1) Introduction
Globalisation of Production
Many production activities are becoming global. Globalization of production refers to the dispersal of production to locations that help a company achieve its cost-minimization or quality-maximization objectives for a good or service. This includes the sourcing of key production inputs (such as raw materials or products for assembly) as well as the international outsourcing of services. Example; India has nurtured a strong IT capacity, and has attracted global companies outsourcing IT and related services. India’s economic development has most often been compared with that of China, where export-oriented manufacturing industries have flourished, mostly in mass-produced goods, from textiles to standardized consumer electrical goods. Both countries offer location-specific advantages: China offers abundant cheap labour, and India, skilled labour for knowledge-intensive industries. However, each is looking to diversify, as India is broadening its policies to attract manufacturing FDI, and China is seeking to move up the value chain, to more high-tech activities. As the world’s two most populous countries, each with populations of over a billion, they are also, potentially, the world’s largest markets. Not surprisingly, therefore, many companies eye the market potential they offer, in addition to their location- specific advantages in production.

Globalisation of Market
Globalization of markets refers to convergence in buyer preferences in markets around the world. This trend is occurring in many product categories, including consumer goods, industrial products, and business services. Clothing retailer L.L. Bean (www.llbean.com), shoe producer Nike (www.nike.com), and electronics maker Sony (www.sony.com) are just a few companies that sell global products- products marketed in all countries essentially without any changes. For example, Apple’s iPad qualifies as a global product because of its highly standardized features and the company’s global marketing strategy and global brand. Global products and global competition characterize many industries and markets, including semiconductors (Intel, Philips), aircraft (Airbus, Boeing), construction equipment (Caterpillar, Mitsubishi), autos (Honda, Volkswagen), financial services (Citicorp, HSBC), air travel (Lufthansa, Singapore Airlines), accounting services (Ernst & Young, KPMG), consumer goods (Procter & Gamble, Unilever), and fast food (KFC, McDonald’s). The globalization of markets is important to international business because of the benefits it offers companies.

4) References http://catalogue.pearsoned.co.uk/assets/hip/gb/hip_gb_pearsonhighered/samplechapter/0273752634.pdf http://www.palgrave.com/business/morrisonib/pdfs/sample.pdf