Michael Porter's Model Of Globalization

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. According

According to Transnational Organization (n.d.), transnational strategy allows for the companies to attain the advantage of the global and multi-domestic strategies. The foreign components are integrated into the overall corporate structure across several dimensions, and all the components are authorized to become a source of specialized innovation. The organization that participates in the global business activities through local cooperation and interdependence among its headquarters, operations, and international subsidiaries, and its use of suitable global information technologies is using the management approach. Generally, the strategy that firms use is to achieve global efficiency and local

Ford is focusing a global market which makes them want to sell the same car to all market segments. By using this market strategy, it will help Ford’s to lower the cost of manufacturing because manufacturing the cars from different countries or different regions will make the cost higher. In order to reduce manufacturing costs, the strategy is used to appeals the consumer needs in many different countries. Based on the world car strategy, the main difficulty is how to design a car that can meet the consumers need or demand in many different countries. To overcome the issue, Ford took a page from BMW, which uses the concept of “fashion forward” when designing its 3 Series cars for multiple markets. According to Verena Kloos, president of BMW’s Design works in California is to “show consumers what they think in future will not reflect what they think now.” As James D. Farley, Ford’s global marketing chief, view that the global appeal of the 3 Series rests on trust and aspiration. People around the world see the same design, which may builds trust through ubiquity and familiarity and leads them to aspire to own the car themselves (Kiley, 2010). However, Rugman and Verbeke (2008) argued that most multinationals pursue more regional strategies and such transnational strategies and structure may not be as necessary as once