Management
For firms to compete successfully on a global scale, several steps are taken. These include and not limited to diversifying, acquiring, and restructuring. Diversification takes two forms; product diversification and geographical diversification. Geographical diversification is the one that takes a firm into new markets on international levels. For a firm to be successful in new markets, it has to combine both product and geographical diversification. A set of activities is replicated that range from multinational replicators, far-flung conglomerates, and classic conglomerates. These steps make the firm able to match their competitors in the market.
Diversification reduces risks associated with single items or few items produced by a company. It also adds value to the goods making them rare, difficult to imitate, and may lead to organizational changes based on the diversification.
In acquisition of the firms, commonly referred to ‘mergers and acquisition’ is common in business. Acquisition involves transfer of control of assets, management, and operations making the acquirer a unit of the target firm. Merging involves creating a whole new entity from the merging firms. It helps the in ensuring that the firm does not begin from ground breaking in a new market targeted. It is also important since the merging and acquisition of the firms, the synergy, hubris, and managerial advantages make the firm establish itself quickly and hence thrive in the harsh competition.
Restructuring is may also be undertaken by a firm to enhance competition in new markets. It is motivated by merging and acquisition of the firms since such leads to the reduction of redundant assets. Restructuring leads to the reduction of production costs and hence makes the firm better placed in the new global markets (Mike Peng, 2003).
Work cited
Mike Peng. Global strategies. Cengage Learning, 2003. Retrieved from http://books.google.co.ke/books?id=nY4WAAAAQBAJ&pg=PA285&lpg=PA285&dq=Chapter+9+%E2%80%93+Diversifying,+Acquiring+and+Restructuring&source=bl&ots=y44kmVq9Nb&sig=tbONxotRsiFL-P_dsIs9Bpp7brs&hl=en&sa=X&ei=ahGHU-PBDcG00QWmyYG4Cg&redir_esc=y#v=onepage&q=Chapter%209%20%E2%80%93%20Diversifying%2C%20Acquiring%20and%20Restructuring&f=false on May 29, 2014.
