On a political map, country borders are clear as ever. But on a competitive map, financial, trading, and industrial activities across national boundaries have rendered those political borders increasingly irrelevant. Of all the forces chipping away at those boundaries, perhaps the most important are the emergence of regional trading blocs (e.g., NAFTA, the European Union, and MERCOSUR), technology developments (particularly in the IT area), and the flow of information.
Today people can see for themselves what tastes and preferences are like in other countries. For instance, people in India watching CNN and Star TV now know instantaneously what is happening in the rest of the world. A farmer in a remote village in Rajasthan in India asks the local vendor for Surf (the detergent manufactured by Unilever) because he has seen a commercial on TV. More than 10 million Japanese traveling abroad every year are exposed to larger-sized homes and much lower consumer prices abroad than at home. Such information access creates demand that would not have existed before.
The availability and explosion of information technology such as telecommuni¬cations has forever changed the nature of global competition. Geographical boundaries and distance have become less a constraint in designing strategies for the global market. The other side of the coin is that not only firms that compete internationally but also those whose primary market is home-based will be significantly affected by competition from around the world.
The firm is essentially a collection of activities that are performed to design, procure materials, produce, market, deliver, and support its product. This set of interrelated
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