TECHNOLOGICAL CHANGES IN GLOBAL ECONOMY AND LOCATING A FIRM IN THE GLOBAL ECONOMY

PRESENTED TO: PRESENTED BY:SUNIL KAKKAR SIR VIPIN GOYAL

PGDM 1ST SEM.SEC-C

The impact of technological change

Tech change may involve new products, improvement or cost reductions for existing products or better ways of managing the operations of a business.

Electronic co. must be competitive in using the new digital technologies for their audio and video equipment. Automobiles manufacturers survive only if they keep cost down by using advanced robotics for assembly.

Requirement for successful innovation Innovation involves developing useful products. Diffusion is the process whereby new product become widely available

Often the key to successful product innovation can be marketing and the ability to provide service. Profitable process innovation involves secrecy and being able to exploit economies of scale

Innovation is more likely to be successful if the firm stays with in its core competencies

For ex. RC Cola was the first company to sell cola drinks in a can and also the first to introduce a diet cola, but Coca-Cola and Pepsi-Cola responded so quickly that the smaller firm never gained any significant advantage from it’s innovation.

Locating the Firm in a Global Economy: introduction Locating a business in right place is

important because the cost of moving output and people across space is significant.

For ex. The best site for a retail store generally is one that is in close proximity to a large no. of people who are the potential customer of the store.

Locating the firm in global economy Many large U.S. and foreign firms

now produce and sell a significant share of their output in other countries. This is accomplished by setting up subsidiaries in foreign countries, entering into joint ventures with producers in those countries, or by licensing foreign firms to produce and market their products.

Selecting an industrial location Primary location factor: Labor Energy resources Transportation Proximity to market for output Government regulation Raw material availability

Secondary location factor:

Physical environment State & local government attitude &

policy

Ranking industrial location determinants Percentage of Executives surveyed

location factors who rated these factors according to importance

Geographic location 64Availability of transportation 54Stable state govt. 38Skilled Labor availability 32Raw material availability 28Tax exemptions 27Unskilled labor availability 22Water supply 17Availability of rail transportation16{Source: M.L. Goldstein, “choosing the Right Site”,

Industry Week (Apr.16, 1985)}

IMPACT OF TECHNOLOGICAL CHANGE ON AUTOMOBILE SECTOR

Maruti Suzuki India ltd. Is a publicly listed

automaker in India. It is a leading four-wheeler automobile manufacturer in south Asia. Suzuki motor corporation of Japan holds a majority stake in the company.

Maruti Suzuki Plant in Gurgaon

Technological changes: Authorized service stations: Maruti insurance: Maruti finance: Maruti true value: N2N fleet management: Accessories: Maruti Driving School: Maruti Exports: Maruti suzuki has helped

india emerge as the fourth largest exporter of automobiles in asia

IMPACT OF TECHNOLOGICAL CHANGE ON AGRICULTURE Genetically modified crops Agricultural equipment. ( Harrow and cultivators) Cheaper solar energy Fertilizer(Urea and DAP) Tractor and other machineries.(15

hp- 45 hp) E- CHAUPAL

E-CHAUPAL ITC has originated the E-CHAUPAL for rural

marketing in 2000. It is started in villages of soya bean farmers in Madhya Pradesh. It’s services are:-

Relevant & Real-time Information Commodity prices, Local Weather News

Customized Knowledge Farm Management, Risk Management

Supply Chain for Farm Inputs Direct Marketing Channel for Farm

Produce Lower Transaction Costs, Better Value

through Traceability