- Summary of articles
In this article, The Globalization of Markets, Theodore Levitt is quick to point out that world markets have become more integrated as a result of technological and communication advancements. Many companies have been able to relocate from their parent companies to new host countries. According to Levitt, different territories have different cultures that inform the kind of preferences and tastes that customers have regarding different products. However, through globalization new products have been introduced in new territories. Many cultures have begun to accept some products that were not indigenous to their cultures.
Levitt argues that world preferences and tastes in relation with different products is gradually becoming homogeneous (Levitt 2). Consumers across the globe have begun to demand the same products. As a result in the homogeneity of products, different Multinational Companies producing the same goods have been forced to compete for the same consumer base. For these enterprises to be able to access a sizable consumer base, they have enhanced the quality of their products so as to attract more consumers. High advanced and quality products for different goods adequately meet the needs of the world consumer base.
Theodore Levitt extrapolates the idea of meeting consumer needs in his article the Market Myopia. In this article, Levitt argues that in the midst of a competitive market, companies have to have a proper identification of their business niche. According to Levitt, many businesses across the world have failed because of the failure to identify their niche. For instance, Levitt explains that the rail road market has faced operational hardships because managers in this sector have believed that they are in the railroad business and not the transport business (Levitt 139). In this way, they have not worked towards meeting the needs of the customers. The same cases also led to the failure of many industries such as Hollywood which viewed itself as being a movie business entity instead of a business entity.
- Application of article information to Ford Motors Company.
Levitt’s articles are applicable to the current business environment that surrounds the operations of the Ford Motors Company. As a result of globalization, the Ford Motors Company has been able to expand its operations in other territories outside the United States. The export of Ford vehicles to other parts of the world indicate that the consumer tastes of different consumers across the world is becoming homogenous. Many people in other countries are beginning to have the same needs as the American middle class.
One thing that is worth noting is that many nations across the world have liberalized their economies. This has allowed both economic growth by increasing the size of national wealth and economic development in terms to make sure that resources reach the grassroots. Liberalized economies across the world have allowed the sizes of the middle class in many countries to increase significantly. The need of many middle classes across the world is almost similar. This means that middle classes in nations in Asia and Africa can be able to afford the same goods that the middle classes in the United States can access. This has resulted in a situation whereby the demand of American goods such as American vehicles has grown. Therefore, as a result of globalization and market liberalization, Ford has been able to expand its consumer base to other nations and continents.
However, it is worth noting that Ford is not the only vehicle company that supplies vehicles to other nations. Many countries such as China and Japan are also global giants in terms of their production of vehicles. For Ford to remain relevant within the global market, the company has to improve the quality of its vehicles so as to compete with other vehicles that come from other nations. High quality Ford products can favorably compete against other companies because many consumers are interested in the quality of products that they purchase. One thing that is worth noting is that the improvement of the quality of products produced by the Ford Motor Company is dependent on technology. Therefore, Ford as a company has to invest in technology so as to produce goods that can favorably compete with other companies in the global market.
Ford as a company has over the years seen itself as a vehicle business. There is a need for the company to free itself from this ‘market myopia.’ Instead of the company only focusing in the production of vehicles, there is a need for the company to also engage in the manufacturing of other machinery that could enhance the ford trade mark. This would include the production of generators which would fetch a large market in many nations across the world. The diversity of ford products would allow the company to have a large market niche. This would allow the company to remain afloat despite receiving competition from different companies across the world that produces the same goods and services. Therefore, diversity and a clearer identification of its business niche would greatly boost the operations of the Ford Motors Company across the world.
Levitt, Theodore. "The Globalization of Markets." The McKinsey Quarterly. Web. 23 Feb. 2012.
Levitt, Theodore. "Market Myopia." Harvard Business Review. Web. 23 Feb. 2013. <. http://www.commerce.uct.ac.za/managementstudies/Courses/bus2010s/2007/Nicole%20Frey/Readings/Journal%20Articles/Classics/Marketing%20Myopia.pdf.>.