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Implications for the Globalization of Markets
In addition to the globalization of production, technological innovations have also facilitated theglobalization of markets. Low-cost global communications networks such as the World Wide Web arehelping to create electronic global marketplaces. As noted above, low-cost transportation has made itmore economical to ship products around the world, thereby helping to create global markets. For example, due to the tumbling costs of shipping goods by air, roses grown in Ecuador can be cut and soldin New York two days later while they are still fresh. This has given rise to an industry in Ecuador thatdid not exist 20 years ago and now supplies a global market for roses. In addition, low-cost jet travel hasresulted in the mass movement of people between countries. This has reduced the cultural distance between countries and is bringing about some convergence of consumer tastes and preferences. At thesame time, global communication networks and global media are creating a worldwide culture. Manycountries now receive U.S. television networks such as CNN, MTV, and HBO, and people watchHollywood films the world over. In any society, the media are primary conveyors of culture; as globalmedia develop, we must expect the evolution of something akin to a global culture. A logical result of thisevolution is the emergence of global markets for consumer products. The first signs of this are alreadyapparent. It is now as easy to find a McDonald’s restaurant in Tokyo as it is in New York, to buy an iPodin Rio as it is in Berlin, and to buy Gap jeans in Paris as it is in San Francisco.Despite these trends, we must be careful not to overemphasize their importance. While moderncommunication and transportation technologies are ushering in the “global village,” significant nationaldifferences remain in culture, consumer preferences, and business practices. A firm that ignoresdifferences between countries does so at its peril. We will stress this point repeatedly throughout this book and elaborate on it in later chapters
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