For small and large multi-national companies, there are many advantages and disadvantages of becoming a global business. A global business is considered any that competes with other businesses in the world market and whose competitive advantage is determined by businesses of the same nature around the world.
What is global strategy? And why is it important? Essentially, these three areas refer to those strategies designed to enable an organisation to achieve its objective of international expansion. If the company is still mainly focused on its home markets, then its strategies outside its home markets can be seen as international.
For example, a dairy company might sell some of its excess milk and cheese supplies outside its home country. But its main strategic focus is still directed to the home market. However, the Apple iPod was essentially following the same strategy everywhere in the world: One of the basic decisions in global strategy begins by considering just how much local variation, if any, there might be for a brand.
Another more basic decision might be whether to undertake any branding at all. It might be better to manufacture products for other companies that then undertake the expensive branding. Apple iPods are made in China with the Chinese company manufacturing to the Apple specification.
The Chinese company then avoids the expense of building a brand. But faces the strategic problem that Apple could fail to renew its contract with the Chinese company, which might then be in serious financial difficulty. As international activities have expanded at a company, it may have entered a number of different markets, each of which needs a strategy adapted to each market.
Together, these strategies form a multinational strategy. For example, a car company might have one strategy for the USA — specialist cars, higher prices — with another for European markets — smaller cars, fuel efficient — and yet another for developing countries — simple, low priced cars.
For some companies, their international activities have developed to such an extent that they essentially treat the world as one market with very limited variations for each country or world region. This is called a global strategy.
For example, the luxury goods company Gucchi sells essentially the same products in every country. Importantly, global strategy on this website is a shorthand for all three strategies above. Implications of the three definitions within global strategy: However, we have some objectives with regard to overseas activity and therefore need an international strategy.
Importantly, the competitive advantage — important in strategy development — is developed mainly for the home market. But it needs distinctive strategies for each of these markets because customer demand and, perhaps competition, are different in each country.
Importantly, competitive advantage is determined separately for each country. Importantly, competitive advantage is developed largely on a global basis.
Are there any other forms of global strategy?For small and large multi-national companies, there are many advantages and disadvantages of becoming a global business. A global business is considered any that competes with other businesses in the world market and whose competitive advantage is determined by businesses of the same nature around the world.
Q1. Discuss the advantages and disadvantages of standardization strategies and adaptation strategies in a global environment.
Standardization is the process by which a company makes it methods, especially its production processes, uniform/identical throughout its organization. Some aspects can be standardized, such as a logo, but others, such as packaging or advertising strategy, may or may not be used to develop a global marketing strategy.
A global marketing strategy is one component of a global strategy. It is important to alter the marketing mixed and marketing strategy to suit local tastes, meet special market needs and consumers non-identical requirements (Vrontis and Thrassou,).
Advantages and Disadvantages of Standardization Standardization and international uniformity has many advantages. Advantages and Disadvantages of a Marketing Strategy What Is the Difference in Global Advertising & International Advertising? Pros & Cons of Differentiation Strategy.
If you currently have a global demand or can create one for your product or service, it may be worthwhile to consider a global marketing strategy. Plan carefully to ensure the advantages and benefits outweigh the disadvantages and risks.