This article dwells upon the post recession (of 2008) changing global business environment for the companies of developed countries. The author here predicts that the next decade will be characterised by weak global growth, high unemployment, costlier capital, stricter regulations and taxation and even increased protectionism. The author however has revealed the huge potential in the emerging markets (namely China and India) by stating the World Banks projection saying that the two countries will account for the 50% of global GDP by 2050. So, this article has tried to explain how a change in the strategic approach of the multinational companies (MNC) can help them benefit from these opportunities. The main issue of this article is to address how an MNC should review its expansion strategy in this hostile post recession operating environment. The author highlights the need of changes in several business processes. Beginning from the change in organizational strategy, the author recommends MNCs to address the changes required in target markets and products, rethink about the locations for operations and be more innovative, have a proper blend of local and foreign managers, and lastly, build a strong corporate identity and restore the reputation of business in general. ANALYSIS
Strategic issues involved
The article highlights the fact that after the 2008 crash international trade was projected to decline and FDI fell by more than 40% in 2009. Even in such hostile environment India and China were projecting growth. So the question arises, are the MNCs of the developed countries strategically equipped to seize this opportunity? The answer is a resounding NO. So then the major issue is what are the several strategy related dimensions that needs reviewing and what changes should MNCs make in those dimensions in order to enable them to successfully grasp the available opportunities.
Strategies to deal with those issues
The author states...
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