2009: The Year of UnGlobalization

Watch out for the withdrawal by government from globalization. Pressed upon to protect their own backsides, governments will sell the value of buying local.

Globalization has gone the way of the .com meltdown. The notion that instant access to a mega-market of 6 billion people could justify huge investment based on global demand exploitation is the same notion that said “Market accessibility through the Internet can turn a million dollar business into a billion dollar business in 6 months or less." Phooey. Every chess piece on the board bulked up, in order to play on a bigger board, and capital markets fed frenziedly on the promise of an unlimited ceiling of wealth opportunity.

Well, the investor expectations of wealth accumulation through globalization have been shot down. The past 5 years of capital market growth has vanished in a puff of gunsmoke. The globalization of world markets is comparable to the onset of a world war. It is not a win-win scenario. There are casualties. The world is not an open market. Every nation has a card up its sleeve.

And the consequences of building an economic infrastructure out of a pack of playing cards are being felt today. Survival of the fittest is the best axiom that can be applied. Forget competitive values, customer loyalty, and better products: simply wait and see who has the fortitude to hold out the longest and stay in the game. Government bailouts will be wheedled, cost of borrowing will be further reduced, conversion of debt to equity, any trick to keep what is festering alive. Welcome to the world of unglobalization. Welcome to the world of 'my foxhole wherein I keep my head down and pray for the shelling to stop'.

Why is this relevant to my blog’s focus? Because, in the context of stakeholders, it has been proven that shareholders and wealth-holders have nudged consumers down an economic garden path into a global economic trench. Consumers are now habituated to purchase more disposable products from cheaper labour market economies in order to maintain their domestic equilibrium - in absence of which we have no comparable consumer options from which to restructure our domestic household budget. So retailers are offering discounts at ridiculous proportions to generate volume from a dwindling household budget. This is a cycle of ever-diminishing returns.

Dell has recently announced its globalization structure to 4 customer tiers: consumer, enterprise, public sector, and small/medium business. The rationale is that all customers within those tiers share common needs of technology, regardless of location. Dell has reached the point where price discounting is not going to improve its business performance. It needs to cut costs. Do we view this globalization statement as a customer-centric program or simply a determination to reduce costs by aggregating all customers worldwide into 4 buckets? It doesn’t add up to customer value.

When the expectations of conquest exceed the value of what is there to conquer, everyone that goes to war loses. That is the paradigm in which we sit.

Why does this matter to the customer-centric marketer? It is all about managing customer expectations. In the global market, governments, industry and speculators are the advertisers and the taxpayer/investor/bank account holder is the customer. Do we feel cheated? By George, we do.

There is in the aroma of Obama in the air, a scent of integrity and transparency. The ethos of "Buy Local" should be echoed in every country. Your tax-payers need to support the local economy otherwise every 40 cents on the dollar of a $43 billion bailout, will be bled out of the economy to foreign manufacturing and ownership. Globalization is a Risk Strategy, and until smarter people learn to play the game, we need to be afraid, very afraid.

Not that there isn't a heroic camaraderie that unites the occupants of a sinking ship. Especially when the occupants collectively agree to fill it with water. Just watch out for the one or two that have enough sense to jump off and swim for it, and see how the bonds break.