Analyze the following: Describe the differences between ‘global’ and ‘internatio
ID: 426561 • Letter: A
Question
Analyze the following:
Describe the differences between ‘global’ and ‘international regional’ strategies.
Discuss the features, issues and challenges that distinguish global strategies from domestic strategies?
Discuss the impact of generic global strategies? For example, applications of Porter’s low cost, differentiation and focus strategies?
Discuss the implications of global and international regional strategies for different departments and functions. For example, finance & budgeting; human resources; legal counsel; operations & production; marketing.
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Explanation / Answer
Describe the differences between ‘global’ and ‘international regional’ strategies.
A global strategy is the strategy of pursuing opportunities anywhere in the world that enable a firm to optimize its business functions in the countries in which it operates. (Pearce & Robinson, 2015, p. 128) Global strategy is attempting to promote standardization and customization. The global strategy is one that allows a company to maximize benefits across the world, and reach out to consumers everywhere. An international regional strategy is one that is more focused on a specific region, but beyond the typical region a company would market to. (Ghemawat, 2005, p. 107) The downside to both is that it can take a long time to implement a regional strategy, either way, there are key differences in global and international regional strategies. In a way, global strategies will be more generic compared to the other as it attempts to satisfy a larger consumer group.
Discuss the features, issues and challenges that distinguish global strategies from domestic strategies?
As I stated in the previous question, a global strategy’s greatest challenge to not be generic across all region. This has the impact of empowering a domestic strategy because a domestic strategy is typically going to more focused. Understanding the strategic orientation of a global firm will enable it to have a more focused strategy. If a company adopts a polycentric orientation, the culture of the country in which the strategy will be implemented can dominate a company’s international decision-making process. (Pearce & Robinson, 2015, p. 133) In other words, the company adapts to the region to adopt the right course of action that will enable it to be successful in that region. This brings up the point that companies may be facing a multidomestic industry, or where competition is segmented from country to country. (Pearce & Robinson, 2015, p. 138) On the other hand a global strategy will be far reaching compared to a domestic, and the adaptability of a company will enable it to change itself based on market conditions.
Discuss the impact of generic global strategies? For example, applications of Porter’s low cost, differentiation and focus strategies?
Focusing on one aspect and attempting to apply it globally, while it may work in the short term, it is not a long-term strategy. Theodore Levitt may have been on the right track in 1983 when he declared a global market with uniform products and services across the board, but this is no longer the case. (Holt, Quelch& Taylor, 2004, p. 69) Additionally, one strategy is not proven to effective across all regions. To create a competitive advantage, a strategy should do an analysis of Porters source for competitive advantage and determine the best of the three basic competitive advantages that must be utilized to be successful. (Blythe & Zimmerman, 2004, p. 374) Additionally, a generic global strategy may not have the impact a company is seeking in all regions, it would be a one size fits all approach.
Discuss the implications of global and international regional strategies for different departments and functions. For example, finance & budgeting; human resources; legal counsel; operations & production; marketing.
The impact on departments and functions would be far reaching. In finance and budgeting, understanding the cost of entering a new market and penetrating the competition will be a top priority, which advice and requests they can give to management at all levels to make informed decisions. Human resources would be affected and tasked with understanding the culture of the new market and how the culture will impact the company and products they will market in that region. The implication on legal counsel will need to be addressed understanding the regions laws while respecting the laws of the company in the country it operates in. Operations and production, will be stressed to identify the type of products that need to either be developed or adapted to meet the specific needs of the global or regional strategy. Additionally, it will need to be determined whether it would be more cost effective building a factory in multiple regions to keep up with demand and drive costs down in specific regions. Finally, marketing will have to aligned with human resources to get an understanding of the global market and how the product will best be sold to and marketed in each region.
Blythe, J. & Zimmerman, A. Strategic planning for global markets. Marketing Review 2004 (4), 369ff.
Ghemawat, Pankaj. Regional strategies for global leadership. HBR, Dec 2005.
Holt, D. B., Quelch, J.A., Taylor, E. L. How global brands compete. HBR, Sep 2004.
Pearce, J. A., II, & Robinson, R. (2015). Strategic Management: Planning for Domestic & Global Competition (14th ed.). New York, NY: McGraw-Hill Education.
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