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Global Market Challenges

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Managing global market challenges
Pushed by challenges, the transformation of organization, which involves three components - information systems, organization structure, and resources deployment, is strongly demanded. In each stages of international market development, the firms will have a different critical component to focus on.
Information systems technology
The information technology has changed the competitive landscape and interaction between individuals, firms, and between firms and the emerging challenges. The information is crucial for directing strategy, reducing uncertainty and risk, calculating the performance and operating linkages of the company. The information flow between functional units and between operations in different …show more content…

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 …show more content…

According to different economic and political imperatives, as well as different predisposition of the company, four distinct strategic planning models can be applied.
Model I: Top-down planning
In this model, the entire company, including the management in any levels and in any markets are fully controlled by the headquarters, under the tag of product groups. Companies must ensure that the advantages of integrating activities worldwide into a synchronous machine worth the high cost of management and the cost of ignoring local political imperatives before using this model. The potential advent of competitors also has to be taken in consider as it could shift back the market position of the company.
Model II: Bottom-up planning
In contract with model I, the company using model II will be divided into geographic units, such as nations, and mainly controlled only by financially aspect. The subsidiaries is considered as local national companies instead of being parts of a synchronous machine. In this model, the organization gain competitive advantages by strong financial support in term of risks, R&D costs and export efforts, while conforming the local political

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