Global Strategy
Companies who use global strategy will view the world as single entity as they develops, produces, and sells the products; it is not a collection of national markets which means that companies will make some changes in their marketing strategy as to reach the consumer markets all around the world. The primary goal of global strategy is that deliver the needs of customers in worldwide with standardized goods and services which also mean that this strategy will help the companies to find new markets of products or services from the worldwide by reach new consumers overseas, and go into markets with little competition.
This strategy also has its pros and cons. The first advantage is the companies’ sales will increase because the
…show more content…
Companies who use global strategy need to speed a lot of money to create additional personnel and the technology to manage and oversee the market. Companies always need to be ready when there have necessary changes in form of logo redesign, translation services, and advertising or public relations costs because this will let the companies spend a lot of money. Next, management will be in crisis if the companies did not monitor well as the business became globalization. Companies need to overlook the activities because the political or societal will change. Moreover, natural disasters also will influence the supply chain of the …show more content…
For example, companies who develop their business in United States want to produce a produce in a low cost is impractical, the manager can find another countries that can produce the produce in lower cost and export it to United States. However, when the companies have products that cannot sell in United States, the company can sell to other countries. Furthermore, if the companies operate in transnational basis, they can take the advantage to choose the lower cost of labor. Companies can utilize the resources from overseas subsidiary to produce a cheapest products, this can let the companies save a lot of production cost and can make the products’ pricing become more competitive
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
Globalization is one of the crucial factors that have impacted the business. Without the proper utilization of the effects of the globalization, it is very difficult for a company to get the competitive advantage. There are many factors that need to be considered before rolling out the product in the global market. The first is to analyze the value chain of the company and to understand and decide on the position where they management wants the company to be into. Then comes the licensing,
The first recommendation for this firm is to adopt a global policy and try and explore new markets so that market growth and market share can be expanded. In case of a firm entering an international market, it requires to analyze the nature of the market and suitably form its marketing strategies in alignment with its business strategy and decide whether it is more beneficial to adopt a global approach or use a strategy that is customized to suit the needs of the local customers.
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 most successful firms have invested in playing a major role in Social media and the internet to ensure that consumers and other businesses about the product or services. The website as well as Social media allow potential and current consumers aware of the any and all information about the product and the cost. The advent of Social media allows the consumers to share options of the product and receive feedback from the company media specialist. In the current marketplace the market is no longer just the business around the corner today the company might be overseas. The operating characteristics of the firm today might include being internationalized since the marketplace has grown over the years with the internet. International strategy is a global plan specific to a company or conglomerate where a model for global expansion and commerce is the ultimate goal. International strategy usually refers to actions that occur across multinational corporations in the private sector.
The business activity of companies in most industries is affected by the process of globalization. The need of globalization was determined by the necessities of companies that had to address markets in other countries in order to expand their business. In addition to this, they had to reduce their costs by hiring employees from other countries, and by outsourcing some of their processes to other regions.
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
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,
WikiMart is a Russian online marketplace operating for Russia and Russian speaking countries. Two Stanford MBA students founded the startup company was founded in 2008, their by two Stanford MBA students with the strategy to reach the young and technologically savvy and young consumers in Russian speaking countries. Twith the founders’ goal of dominating in Russia and other countries of the former Soviet Union is well on its way as WikiMart . that has evolved into a large competitor in the e-commerce industry for that part of the world. The startup company was founded in 2008 by two Stanford MBA students with the strategy to reach the technological and young consumers with the goal of dominating in Russia and other
The forces of globalization are generally credited with the major role played in increasing the access of organizations to countless resources. Due to market liberalization for instance, large corporations are able to import cheap resources from various global regions and as such patronize the market through price leadership strategies. Nevertheless, another crucial characteristic of globalization is that it allows economic agents an incremental access to larger customer markets. This virtually means that manufacturers get to sell their products to numerous global regions and exponentially increase their revenues.
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.