Levitt’s opinion on globalization strategy
Introduction
In most countries and to most people, globalization as an economic, political, cultural, and technical force that has become fundamentally inevitable (Lagace, 2003). The faster information is moving across the globe and around people from all walks of life, the more they are becoming attentive to the different preferences, choices, and living standards available in their place of residence (Sirkeci, 2014). The spread of information has made people become world citizens at various rates and with the lowest currency indicators. However, the nature of globalization to bring people together has been seen as a threat to people’s identity, culture, and lifestyle. As unsurprising as that sound, globalization is causing opposition from powers with a goal to preserve change and deepen the identity at the local level (Sirkeci, 2014). Nevertheless, people gradually understand the world’s economy and tend to appreciate what it is offering. They buy BMW and Toyota, they invest in fancy electronics like Apple or IBM laptops, communicate with BlackBerry or Nokia phones, and wear Nike or Zara clothes. Drink sneakers, Coca-Cola, eat McDonald’s burgers, entertain Sony PlayStation kids, and travel with luggage for artists. This also applies to business buying patterns. The market characteristics for Hewlett-Packard Computers, IBM Global Services, Standard Electric Aircraft Engine (G.E.), or PricewaterhouseCoopers Consulting Services are not influenced by political or geographical conditions (Buzzell and Quelch, 1988). The value and features of a product or service determine its appeal and its position in competing for the market. This paper will discuss Levitt’s opinion on globalization strategy and critically evaluate it with consideration to relevant literature.
Levitt’s argument
Levitt’s argument was related to the fact that new technology “proletarized” communication, wear and travel, and new commercial realities. He also discussed global organizations versus multinationals, and nations learned a lot about their neighbors and other countries around the globe and adapted possible changes and features that would enhance economic development. In a critical analysis of his opinion, Acar (2011) found that Levitt suggested a strategy for companies to expand their companies and make them more of global companies than multinational as the market for multinational companies is declining at a significant rate. He found that more opportunities were available in the global market and expanded the chance for other countries to learn from others and embark on development. He also suggested making standardized products that are internationally relevant and never matching surface variations. In other words, standardized products require the global market in order to enhance the image of the products and their value. Another suggestion put across by Levitt was that the standardized products are available to everyone, and high quality and optimal low prices are maintained; this will meet all people’s needs across the world as products are distributed globally at an ideal price. This was the best deal for these people as they tend to choose more standardized products. He also wanted to have some standardized markets rather than many individual market segments. As a result, product customization is complete, and with some standardized market formulations, global companies retain significant value rather than going directly through customizable trading floor shapes. According to Levitt, the main strategy for globalization is to ensure there is no other element or appeal except the price. People are excited about money and want to distribute it to the best possible. Therefore, if the price of goods is low, affordable, and standardized, the capacity of people to spend money is heightened, and people will tend to keep buying things as far as the quality is standard and the price is affordable. Levitt stated that If companies lower costs and prices, lower quality and reliability, and maintain reasonable concerns about conformity, customers prefer standardized products around the world.
Now, Buzzell and Quelch (1988) emphasized Levitt’s opinion on marketing principles and stated that companies need to familiarize themselves with what they want, then they know themselves, or at least more than they can formulate. Successful global companies do not refuse to adapt or differentiate the demands of markets with changing product preferences, shopping preferences, cost structures, and legal or institutional structures. But globally, firms tend to be reluctant to accept these differences, adapting, steadily checking for invariance, trying to get over them, and changing them in various ways. Over the last two decades, worldwide strategies and organizations have been solid. On the one hand, these perspectives have deepened our understanding of the complexity of global struggle (Donnelly, Gibson, and Ivancevich, 1987). Diversity of perspectives, on the other hand, creates great uncertainty and confusion about global strategy decisions, why small and medium-sized businesses choose a global strategy, and how to stay competitive around the world in making this choice.
Without a single construct incorporating these different points of view, vagueness and misunderstanding will continue and lead to conflicting ideas and hopeless demands for information. Acar considered Levitt’s suggestion that the increased advancement in technology in communication and travel will increase the traveling rate across the globe and will homogenize global market segments (2011). He noted that consumers from various areas in the universe are increasingly tending to prefer the same products and have developed the same taste. To some extent, this has become an advantage in the economy; however, most companies are still struggling to establish economies of scale in the current global market. Thus, multinational companies that operate independently of each other’s markets are gone and are replaced by global companies that are able to offer standardized products equally and at the same cost around the world. To support Acar’s idea, Aragon and others (2017) observed that in the current era where customers have access to platforms that allow them to discuss and learn about each product’s weaknesses and prices, global companies have an advantage because they are able to maintain equal prices. In this regard, the two authors stated that in the current competitive global market, the only way a company will survive is if it maintains the production of high-quality products and distributes them at a fairly affordable price. Similarly, Warren (2017) noted that customers around the world forgo personal preferable choices products that are not inexpensive and are of high quality. In place for a single standardized product, people will go for a wide variety of products that give them the freedom to choose and decide. Furthermore, many product options will enhance the sharing of investment in technology and distribution channels. Mutual subsidization of goods and the market’s characteristics are a critical aspect in the globalization.
Donnelly, Gibson, and Ivancevich (1987) observed that if an international company offers low costs internationally, sponsorship increases exponentially. The company is able to reach consumers in distant markets, especially in the geographically remote areas, and is able to attract people who were previously traditionalists when it comes to product preferences. Similarly, Gendron (1989) noted that companies are able to compete with the local products by offering high quality than available in the local products at a low cost. Standardization strategy is an aggressive move that expands the markets and enhances homogenized markets around the globe.
Levitt (1983) emphasized that the ideal strategy for globalization was to create a standardized product and offer to the consumer through a standardized system. A significant percentage of the scholars have concluded that globalization for the sake of providing standardized products at a low price is “unimaginable,” especially in the era where “multinational companies” was gaining momentum. These then differences have been overcome by enabling global organizations to promote standardized products of high quality at lower prices than their competitors’ Production scale distribution, marketing and management homogenized perspective that “global companies are caused by a new century.” Some time ago, globalization was not known in the international business and only got introduced as a new paradigm but only as a branding strategy. Currently, people no longer feel the relevance of global organizations that focus on them in the Consumer Mass Marketing Communication Program with standardized products (Schiffman & Kanuk, 2009, p. 471). No thanks to intensive decision making, most companies have stopped mentioning new global markets and ignored their adoption. The idea of a globalized market has its pros and cons, while technology and communications With the development of people, people are always looking for high quality / low-cost products (Levitt, 1983).
Support and Critics of Levitt’s argument
() noted that although Levitt praised globalization, he also underestimated and overestimated it. according to his arguments, he did not expect some market to respond to globalization or be against it, especially the traditional Western globalization. () observed that Levitt underestimated the power that globalization has to transform the countries and to actually accept the components of global capitalism, as it happened in the former Soviet Union, China, and other countries around the globe. But he was right about the value of branding and its role in connecting consumers globally, for example, McDonald’s, Coca-Cola, Yahoo, Starbucks, etc. Global products form a significant aspect in global marketing strategy, and if it can be sold in different markets with minimal or little adaptation or need for one, it can be described as global. a business should be focused on providing global markets with global products. Global products should not be sold in all markets. For some products, the United States, Europe, and Japan represent 70% (or 90%) of global demand. In this current homogenous triad, companies will be able to benefit greatly from the universally accepted product designs. Global Products significantly benefit designers and buyers. The benefit for the manufacturer has reduced costs and costs in development and management. Consumers benefit from low prices, excellent service, consistent reliability, and high-quality products. However, not all products can become global. According to studies, the capacity of a product to be global is lying on the importance and necessity of the product and also the availability of alternatives (Gendron, 1989). Globalization, which to most people, refers to the expansion of investment and trade, evolved in the 1990s and 21st century, coupled with the expansion of global business and the integration of the world’s economy. Globalizing your business is easy to determine as it spreads many products and services across the globe, for instance, some products like Japanese cars are common in many parts and have been easily adapted to present lifestyle and class. Additionally, companies are becoming multinationals whose administration and management are run in one country but run a business in another one. in consideration, Japanese mainly Honda automakers have a large manufacturing plant in the United States; on the other hand, Coca-Cola built in the United States operates plants in many countries, including Belgium and France. More than 80% of the sales of such companies come from overseas markets. However, according to (), the rapid economic development and success of Taiwan and Asian tigers in the beginning years of the 1990s and the financial failure of these countries in the late 1990s undermined the immediate expansion of globalization considered successful. A series of rallying on globalization attempts to show that globalization is not the source of the current global issues. Demonstrations in all aspects through the World Trade Corporation meeting in Seattle have been a great failure, but serve as an example. Therefore, globalization is its agent and multinational companies change their strategies for internationalizing their business
. Multinational corporations (MNEs) are key players in globalization as they contribute to the growth of financial interdependence among domestic markets. Don't use plagiarised sources.Get your custom essay just from $11/page
Donnelly, Gibson, and Ivancevich (1987) noted that with the current push for globalization, Corporations might require to create an immediate foreign opportunity (FDI) that can regulate a company or property far away. According to the authors, more than 500 multinational companies account for approximately 90% of the assets invested directly around the world and also account for 50% of the world trade. Additionally, a company can decide to create a portfolio company by acquiring shares in a distant company to gain control of the companyCompany by participating in international markets by using licenses or franchises. Contrary, Lagace (2003) noted that a company could enter the global market through strategically planned alliances with corporations in other countries.
Levitt stated that there are many types of suitable unions, but some companies can also sell their products by giving each companyCompany access to other domestic markets and contacting renowned coordinating companies. This international business approach also allows companies to curb the problems related to the internationalization of companies such as unusual social conditions, political tension and activities, and regulatory requirements. Siminoff (2017) noted that domestic companies ought to engage with multinational companies in order to help them get used to and overcome these problems. According to Kotler and Keller (2009), the distinction between globalization and internationalization is essential, and every board of directors should be aware of it. According to Levitt, globalization differs from internationalization in that it is more than the increase in the size of the market and economic exchange across many borders; it determines the character of the people involved in the trade.
As observed, Levitt’s main argument was based on the development of communication technology that enhances the development and embracement of modernity in societies. To Levitt, communication technology meant people would be more united and will have common goals in elevating their lifestyles and quality of life. This supported the argument that preferences do not remain constant but are reshaped depending on the consumers’ exposure. According to Levitt, globalization, therefore, meant trade across many nations but in the absence of boundaries, unlike internationalization which implied economic activity across the borders of various states which are left on the hand of politicians who can implement changes any time. In this essence, global markets can only be implemented in a globalized economy, whereas multinational companies can only be successful in an internationalized economy. Levitt emphasized that multinational corporations and global companies are not the same things. While products provided by multinational corporations are customized for particular national markets, global corporations offer goods that fit in all markets. Multinational enterprises (MNEs) typically function within their own triad region or compete in at most only two triads: the European Union, NAFTA, and Asia. In Europe, the United States and Asia, It’s a top-level area of interest from the point of view, claiming that the world is obviously increasingly single and homogeneous, but in fact, all parts of their argument are not one language, one Instead of one thirst, one food, one car, etc., each part of the triad has a strong regional difference. Others argue that they need to be customized, for example, American fast food companies like KFC and McDonald’s Ehnika option parts and nations such as Japan, China, the Middle East, etc. KFC releases foods according to Japanese tastes and places restaurants in crowded places, leaving little independent space. As a result of these changes, fast food restaurants have increased demand in Japan, as explained in the 2008 proposal. In addition, McDonald’s has carefully combined global standardization and local versions, usually in most countries, with a menu that maintains internationally standardized products while McVeggie Burger in India, McArabia in Kofta in Saudi Arabia, Increasingly locally produced products, including Israeli Kosher dishes, Big Mac and French fries. The automotive industry, such as Toyota, is changing its products in different regions. Products in the U.S. market differ from those in other countries. In fact, the best result is the result of a strong regional strategy, which is a bridge between neighbors and global initiatives and can significantly improve the company’s results as mentioned earlier, many companies view districts as a contributing factor to cross-border integration, as high levels of cross-border integration usually involve high fewer levels of localization. In addition to proximity, ethnic, administrative, and financial proximity are also important competitive advantages in localization, adding significant weight to sales. Adopting a regional strategy requires flexibility and creativity. Managers need to remember that markets, materials, investors, places, lovers, and competitors are everywhere. Successful businesses can take advantage of opportunities and prepare for failure wherever they are. Successful managers in this environment need to understand the similarities and differences between borders to take advantage of opportunities and offers with potential weaknesses. Once this analysis is complete, managers need to establish tactical goals. This is a key goal to be achieved through certain pursuits, such as considering the above five local strategic models and entering new regional markets. An international strategy is a strategy that determines the competition of each country or region individually, while a global strategy defines a solution to the problem of competition as part of an integrated and natural approach across countries and regions (Jorgenson, 2015). Thus, while many countries’ international strategies aim to meet the needs of customers in different countries or regions, global strategies seek to standardize products and marketing to work across national borders.
More than two decades after Levitt’s essay, Thomas Friedman had the same idea about globalization as Levitt but focused on production other than market globalization. Unlike Levitt, who only considered the purpose of communication technology on the market, Friedman stated that some events like the emergence of the internet were influential in standardizing the competition ground by reducing the power of states and localization and enhancing globalization. Friedman has a list of “flatteners” of the competitive landscape such as Berlin wall, the circumstances around Netscape, and dot-com boom that led to the investment of trillion dollars in fiber optic cable, and the emergence of platforms to share source code and software which has enhanced collaboration across the globe. According to Friedman, globalization was not only enabled by communication technology as Levitt has insisted but was influenced by the convergence of the flatteners around the beginning of the 21st century which has led to a web-enabled world that enhances sharing of knowledge in regard to geography, distance, language, etc. (Friedman, 2007 p. 50). He observed that it is after this phenomenon that major economic giants emerged in the former Soviet Union, China, and India. More than 40% of the world population who were out of the game got a chance to be participants (p. 205).
Professor Pankaj Ghemawat of Harvard Business School took a different perspective towards globalization and argued against full homogenization, globalization, and integration (2007). He did not agree with Levitt on culture and, on the contrary, argued that the differences between various societies and countries were too many such that full globalization is impossible (Ghemawat, 2007). He stated that currently, the world is semiglobalized and that it is like to remain like that in the foreseeable future. In support of his statement, he noted that most web traffic, phone calls, and investment are local; he stated that more than 90% of the investments around the globe are domestic. Unlike Levitt, Ghemawat noted that as trade continues to grow and economic development rises across the globe, the ration of international trade to domestic has and will always be substantial. According to him, it is necessary to know that distance and borders are still influential factors in trade, and their potential should be considered. According to Ghemawat, managers should focus on how distance and borders are affecting particular industries and take the obstacles as an opportunity for value creation (Ghemawat, 2007).
Moore and Rugman also rejected the idea of a global market and instead offered a regional option (2005). They observed that although companies source information and resources from across the globe, businesses tend to be concentrated in particular regions and cities, and hence they suggested that analysts should focus more on regions other than global opportunities in assessing strategy and organization (37). The history of Wal-Mart, Coca-Cola, and Toyota provided the basis for semiglobalization. The authors noted that Toyota is a good example of regional flavoring firms. The Company did not start with a mission to be the main distributor of auto parts across the globe, but rather, it predicted trade agreements in Europe, America, and Asia and expanded the business within the regions and not across. Moore and Rugman noted stated that in a semiglobalized world, barriers and borders between the states cannot be ignored. To support their point, the authors referred to the history of Coca-Cola who’s CEO, Roberto Goizueta, embraced and fully implemented Levitt’s statement that globalization of markets had imminence that production lacked. He implemented policies that involved focusing most of the company’sCompany’s promotion resources on Coke’s main brands, product standardization, and dissolution of boundaries with international corporations (38). The new management that later took the company has significantly changed its marketing strategy such that it is not the same across the world. In some countries like India and China, Coke is using the lowering of prices and cost by localizing and modernizing input and bottling and also upgrades of distribution processes to promote the product to the consumers, especially the ones in the rural areas. The company’s administration now recognizes that the company faces different challenges in various countries other than the ones in the United States (42).
The emergence of globalization was widely embraced and seemed to be inevitable; Levitt’s forecast introduced a commercial reality where most countries were not yet ready for the explosion of global markets and the existence of standardized goods that took over the market (Hanks, Just & Wansink, 2012 p.118). According to Levitt’s account, the regional, local, and national preferences would disappear in the current consumption patterns and hence will lead to homogenization of products in the market. Levitt suggested that the main features of globalization of markets are universality of tastes, product standardization, and marketing designs together with trade. On the contrary, Deichert and others (2006) stated that the adoption of Levitt’s global strategy would appear naive, as such approaches would lead to undesirable outcomes (10). He recommended that the universal strategy should not entail the standardization of products. Most of the critics of globalization side with Douglas and Wind and tend to base their arguments on the fact that there are locally established tastes to individuals and also society, which requires decision making. Arnold (2004) stated that markets are not influenced by taste convergence o the consumers, as Levitt had suggested (95). According to him, the phenomenon happens at the retail level and in the advertisement. Although Arnold contradicted Levitt’s view of marketing strategy, he agreed with him on the effect of the presence of global companies and brands on consumer’s orientation of preference and taste.
The perspective used to oppose Levitt’s strategy has led to emerges various paradigms, one of them being the “Think Globally, Act Locally” model. The model seeks to find balance between arguments from both sides; Coca-Cola’s Douglas Daft (2000) recognized that the next major evolution of ‘ going globally ‘ now needs to be ‘ going locally ‘ in response to the growing demand for ‘ great flexibility, response, and local sensitivity, while companies have been gradually centralizing our policy-making and standardizing our practices. However, as The Telegraph (2015) said that it would be against the flow of brands. However, the global success of a brand does not just happen. It requires the application of media technology and the internet to break down the tedious process of reaching customers. According to Kapferer (2000), for a brand to become global and be recognized in the international markets, there is a need to develop a plan and ensure it is executed effectively and efficiently evaluated in the promotion of the product. According to him, a brand is not just a name but also a form of identification for the customers and assurance of quality, promotion, and preservation of his or her image and that of others, identification of class, and link to certain behaviors in the community. Companies take a brand to represent the internal and external image and as a symbol of certain company based values. According to The Telegraph (2015), brands are influenced by the originality of the company as the national identity of a company is linked to its image, consumer’s association, and credibility.
According to Sirkeci (2014), globalization, as phrased by Levitt, was meant to be a quantity term but a quality one used to identify the market and trade according to the current transformative characteristics. They noted that this fact is what is missing in the debates about globalization and in the economist’s account of the same. They noted that in Levitt’s point of view, one could not solve any issue concerning globalization by view world trade date in terms of percentages of global product, distribution of capital flows, rations on the countries with the highest number of imports and exports, or in terms of prices of global product across the globe.
Relevance in the current world
With the current moves towards globalization, in some situations like Brexit that require people to look at the past attentively, it is clear that nations are still trying to hold to their culture and sense of identity before they lose it all (Giles, 2017). In the last five years, there have been moves in various nations to establish policies that put the local people and tradition first. Such policies are America first, Japan-first, Kiwis-first, Filipino-first, and so forth. Another example is Trump’s wall, which is meant to underline the border of the country physically. This implies that nations are trying to protect local resources, businesses, rights, interests, and communities. Levitt’s global strategy is fading away, and as many scholars have suggested, their global market resulted from the past political decision and can, therefore, be reestablished in the future through the political forum.
Holt, Quelch, and Taylor (2004) noted that the corporations that have believed and followed Levitt’s assumptions that consumer’s preferences are constantly changing and will converge to a common taste failed to overpower local products and have their collapsed or suffered a great loss. For instance, Wal-mart was a major company in the U.S., but its approach to every-day-low-prices did not yield any success in Germany because it overlooked significant cultural differences (Fernies et al., 2006). Another example is the terrible failure of Facebook in Japan as it failed to appeal to a major aspect of Japanese concerns about self-disclosure and privacy.
According to Levitt, companies could know the preferences of the customer if they asked them rather than observe their behaviors. Silverthorne (2003) stated that currently, companies do not rely on observation but on market consultation films and consumer behavioral analysis in planning their global market. Consultation has now become a main aspect of the market, especially to startups and new players in the sector. However, there are companies as if Apple and Kodak who trust their intuition of consumer’s taste during improve the quality of their products.
Holt, Quelch, and Taylor (2004) noted another inapplicable aspect of Levitt’s global strategy is the globalization by placing the company in all parts of the world. According to Johnson and others (2012 p. 491), globalization in the supply side exists; however, there is no assurance that there will be demand-side globalization. A company cannot expect to develop from just positioning its facilities in all markets without paying attention to consumer’s preferences. For instance, Polaroid entered the French market using the same standardized product strategy and advertisement gimmicks it had used in America, which led to one of the main commercial losses in the company’sCompany’s history.
Among the main points that Levitt noted is the importance of communication is constantly reshaping the global market and the importance of managers to understand the differences between internationalization and globalization, especially while offering products to the market. However, these views have been met with major opposition and confusion from Levitt’s bedfellows because the concepts are not familiar to some business and economic scholars. His views have become a major paradigm, especially in the world’s economic politics. Political scientists have become more aware of globalization than many mangers in business today. The scientists and politicians have developed an insight called ‘endogeneity of preferences’ used to give a better elaboration of Levitt’s claims. The insight suggests that people are likely to change their minds on the products they prefer if they continue to interact with each other socially. According to Siminoff (2017), economic globalization can be said to be transformative and convergent, while economic internationalization is additive and divergent. To politicians, globalization means increased economic interaction among societies, while internationalization implies the need to reduce national restriction in order to attract more business in the country. Levitt’s argument implied that globalization as a marketing strategy creates uniformity in the market, unlike internationalization, which refers to the availability of different varieties of products in the market (Sirkeci, 2014).
Currently, businesses ought to revisit their operation policies and redefine their business as either international all global by using the current conceptual lenses (Holt, Quelch, and Taylor, 2004). The real question is not whether it is right or wrong for businesses to adopt globalization but whether the strategy is useful or not in developing a better understanding of the world, as a marketing strategy, or production strategy. According to Levitt’s arguments, whether a business is globalized or internationalized is not determined by market sites. However, according to Lagace (2003), in the current era, Levitts’s argument might not be useful to managers who are trying to understand the capacity of their business in the world’s economy. He suggested that managers should quit trying to understand internationalization and globalization if they are yet to understand regionalization. Regional integration involves enhancing trade in a certain region and only to members in that area, diverting it from the outsiders. Organizations like the Association of Southeast Asian Nations, European Union, the North Atlantic Treaty Organization, and MERCOSUR have influenced global markets in a way that no globalization analyst or scholar, not even Levitt, can explain. In addition to that confusion, the world’s regionalisms have proved to be very different from Levitt’s globalization idea. Each regionalism has its own territory and operates using its own logic and plans. A regionalism has its own dominant countries, economic visions, and political ties (Holt, Quelch, and Taylor, 2004). Various scholars have noted that managers have to consider the differences between regionalism say between European economic integration process taking German as the center and by use of formal rules and Asian economic integration process assuming Japan is the center and by use of social networks and informal business (Johnson et al., 2012 p 501). in this essence, regional strategy might become the ultimate solution that many firms will go for in the future rather than Levitt’s global strategy.
According to Jorgenson (2015), the concepts of internationalization, globalization, and regionalization are not just concepts, and they are facts that need the application of the decision-making process. According to the author, Levitt’s globalization analysis is not enough to give managers enough insight of the markets or impact any skills on them on how to defeat their competitors. Kotler and Keller made the same point when commenting on Levitt’s global strategy (2009, p. 467). According to them, managers often look at the question of globalization as a ‘yes’ or ‘No’ issue, choosing between establishing and maintaining local control or going for standardization and reaching the whole globe. Their suggestion was that a global approach is not fixed and can fall under any spectrum of globalization from mere agreement on a product to global coordination. They agreed with Levitt that if a globalization approach is efficient, the outcome is astonishing. However, according to the authors, although global strategies will work, the frequency of success will not be as high as Levitt had predicted.
Levitt had the assumption that the process of globalization that he had discerned so quickly would continue like that till the end. However, although the social and political constraints in the different societies are not major enemies of globalization, they might hinder it from reaching climax. However, to some extent, he also failed to see its full potential. He talked about nationalism as if it is the biggest obstacle for globalization and deem.
Conclusion
Levitt’s arguments on globalization consisted of four points. Firsts, he suggested that consumers tend to prefer standardized products, especially if they are of high quality. Levitt suggested that companies can be able to achieve high-quality products at a low price; the low cost will increase the demand for the product and encourage a homogenized market. However, most scholars have criticized this idea and stated that providing standardized products to consumers is hindered by the availability of local and familiar substitutes. Other scholars have criticized Levitt for his disregard of local barriers and competition. As observed, some companies have suffered greatly due to assuming the standardization is as easy to achieve as Levitt had suggested.
Levitt stated that technological development enhanced globalization as it made the consumer develop certain economic realities that influence their spending power and demand preference. However, this strategy has been found to cause great commercial failure to companies who go head-on without considering other aspects like culture and traditional tastes of the consumers (Schiffman & Kanuk, 2009 p. 471). Furthermore, Levitt suggested that consumers tend to consider quality more than the prices of the product. Although the strategy has been found to be useful in the case of Red Bull, there is not yet enough evidence to support the hypothesis (Siminoff, 2017). However, most of the critics agreed that managers should be able to define their company as internationalized or globalized, while others added the option of regionalized companies. It was stated that the main difference between globalized and internationalized companies is the capacity for interference from local barriers and boundaries. Accordingly, Levitt’s strategy involved transforming multinational corporations and internationalized companies to take advantage of the global market. However, he failed to give a precise direction on how each company should implement the approach. Most scholars agree that Levitt underestimated and overestimated globalization. The idea was excellent; however, its main weakness is the disregard of cultural differences between various societies. Although the preferences of the consumers are converging around the globe, people are not yet ready to give up their identity and culture. Some may argue that in the current global society, people are becoming more proud of their diversity and prefer to showcasing and sharing with other societies to getting assimilated by the majority. A mistake that Levitt made was failing to consider the existence of influential events in the future or the possibility that the strategy might get outdated. A supporter of regionalization states that the emergence of some organizations like the European Union hindered full globalization. The global strategy that Levitt predicted gave people hope and led to economic expansion; however, the full globalization suggested is not achievable.
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