Abstract
Global markets endorse the principles of market-space competition, where competition space represents a factor of competition. Firms compete with one another in extensive markets, without geographical and administrative boundaries; they adopt highly flexible managerial directions, featuring the absolute predominance of intangible assets and aimed at exploiting global economies of scale, focused on dimension and relationship. Global markets redefine market-space competition and substantiate global managerial economics. The distinctive features of these are: asset management without physical or administrative limits; increasingly sophisticated products which are rapidly rendered obsolete because they are easily imitable at decreasing cost; competitive interrelations, developed between transnational networks, which go far beyond the multinational (or multidomestic). Globalisation changes corporate organisation and the role of strategic alliances, imposing collaborative network strategies on groups of firms with competitive relations; these then tend to form ‘closed’ relationships of cooperation to pursue a global vision in keeping with their huge corporate size.
Highlights
Globalisation gives rise to widespread production overcapacity, and to greater availability of supply than the absorption potential of the demand group
Over-supply has reached critical thresholds in numerous sectors and this feeds a consumer crisis spiral, which makes it increasingly difficult to motivate sales amongst demand groups that are sensitive to stimuli but not structurally loyal
In conditions of over-supply the consumer crisis spiral is often driven by inadequate price policies
Summary
Globalisation gives rise to widespread production overcapacity, and to greater availability of supply than the absorption potential of the demand group. Over-supply imposes new forms of competitive behaviour, without precedent in traditional management and marketing theory. The latter rose to success in completely different market conditions: initially, with demand greater than supply, production intensified (the shortage economy phase, up to the end of the 60’s); with supply and demand dynamically balanced, marketing triumphed (the welfare state economy phase, up to the end of the 80’s). In global and high competition markets, pricing requires a new, competition-driven logic (integrating cost and supply determination factors, ‘classical’ parameters of the 60’s and 70’s marketing manuals), based on digital technologies, which allow rapid price updates and continual results checking without time and space constraints (market-space management). This means that, for instance, we are witnessing a slow down in production delocalisation choices, as lower production costs represent a solution which is often not sufficient to deal with the production excesses being
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