRY ONLY 138 CONVERSATIONS SIMULTANEOUSLY. NOW A FIBER OPTIC CABLE CAN CARRY UP TO 1.5M CONVERSATIONS. WHAT DO YOU THINK HAPPENED TO COST??

23. MEDIA THE REACH OF TELEVISION AND PRINT MEDIA HAS BECOME GLOBAL. ADVERTISING COMPANIES HAVE BECOME GLOBAL. IT IS EASY TO REACH PEOPLE IN DIFFERENT COUNTRIES MORE COST EFFECTIVELY.

24. SOCIO-POLITICAL FACTORS REDUCTION OF TRADE BARRIERS MARKET LIBERALIZATION INTERDEPENDENCE

25. TRADE LIBERALIZATION EXPORT VOLUME HAS INCREASED OVER 17 TIMES SINCE 1950 (FROM $420B IN 1950 TO $7300B IN 1999) INVESTMENT HAS INCREASED OVER 25 TIMES SINCE 1950 (FROM $14B IN 1950 TO $350B NOW). TARIFFS AND RESTRICTIONS HAVE FALLEN WORLDWIDE. GATT/ WTO Source: worldbank.org/data/databytopic/databytopic.html#INTERNATIONAL%20ECONOMICS

26. Emerging Market Access Index Openness to Trade Singapore Chile Hong Kong Estonia Peru Slovenia South Africa Lithuania Venezuela Taiwan Kuwait Latvia Romania Israel Mexico Zimbabwe Hungary Argentina Colombia Turkey Czech Rep. Egypt Philippines Poland South Korea Bulgaria Thailand Slovakia

27. BENEFITS OF FREE TRADE SPECIALIZATION LEADS TO EXPLOITATION OF COMPARATIVE ADVANTAGE. CONSUMERS HAVE GREATER CHOICE. AN OPEN DOMESTIC MARKET IS A SOURCE OF COMEPTITIVE STRENGTH. COUNTRIES WITH OPEN TRADE HAVE DEVELOPED MUCH FASTER.

28. INTERDEPENDENCE TRADE AND INVESTMENT LIBERALIZATION HAS LED TO DEEPER FORMS OF ECONOMIC INTERDEPENDENCE AMONG NATIONS.