Global Strategy vs. Multicountry Strategy

So for such move they should follow an international strategy where it applicable to all markets. Firms can gain various benefits from international strategies such as increased market size, greater returns on

According to Theodore Levitt there are three assumptions that favor the pursuit of “pure” global strategy. The first one is that customers worldwide are starting to all want the same things. If this were true, I’d be able to buy the same things that I can buy in the United States in

In our day and age, the next step for every company is “to go global”.

The globalized business environment has determined companies to develop complex strategies intended to address the challenges determined by these factors. The increased competition in most business fields requires that companies develop flexible strategies that are able to address the changing conditions of the environment. The same situation applies to the telecommunication industry.

* Having the correct strategy and appropriate resources means the company is able to execute an international expansion.

Once a firm determines its corporate level strategy, it must decide on its business level strategy. An international firm must decide on only what business level strategy it wants in one market but also whether it wants to have the same business level strategy for each country in which it competes or whether to give its managers in other countries the responsibility for creating their own business strategies.

The purpose of this is to pressure strengths and defect weaknesses of the organizations’. The global strategic planning process also defines the company’s business and mission/vision. This helps portray the company’s image to the stakeholders and define what the company does. Furthermore, corporate objectives must be in the scope of the GSP process and the objectives give a path, boundaries, and ensure prosperity. Objectives are very important to a company and should be amplified, as much as possible. Another part of the process is to set up goals and or competitive strategies. The goals help to achieve strategies within multi-domestic, global, and transnational. These three strategies come from the two conflicting problems in international market of reduction cost and adaption to local markets. (Multi-domestic: decision making for quick change, increase cost structure, cost of and difficulty of coordination becomes substantial) (Global: value chain activities, limited ability to adjust to meet customer’s needs, and transportation cost.) (Transnational: analyze pressures of cost effectiveness and adaptations, locations that are the best for each company activity, decisions are complex when trying to attain the optimal

Companies can pursue essentially the same strategy worldwide or craft slightly or very different strategies for the Europe-Africa, Asia-Pacific, Latin America, and North America markets.

Moreover, Yip, Loewe, & Yoshino (1988) caution that before managers embark on globalizing all or part of their business they first need to determine if the business can or should be globalized. Factors within the companies industry such as economic, environmental, competitive, and market forces must be analyzed. For example, market forces determine if customers will be receptive to a company’s product; economic forces determine the profitability of the product; managers must be aware of the implications associated with environmental requirements such as taxes,

In the business industry, if businesses want to export their goods and services to other countries, they must become familiar with and adopt international and global strategies. Consequently, there are three types of international and global business strategies. The first type is international, which entails conducting a significant amount of activities outside the home country, yet its focus remains on the home market (Fung, 2014). The second type is multinational, which consists of operating in multiple countries, yet the headquarters is in its home country, not to mention that the competitive advantage will vary by country (Fung, 2014). The third and final type is global, which is when the organization treats the whole world as one market and one source of supply, not to mention, that its competitive advantage is contingent of common brands, standardized products, and global scale production (Fung,

Recently many myths and misunderstandings surround what is really meant by “global strategy”, which caused many companies to fail.

The world offers significant business opportunities for every company, however, opportunities are accompanied by significant challenges for managers. Managing global operations across diverse cultures and markets represents a big challenge and opportunity for companies. To compete in the global market and be successful, companies must learn the strategies, policies, norms and technology necessary to conduct international business. The opportunities for global expansion are numerous, and attaining success is a matter of developing the right strategy to win local markets and its consumers.

Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.

As trade increases hyper-competition grows forcing organizations to go global. By a company going global it requires them to rethink strategy and reform (Ananthram and Pearson, 2008). Global organizational structure is the way a company aims to merge local preferences with global strategy. The definition of global strategy is “strategic choices that have the characteristics of being globally uniform or integrated,” (Yip et al., 1997) such as standardization of products, uniform marketing, and competitive moves, but all globally (Townsend et al., 2004; Zou and Cavusgil, 2002; Bayraktar and Ndubisi, 2014). Global strategic strategy is a way to adjust to globalization. Globalization is “the economic and social process by which economies and communities grow inextricably interdependent “(Jhirad et al., 2009). The recent financial crisis (Das, 2010), large amount of poverty, and climate change are all problems that show how the world is globally connected because all countries impact each other (Jhirad et al., 2009).

He goes on to imply that business must make global strategies that would involve making investments in as much countries as possible. Rajdeep, Murali & Robert (2008) agrees with Tallman, as he extends his view that these strategies must become more flexible and effective to comply with needs of the changing environment.