Formulating and Communicating Global Strategies

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Formulating and Communicating Global Strategies

By | November 2012
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tamiu
2012
Formulating and Communicating Global Strategies
Business Strategy
Vanessa Frausto
tamiu
tamiu
2012
Formulating and Communicating Global Strategies
Business Strategy
Vanessa Frausto
tamiu

The world as we know it is becoming more globalized over time, but it wasn’t always this way. Many years ago, national markets were overwhelmingly separate. Globalization is the idea that many markets are now slowly melting together to form one global marketplace. The global acceptance of Coca-Cola, blue jeans, Starbucks, McDonald’s hamburgers, and Microsoft’s Windows operating system are examples of this trend (Hill & Jones, 2013). With globalization increasing it is becoming highly imperative that managers know what kind of global strategies to formulate and implement for their global corporations to gain the most profitability. Four global strategies companies can use are global standardization, localization, transnational, and international. These strategies all have distinct features and focus on two main competitive pressures firms face when entering a global market: cost pressures and pressures for local responsiveness. The last decision regarding global strategies will be there entry mode. Expanding a firm to outside national markets is not an easy venture. There are two main concepts that managers need to understand when formulating which kind of global strategy to use for their business. They should look at what type of products they are making and also decipher whether they are going to focus on reducing costs or meeting pressures for local responsiveness. Firms can either have low or high pressures for costs and low or high pressures for local responsiveness. Cost reduction pressures are highly associated with industries producing commodity products while pressures from local responsiveness are greatly linked to companies trying to satisfy global tastes and preferences, different infrastructure, different distribution channels, and...
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