The global strategy is one that sacrifices responsiveness to the requirements of the locals within different markets for efficiency. The strategy is more concerned on the economies of scale since it prefers to provide the same product or service in each market. A good example would be Microsoft that offers the same products all over the world. The only thing they do is provide different languages to operate their products. The strategy has an upper hand over other international strategies such as the multi-domestic and the transnational strategies.
The multi-domestic strategy requires a firm to sacrifice efficiency to emphasize on responsiveness to the local needs within the market setting (gdfgvx). The company would need to compromise the interests of some groups of people to gin a wide range acceptance over a wider area. The firms might at times be forced to adopt some strategies that might not be favourable to everyone to get the interest of a certain audience. Therefore, there might be some slight modifications to a product in different markets.
Transnational strategy, on the other hand, seems to be the middle ground between the global strategy and then multi-domestic strategies. Any firm that adopts the strategy balances the need to adjust to local preferences and the desire for efficiency in different countries. A good example is what McDonalds does. The firm operates under the same brand name all over the world. The recipe is similar too but the company at times adapts to the culture of the locals to satisfy their needs. In France, for instance, the company sells wine since it is the central element in their diet.
However, for firms to reap all the benefits of that global strategy, they need understand the dynamics of global competition and nature of the nature of global industries. A well designed global strategy will be beneficial in various ways that include efficiency, risk coverage and strategic moves towards competitors. It will also be healthy for the reputation of the company and will as well provide a better opportunity to learn the interests of different people all over the world.
Efficiency will be achieved through economic of scale since the strategy will aid in reaching more people in the market. The strategy will as well take advantage of other countries' resources and labour. This would eliminate the need to hire employees from distant places and therefore cut on the hiring funds. Efficiency will also be achieved through extended product life cycle such that older products would be sold in countries are less developed. The same could be achieve through operational flexibility that utilize the advantage of different exchange rates in different countries.
The strategy has been known of its ability to provide a first mover advantage. It enhances subsidized prices across different areas and helps the business to transfer price. The strategy has various influences ranging from political, cultural, legal, social, economic and competitive influences.
Economic and competitive influence comes in when companies come to the realization that they are supposed to focus their efforts smaller segments of the global market. This is because in many countries wealth is known to be controlled by a small section of the inhabitants of the country. Therefore, the global strategy becomes truly dormant on this population by focusing on smaller key markets. This has been known to result to a regions economic growth through industrialization and importation of goods. The strategy is associated with rapid growth of infrastructure want to ease marketing efforts.
Political and legal influences are felt when any company trying to establish a business in any foreign country has to first consider the political and legal environment. If the environment is favourable, then it becomes easier for the company to establish itself within that country. Any political instability has been viewed as the major discouragement for a global strategy. Most governments come up with restrictions to protect their local business from foreign competition. These barriers define a company's involvement in any country. The restrictions are enhanced through tariffs, taxes, and custom on imports.
...(download the rest of the essay above)