Social media, airplanes, machinery and smartphones — just to name a few. Technology has taken over our daily lives. An estimated 1.75 billion people in the world use smartphones. That’s a staggering 83% of the world’s population and it is still expected to grow by 2015. Truly technology has monopolized every single one of us and global corporations are capitalizing on this, making multinational corporations a thing of the past. It has already come to a point where global corporations such as Apple, Coca-Cola and Revlon opted to offer homogenized products instead of market-sensitive products. Corporations are now shying away from the core teachings of the marketing principles where the customers are the ones dictating what the corporations will sell in the market. People are openly accepting this fact by letting them sell the same way everywhere. In this essay, i seek to delve in to the effect of technology to globalization as well as its effect on the people and its competitors.
Daniel J. Boorstin, author of the monumental trilogy The Americans described our age as driven by “The Republic of Technology [whose] supreme law …is convergence, the tendency for everything to become more like anything else”. The rapid improvement in technology throughout the years has immensely contributed to the growth and development of corporations making them go global. By capitalizing on the benefits of the enormous economies of scale in production, distribution, management and the like by channeling these benefits gained into reduced global prices for their brands, they can easily decimate their competitors Because of this improvements in technology, markets are now pushed towards global commonality, corporations selling homogenous or standardized products.
“Everywhere everything gets more and more like everything else as the world’s preference structure is relentlessly homogenized”. -Theodore Levitt, The Globalization of Markets, Harvard Business Review. Take Apple for example, Apple is a highly homogenized product. It is the same across every country and yet it is welcomed by everyone. Other products such as Pepsi and other cigarette brands both sell well even though they undergo through various cultural barriers, such as religion, race, geography etc. This illustrates a growing trend on how people become generally homogenous.
Multinational corporations are now gradually losing its grip in the market because of globalization. Multinational corporations operate around the world but only in selected areas or countries plus the products they sell are generally culture or market sensitive wherein the products are centered on the markets needs and desires. The downside of this on the other hand is that multinational corporations operate at a relatively high-cost making their product a tad more expensive compared to global brands. An example of which is McDonalds and Jolibee, they offer almost the same products, cater the same market yet their prices are relatively the same considering McDonalds is a global corporation while Jolibee just recently became a multinational corporation. Why is that? Because McDonalds operates at a low-relative cost due to large economies of scale compared to Jolibee.
The improvement of technology really brought us into a new chapter in the 21st century. It paved way to corporations to take action and take advantage to go global which irrevocably made the world’s needs and desire homogenous along with the products they are offering. it also took its toll on multinational corporations, causing them to become obsolete and eventually trickle down into non-existence in the near future. What will happen in the future? We can’t possibly say, but one thing is true as stated by the iconic Theodore Levitt “A powerful force drives the world toward a converging commonality and that force is technology.”
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CJ 