Drivers toward Globalization: The Case of Northrop Grumman

Our leadership is founded on talented employees effectively applying advanced technology and sound business management. Northrop Grumman employees lead through competence, creativity, and teamwork (Northrop Grumman, 2016). In addition, we strive to attract and retain the best employees by providing an inclusive work environment wherein employees are receptive to diverse ideas, perspectives, and talents to help solve our toughest customer challenges. Northrop Grumman develops and maintains some of the most technically advanced products, programs, and services in the world. For this reason, our continued success requires us to provide the education and development needed to help our people grow (Northrop Grumman, 2016).

Michael Porter wrote about five forces affecting the profitability and viability of companies. The five forces are existing competitors, new entries into the market, substitute products, bargaining power of customers, and the bargaining power of suppliers. (quickmba)

Porter has identified five (5) competitive forces that shape every industry and every market. The forces determine the intensity of competition and hence the profitability and attractiveness of an industry. Based on the information derived from this analysis, management can decide how to influence or to exploit particular characteristics of this industry.

It is inevitable if firms increase their global operations because every country has something different to offer, something new, and without the current innovation being promoted to the market, the company will start to lose its edge on

The five forces examines the dynamics within an industry. Understanding the competitive forces, and their underlying causes, reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition and profitability over time. Understanding the structure of its industry is also essential to effective strategic positioning.

As relevant to these competitive forces, the common and mutual goal of companies can be explained as better profitability with a greater market share against their rivals. Therefore, implementing Michael Porter’s Five Forces can help the companies determine the issues that may impact the company’s profitability in the long term.

Globalization, defined as “a process that aims to expand business operations on a worldwide level, and was precipitated by the facilitation of global communications due to technological advancements, and socioeconomic, political and environmental developments” has been around for ages. However, it is a force that is becoming increasing more relevant in today’s world. In layman’s terms, globalism is the merging or “melting” of individual perspectives and markets into a more global market. As of recently, society has been obsessed with studying globalization. However, the conversation is rarely economical. Globalization is typically looked at as a social or cultural force that is shaping and connecting the world. This is scene in clothing styles, human travel, and popular culture that has become increasingly similar across nations. That sentiment isn’t wrong-globalization does have a cultural side, but many people are missing the economic impacts that this new world is facing. In fact, the economic implications of globalization and how governments legislate to control them leads to significant opportunity, but also huge threat globally.

In the contemporary China’s economy, it is no doubt that Auto parts Industry has become one of the fastest growing industries which plays a major role in the development of the domestic manufacture as well as the GDP Growth.

Globalization brought upon many changes to the American Automotive Industry in 1975. Increasing demand for import automobiles and the Energy Policy and Conservation Act served to be a real threat to the Ford Motor Company, American Motors, Chrysler Corporation, and General Motors. Out of these four manufacturers Chrysler was affected the worst by the industrial change, as they required a federal aid and required brand /management changes to revive themselves. Globalization formed a more competitive market in the United States during the 1970’s due to the changing emissions standards. The American Automotive Industry had to adjust to the new emissions standards from the Clean Air Act of 1970, and the fuel economy requirements of the Energy Policy and Conservation Act, all while building cars that attracted to American consumers.

What driving forces do you see at work in this industry? Are they likely to impact the industry’s competitive structure favorably or unfavorably? (Did we answer this question?)

With globalization on the rise, many immigrants are migrating to America to follow the American dream; however, many xenophobes in America are against this. They promote hate crimes, therefore, the destruction of other races and religions that are not like their own. Recent rises in immigration to the United States has seemed to spark some hate crimes around the country; especially after the September 11th attacks occurring in 2001. Many people today still have a hard time accepting this movement. A lot of white Americans are not accustomed to other cultures, leading to very sheltered lives. Then, all of the sudden there seems to be this culture shock, and everyone is freaking out in their own ways, some more violent than others.

Increased globalization is the direction that all major multinational corporations are moving towards. Ford had made a good attempt at making a world car that proved to be partially successful in the beginning of sales. The company has learned that locational specialization is an extremely important aspect to selling globally because of the differing personal preferences and legal demands.

The forces of globalization are generally credited with the major role played in increasing the access of organizations to countless resources. Due to market liberalization for instance, large corporations are able to import cheap resources from various global regions and as such patronize the market through price leadership strategies. Nevertheless, another crucial characteristic of globalization is that it allows economic agents an incremental access to larger customer markets. This virtually means that manufacturers get to sell their products to numerous global regions and exponentially increase their revenues.

With the increase in globalization, there is more communication occurring between people not only of the same culture but of different cultures, making clear communication more difficult with regards to the syntax of different languages. These different cultures all have varied ways of teaching their people with regards to education, societal norms, and their culture as a whole. Cultures may be similar in one value while at the same time, they can be complete opposites in another. It is because of these differences, misunderstandings can occur and can lead to high tension within the workplace. Whether in written or verbal form, this is why you cannot just divulge your thoughts and expect the intent to be understood by the recipient.

Up to now the literature review has given an insight into the concept of globalization, and the understanding of several academics in the light of how this phenomenon developed over the years. It is then essential to cover what the economic benefits of globalization are, and how these may impact a sector or company. Most of the literature study’s that have been written on the economic benefits of globalization have been after 2006. The reason is because the studies used the globalization index which was created by Dreher (2006) then further developed by Dreher (2008) again. Many of the empirical studies used this index as indicator as a base to form their findings.