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Global Strategy

By Nomintamir Jun 07, 2015 448 Words
Global Strategy… In a World of Nations? (summary)
Nomin-Erdene Ganbat / 甘諾敏 , A3140418
Companies are looking for a way to globalize by connecting their strategy which fit worlwide. This process is called multinational model or multidomestic strategy, which may be succesful than multidomestic strategy. In order to globalize, companies need to expand their market participation and choose a best way to develop their integrated worldwide strategy. Thus, there are three steps: Develop core business strategy, Intgernationalize the strategy and, Globalize the strategy.But most multinational companies follow the first two steps than the last step because of differences in each countries. Global strategy levers have five dimensions which include: Market participation, Product offering, Lacation of Value-Added activities, Marketing approach and Competitive moves. These steps are developed under a pure multidomestic strategy and a pure global strategy. From the cost reduction, improved quality of products and programs, enhanced customer preference and, increased competitive leverage companies can have benefits. Unfortunately, each global strategy lever has failing and they are market participation,product stardardization, activity concentration, uniform marketing and integrated competitive moves. In order to achieve profitable result, companies find the right path inbetween over and under globalizing and when to use industry globalization levers. It is similar to globalization of strategy and globalization potential of industry. Otherwise, company would suffer from the strategy that they are using. Global srategy has five major dimensions and many subdimensions as the potential of industry globalization is multidimensional. Industry drivers or industry conditions consists of four categories which market, cost, government and competitive driver. Depends on the strategy levers managers make different decisions. Market drivers have four sub categories: Homogeneous customer needs. When consumers in various countries want same type of product or service. Basically, homogeneous needs make participation in a large markets easier because of less types of products need to be promoted. Global Customers and there are two types of global customers: national and multinational Global Channels. It plays on differences in prices by buying at a lower price in one country and selling at higher price in another country. Transferable marketing. It is easier to expand internationally due to brand name and consumers trust. Cost drivers include economies of scale and scope, learning and experience, sourcing efficiencies, favorable logistics, differences in coutnry costs & skills, and, product development costs. Governmental drivers depend on the rules of different countries and affect the usage of all global strategy. It contains Favorable trade policies, Compatible technical standards and, Common marketing regulations. Competitive drivers are used when companies competitor is effecting their market. It is welcomed to use more than one strategy in particular basis in any given industry because of different factors in every countries.

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