Final answer:
An industry is globally defined by the international influence on its market share and interdependencies. Globalization and technology have expanded market competition beyond national borders, impacting business strategies and economic policies.
Step-by-step explanation:
An industry is considered global if a company's industry position or market share is affected by competitors across the world or if its operations are interdependent with its positions in other countries. The interconnectedness of global markets has become a significant factor due to the advent of globalization and technological advancements. This has created situations where businesses can no longer act in isolation but rather must compete within a global scope, where products and services can be sourced from anywhere, challenging traditional market boundaries.
Historically, companies like General Motors, Ford, and Chrysler once dominated the U.S. auto market. However, with globalization, they now compete with international firms like Toyota and Honda. The market concentration ratio, once measured within national borders, is now often considered within a global perspective, leading to a lower Herfindahl-Hirschman Index (HHI) in major industries when considered on a global scale, indicating less concentration.
With the rise of business-to-business websites and improved communication technologies, such as the internet, even local businesses have felt an increase in competition. This demonstrates that we now define markets not just nationally but globally, influencing business operations, competition, and economic policies. As a result, countries must navigate challenges such as environmental regulations, national security concerns, and economic dependencies within the international trade landscape.