Introduction
Globalization as a new concept in the world today has become a core competitive strategy for the success of business in the world. Companies today are focusing mainly on the global market to ensure they are successful and to grant them diversification in different economies (Racine & Jean-Louis, 67). Having established with the performance of Starbucks Corporation in mind, Friend-Z’s Company will have considered global competitiveness strategy for the better operations. The global outlook of businesses today gives them an added advantage, and the customers can trust the global companies more. Starbuck Corporation among other multinational corporations can compete effectively through globalization. The company, for example, have been able to serve many regions in the world including the large part of America and hence able to compete effectively in its field. However, establishing the global outlook of the business needs more research and much consideration to ensure that all the environmental factors are taken care of.
This essay will consider various benefits of going global to China, Canada and the United Kingdom as a method of establishing competitiveness in the business. The essay also focusses on the integration of the environmental factors through close scanning of the environment for establishing the international view of the business. The essay will then look at the important methods and strategies for establishing a global company. It then focuses on the managerial aspects of taking a business globally and maintaining the global competitiveness of the business. This will all be centered towards establishing the global outlook for the Friend-Z’s Company as it prepares and strategizes to enter the new regions and countries for business.
Benefits and Advantages of Global Competitiveness
Given the internationally scattered and diversified market for the coffee in the world today, Friend-Z’s success may be highly dependent on the global outlooks of the company. Through the establishment of the global view of the company, the company will be able to enjoy the many benefits of globalization and hence be able to sell more of its product to the diversified market. Some of the benefits and the advantages which the business may capitalize on are discussed here. Firstly, the global competition gives the business the ability to open to the new markets in the world which ensure extended selling of its products (Racine & Jean-Louis, 89). Access to the customers is the most important factor in considering the extension of the business for more profitability. Through the extension of Friend-Z’s to other countries and states, the company business will be able to serve the larger number of customers spread throughout the region.
Secondly, as an international company, Friend-Z’s will be able to market the coffee products in the very same way the company does in our country. The cost of the market will, therefore, be distributed since the company will get access to many potential customers and hence more profitability. Extending the area of coverage throughout the various states in the US will mean that the same methods of doing marketing will be enhanced to match will the area of coverage with the expected high sales. Thirdly, through establishing the global competitive strategy, the company will be forced to develop new products which suit different regions (Racine & Jean-Louis, 123). Through the assessment of the needs, Friend-Z’s will consider the expansion of products and merchandise to satisfy the arising needs of the customers.
Fourthly, through the global competitiveness, variations in the markets will always be unescapable and hence there will be the need for Friend-Z’s to focus on the scanning its environment and establishing strategies for getting into the different market with different products and different strategies. This means that Friend-Z’s will consider the multi-domestic strategy where it focusses on the needs of the new market different to ensure customer satisfaction. Other benefits that Friend-Z’s may enjoy through the establishment if the global competitiveness is increased competition through technology and getting a global brand recognition as with the Starbucks Corporation whose operations and logos are known worldwide (Racine & Jean-Louis, 97). Friend-Z’s will also be able to consider that other company are competing locally in its backyard and hence has to respond by entering into their market for competitiveness while also considering the benefit of quick innovations benefit as the business gets the new marketplaces and hence new operations.
Environmental Effects in Competing on Global Basis
Amid the considerations of establishing a global competitiveness for the businesses, the external environmental factors if not well scanned can become a barrier to the success of the business (Saleem & Shaikh, 45). The external environment involves those factors which Friend-Z’s may not be able to influence or change but rather is supposed to work with and around for its successful business existence. These factors can be classified as political, economic, social, technological, ecological and legal. In establishing the business in China, Canada, and the United States, the company will have to consider the cultural characteristics of the individuals in the countries (Canzer & Brahm, 56). For example, Friend-Z’s will have to identify the values of the Chinese in China and what affects their behavior. The company will also have to consider the customs and cultural symbols used in China and other regions of consideration. The Chinese symbols, for example, are very many, and abuse of these symbols and customs may affect the general performance. The company would also be required to consider the languages used by these people. Language is essential for communication, and this strategy would thus help the management understands the measures and the employees to employ in their premises (Saleem & Shaikh, 231). Cultural gives an insight of the motivation to buy of the customers and hence the company may integrate these factors (Canzer & Brahm, 113).
Economic consideration forms an important consideration in the global strategizing of the business. In getting global, Friend-Z’s will have to consider such economic aspects as regional infrastructure, the currency used in the region, the purchasing power of the people in the region and the customer income in the region. For Friend-Z’s to venture in any region, the region ought to have the good infrastructure which includes the malls, the transport and energy infrastructures among others. Consumer income in the regions of consideration should be high enough as to enable the customers to pay for the relatively high prices of the coffee. The income would by far, however, determine the purchasing power of the customers as they may be able to get the extra money for spending for luxurious commodities and services (Canzer & Brahm, 245). Lastly, the currency in the regions should not be subject to constant inflations an aspect which leads to the unpredictability of the profitability (Saleem & Shaikh, 167). The currency should also be exchanged easily to ensure smooth global operations.
Political environment forms a crucial consideration in the case where the business ought to go global. Politics and political influences and policies in the country or under a political regime will determine how businesses will be carried I a given country or region (Canzer & Brahm, 47). In scanning the possible entry of China, United Kingdom, and Canada, political stability should be highly considered to establish whether the possible political changes and upheavals may affect the operation of Friend-Z’s in the region. Political scanning also determines the trade regulations which either enable or hinder the entry of new businesses and companies in the region (Saleem & Shaikh, 189). It is, therefore, important that the scanning process takes these factors into consideration.
Global Strategies for Global Competitiveness
In establishing the global competitiveness of the business, Friend-Z’s will have to consider the entry strategy of the business in the various regions and the strategies of establishing sustainability in the region. It is very imperative at this point to understand that different areas may call for different entry strategies. Some of the entry strategies to be considered by Friend-Z’s include establishing joint ventures with local firms, licensing, franchising, partnership and direct investment in the new market (Spulber & Daniel, 339). Some other consideration may be exporting the products to the new markets as an extension strategy for the business. Through such strategies such as joint ventures and partnership, the financial commitment will be shared while the disadvantage is that the company will not be able to enjoy the full benefits of the business (Spulber & Daniel, 342). This means that there is low risk in the business while at the same time the access to the environmental information will be eased through collaboration with the partners in the prospect market. On the other hand, direct into the new market calls for more financial commitment, more risk involvement and also more need to ensure strict control to its operations (Spulber & Daniel, 319). However, there is more profitability in the situation where the business can perform well.
Management for Global Competitiveness
Having understood the globalization strategy and global competitiveness in the business, Friend-Z’s needs to ensure appropriate management skills and consideration is taken attained to ensure successful integration of resources. The management of the information gained, the materials and resources available, the resources and the ultimate integration with the environment are crucial (Hitt, Michael & Robert, 56). Effective management and planning of the project should give a decision as to whether Friend-Z’s will use a multi-domestic strategy, a global strategy or multinational strategy.
For the assessment and planning, the management will start by selecting the sectors and markets for assessment. Then identify the relevant markets and the competitors such as Starbuck Corporation for consideration of their entry and performance. Then examine the market structure in the identified regions while considering the barriers to entry (Hitt, Michael & Robert, 78). The management will then have to ascertain the institutions and the government policies in the limit region competition a factor which will help Friend-Z’s to determine whether to use direct investment, partnership, franchising or joint venture (Hitt, Michael & Robert, 39). More so, Friend-Z’s will look for and consider the vested interests of the stakeholders concerned with the entry process of the company in the new market and then look at the possible and available signs of the anti-competitive conduct of the firms before eventually making a conclusion.
Works Cited
Canzer, Brahm. E-business: Strategic Thinking and Practice. Boston: Houghton Mifflin, 2006. Print.
Hitt, Michael A., D. Ireland, and Robert E. Hoskisson. Strategic Management: Competitiveness and Globalization: Concepts. Mason, OH [, etc.: South-Western, 2007. Print.
Racine, Jean-Louis. Harnessing Quality for Global' Competitiveness' in Eastern Europe and Central Asia'. Washington, DC: World Bank, 2011. Print.
Saleem, Shaikh. Business Environment. New Delhi: Pearson, 2010. Print.
Spulber, Daniel F. Global Competitive Strategy. Cambridge: Cambridge University Press, 2007. Print.
