Global strategy is basically the techniques used by an organization to achieve its international growth and development objective or goal. It is a short term representing three fields of business strategies, which are: global, multinational and international strategies meant to achieve success (Peng, 2013). The main purpose for this strategy is to help a business not only focus on its products’ home market but also develop its outside markets, international markets. Over the recent years, the global strategy has fully taken over the attention and focus of many multinational businesses corporations (Luo, 2017). These kind of businesses are putting a lot of effort in improving their business strategies towards becoming global strategies that are fully functional, effective and efficient for business success. With that in mind, the managers are the people who are taking control of the situation and managing the operations. For that reason, a number of managers are being involved in global or multinational conferences and meetings to discuss ways of improving their strategic plans. However, these forums and conferences have brought so much help and positive changes and effects to them, their business strategies and their businesses in general.
Global strategy involves the adjustments of different business operations and activities like, input purchasing, procurement, supply chain, human resource, accounting, sales and marketing, promotions, product distribution and most importantly management departments of the business among other activities and business sections (Ledere M, 2017). This means that, it is a technique which is capable of touching almost every part of the business activity and operation. Therefore, the business managers should be fully aware of what they really want to concentrate on i.e. which department or specific business operation they would like to develop into international operation. Also, they should analyze and evaluate every strategy of their business that they may need to take to the next level. However, they should also ensure that they are ready for the change by considering the business financial status, objectives and goals sets.
Just as I mentioned earlier, the global strategy is a technique that is used mostly by the Multinational Corporations (MNC). Therefore, they have to ensure that they definitely have a plan or framework before they begin the process. Also, they have to make sure that the objectives or goals are set and that they are completely independent to be able to achieve the objective of the operation. Often are the times when the organizational objectives and goals are dependent on each other and contradictory which makes the implementation process of the operation difficult to carry (Leder M, kurz M, & Lazarov P, 2017). Therefore, this means that the management should be ready to make any objective, goal or strategy adjustment whenever needed.
For the global strategy to be effectively implemented, the organization should: make sure that the global strategy objectives are capable of achieving their currently supposed purpose, be undoubtedly sure that they are able to absorb all the risks the strategy change may cause to the organization and should be ready to accept the external changes that it is about to face. The business should be able to have the solutions for every business challenge that they are facing or a potential challenge as well as answer any question that may be related to business strategies going global. Therefore, the business management must ensure that any decision to go global is definitely in line with the vision, mission, objectives, goals and aims of the business in general.
Another aspect to consider is the competitive advantage of a business. Competitive advantage is actually the main reason why some business change their operations. Therefore, the business should be able to know the difference between its current competitive advantage and its advantage when it joins the global market and how to keep the competitive advantage growing. However, apart from that, must also be able to differentiate between its products’ current market status and in the global market and the current market locations and those of the global market (Rothaermel, 2015).Therefore, when a business is able to find out all of the above, global strategy implementation will definitely be simple and easy to achieve.
Global strategy involves the change of business culture, market, customers to name a few changes. Therefore, the business must be able to learn as much as it can from the outside markets which it would like to join. This means that be it the markets, technology used to produce related goods, potential competitors and potential input sources among others. The business should be able to not only learn but understand the degree of change that may be caused by globalizing its strategies.
Businesses decide to globalize their strategies for different reasons and with various purposes in mind. The most common reasons are to: reaching mire markets, increasing sales, reducing production costs, reducing transportation costs, increase profits earned, improve innovation rate to name a few. However, one of the most common and popular reason is to increase commitment and market share. Nevertheless, I will discuss some of the reasons for a business going global:
Some businesses may have the need to increase the profits of their products by going global. However, this is applicable especially to businesses that deal with export products. They may have the idea that when they sell their products to the global market using their strategies, there are higher chances of increasing their profit levels because the sales will definitely increase due to the purchasing being done by the large customer population. Nonetheless, it is also precise to export products that are always preferred by the importing customers than the products from their own country producers.
Going global basically means increasing the customer base and market share for the product i.e. different customers, different cultures, different beliefs and needs with different preferences of the same product. Therefore, when these two improves, it means that there are better chances of innovation and invention development with the aim of satisfying the growing number of consumers (Cuervo-Cazurra, A, Ganitsky, J, Luo, Y, & Mezias, J, 2016).Therefore, the business will have the desire to fund new product developments according to the customer needs.
When a business gets involved in international business its customers number increase and the sales rates will definitely go high. The business will certainly have come up with various ways of satisfying different customers and therefore production of different products. This means that they will be aiming at increasing their product purchases by the many customers.
A business that wants to improve its efficiency levels will definitely look for chances in the international markets, this is simply because in the international market there are better technologies available, labor cost is cheap, raw materials are available and cheap among other things involved in production of any product or service. Therefore, with all these aspects bringing advantage to the business, they will certainly desire to go global.
Generally, many multinational businesses are faced with a lot of risks that affect their success levels. These risks include the macroeconomic risks, resources risks and competitive risks. Therefore, for the businesses to achieve its objectives, then it must be able to cope or do away with these risks. One of the ways of cabbing these kinds of risks is by going international where the markets are much larger and the possibility of the benefits being more than the disadvantages are very high (Banaleiva, E, R & Dhanaraj, C, 2013). Therefore, when a business go international, there are better possibilities of improving itself and achieving it objectives than when in the home market only.
When businesses are selling products in their home countries only, the number of customers is definitely limited. However, when businesses go global, the number of potential consumers increase because of the increase in population in other different countries (Steenkamp, 2017). Therefore, this means that the market share and segment is going to be better, larger and reliable.
Other reasons that may lead a business into going international include: the need to take advantage of the government incentives especially for the exports, possibility of investing in long-term and short-term securities and have the advantage of exclusory especially in terms of global information.
There are different benefits that accrue to businesses going international apart from the main reason itself. They may include some of the following:
There are different importance of global strategy which vary according to the receiver. Therefore, it means it will depend with the receiver’s perspective.
As for the company, the importance is in relation to increase in profit levels, increase market share, satisfy customers to the fullest, innovation and invention and many other reasons that are discussed above.
A consumer is the end user of the product or service. Therefore, the importance of globalization to them will be for the products and services can be of: good quality, lower prices and available for them to purchase. Additionally, they would also like businesses to go international so that they can be able to bring the products and services closer to them, especially for countries that depend on certain and specific exported products or services.
This may include organizations like the World Bank
These organizations are the ones that come up with laws, rules and regulations that govern the international markets. However, there are problems that are involved when these rules are made. Therefore, the reason why these organizations would want businesses to go global is to make sure that there are no quarrels between countries because of certain laws made to govern their trade. Their aim is to help solve of the border challenges and differences between trading businesses.
Conclusion
Based on the above research and discussion, I have realized that global strategy is not just about a business growing and developing itself, but it also relates to the management decisions made and the business operations in general. The effectiveness of the management decisions solely affect the global strategy effectiveness of the business. Also, form the benefits listed above, it is clear how important it is for a business to go international especially multinational corporations. Therefore, I can say that in spite of how a business has grown and developed i.e. either small or large, it is certainly vital for it to go global.
References
Peng, M. W. (2013). Global strategy. Cengage learning.
Ghemawat, P. (2013). Redefining global strategy: Crossing borders in a world where differences still matter. Harvard Business Press.
Rothaermel, F. T. (2015). Strategic management. New York, NY: McGraw-Hill.
Cuervo-Cazurra, A., Ganitsky, J., Luo, Y., & Mezias, J. (2016). Global Strategy and Emerging Markets. AIB Insights, 16(4), 3.
Mol, M. J., Stadler, C., & Ariño, A. (2017). Africa: the new frontier for global strategy scholars. Global Strategy Journal, 7(1), 3-9.
Cuervo?Cazurra, A., Mudambi, R., & Pedersen, T. (2017). Globalization: Rising Skepticism. Global Strategy Journal.
Coeurderoy, R., & Verbeke, A. (2016). The Unbalanced Geography of the World’s Largest MNES: Institutional Quality and Head Office Distribution Across Countries. Global Strategy Journal, 6(2), 127-148.
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