The globalization of markets is approaching. The multinational organizations and the global corporation are different. The multinational organizations usually function in different countries and produce or offer their products and services by aligning them with the typical need of that nation which in turn involves comparatively high price. While the global corporation normally functions with decisive perception at low costs by assuming that the entire globe is an undivided entity, it trades the same products and provides same services to all countries irrespective of their need. Business globalization drivers like potential market, cost, and different industry circumstances are decided externally.
Therefore, it allows these firms to sell a standardized product worldwide. Global strategies require firms to tightly coordinate their product and pricing strategies across international markets and locations, and therefore firms that pursue a global strategy are typically highly centralized. Global strategy involves thinking in an integrated way about all aspects of a business-its suppliers, production sites, markets, and competition. It involves assessing every product or service from the perspective of both domestic and international market
Although developing nations have opened their economies to international corporations, these companies still find it hard to access reliable information about customers, especially low-income earners (Khanna and Krishna 67). Multinational firms risk starting subsidiaries in developing countries due to the absence of useful data about consumer trends. The lack of sophisticated market research firms and advertising agencies in developing countries make it impossible for multinational corporations to find databases with consumption patterns, which would allow them to formulate favorable marketing
In the initial stage of internationalization, the allocation decision is made using the framework of domestic market, then base on the current market potential in the next stage, meanwhile the companies have to notice the cross-nation resource deployment to avoid duplication of effort. The need of efficiency in the last phase of globalization urges firms to deploy their resources rationally and in a balanced way to seize the opportunities and ensure the growth as well as the maturation of the company. Challenges of strategic planning When a company operate a subsidiary in a foreign country, the conflict between economic imperative - which determines where the elements of the business should locate, and political imperative - which is create by the demand of the host country, could emerges. Economic imperative Base on the economic factors, companies have two distinct strategic options when operating in an industry: Global strategy or country-centered strategy. The choice can be made by determining the proportion of product value added in upstream or downstream of the value chain, as well as the company's competitive segment in the value
When a firm successfully formulates and implement value-creating strategy, by put the commitments on action so that it increases the range of opportunities for firms to compete in the market. At this area, globalization happen when the resources and the capabilities found in the home country or the headquarters allow the firms to pursue the strategy into market located in other countries. Based on Michael Porter’s model, four factors that contributed to the firm in a dominant global industry are factor of production which is land, labour, capital. The second dimension is demand conditions where the nature and size of buyers need. Third dimension is a related and supporting industry and lastly the firm strategy, structure and rivalry.
1.0 Introduction Most firms are eyeing on the global marketplace to improve their competitiveness. There are however many controversies on the most effective marketing strategy in the international market. There is growing importance of international marketing and various issues must be considered in order to successfully compete globally. A global marketing strategy encompasses countries from several regions in the world and coordinates a firm's marketing effort in markets in these countries. There is therefore need for companies to adopt more coordinated global marketing strategies once they have a significant presence in several countries and regions.
Understanding diverse cultures and adapting business operations to suit different cultures is vital part of International business expansion. According to David (2009, p. 7), “the failure to understand cultural differences can bear serious consequences”. In addition, knowledge for and appreciation of other cultures is
In my essay I will talk about different business strategies which companies can adopt in case of responding to issues of globalization. First of all I would like to define all the terms that will appear in my essay. Globalization is the global evolution toward economic, financial, trade, and communications integration which implies the opening of regional and nationalistic perspectives to a wide attitude of an interconnected and interdependent world with free transfer of capital, goods, and services across domestic frontiers. Growth strategy is a strategy aimed at winning greater market share, even at the expense of short-term profit. If we consider globalization process according to SWOT analysis, we will obtain its strengths, weaknesses,
For example, the majority of the world’s computers use Microsoft’s Windows operating system. Clearly, standardising of computer operating systems and platforms creates considerable benefits, but critics argue that this leads to a lack of product diversity, as well as presenting barriers to entry to small and local companies. • Free market imbalance: Large multinational companies can easily switch their capital between different territories in search for the place with most favourable regulations. And then they can operate as local monopolies of labour and push the wages lower than the market equilibrium. • Recession: the people who criticize globalisation also point out the potential loss of jobs in domestic markets due to unfair trade or an increase in trade.
In a context of globalized world, new questions emerge in the companies. Culture represents a real challenge for the implementation of business strategies. We based our thinking on a specific point of business communication: the marketing communication. How to conduct a successful marketing communication strategy in a globalized environment? 1.