This report critically examines and reviews the definition, description and features of global strategy. This will include a review of the components of global strategy and what it does in the world of business. The report will evaluate the elements and features of global strategy and how it relates to contemporary businesses.
Definition and Importance of Global Strategy
Global strategy is defined in many ways and forms. Due to that, it has different perspectives and provide a framework for the evaluation of how a company sets out its corporate structures in the worldwide context. This section will look at dominant definitions and concepts that relate to global strategy.
A simple and classic definition views global strategy as “strategy of firms around the globe—essentially various firms' theories about how to compete successfully”. This is about a collective conception and presentation of a corporate plan for operating and competing in the global markets within which a company operates.
“Global strategy as defined in business terms is an organization's strategic guide to globalization. This includes the long-term, worldwide, top-level management strategy for the entire company.” . This implies that global strategy has to do with the plans that a firm has to create a sustainable system within which a company can compete and carry out its goals and vision and mission across different markets around the world. Global strategy is about the long-term positioning and achievement of sustained results throughout the company and its future. This covers the different business units that the company has around the world and there are many ways through which the company is able to standardize and create a holistic approach through which the company can operate and achieve its aims and ends around the world.
Furthermore, global strategy is a function of the top level management. This top level management or directors are seen as the strategic-level managers of the company. Thus, they decide how to position the company in the international community and find the best way through which the firm can participate and achieve optimal results. Global strategy is often expressed by the regional and divisional management who contribute to the creation of an emergent strategy and system for the achievement of optimal results in the company. Global strategy is often created by the contribution of different directors in the global matrix and global organizational structure system that contribute to regional success of the company. The presentation of information from different geographical management and strategic leaders of a company come together to create a framework for the achievement of an appropriate strategy that works to achieve the best interest of the company in the long-run.
“A global strategy involves a carefully crafted single for the entire network of subsidiaries and partners, encompassing many countries simultaneously and leveraging synergies across many countries. This stands in contrast to an international strategy, which involves a wide variety of business strategies across countries across countries and a high level of adaptation to the local business environment”
The definition of Frynas and Mellahi shows that a global strategy is more or less an integrated strategy that brings together all the different strategies across the regions within which the company operates with the view of creating a broad and large strategy that allows the company to achieve the best of results. This implies that global strategy is a consolidation and aggregation of different corporate strategies across the regions the firm operates in order to create an optimal strategy and system of governance and control in order to achieve the vision and mission of the company across different zones.
A global strategy is meant to be a unified and a combination of different strategies. This is because it creates one big strategy that will operate throughout the different zones of the company. This is the contrast global strategy has with international strategy. International strategy is meant to be an independent strategy that operates in a region or zone within which a company operates. This is different from a global strategy because a global strategy is meant to cover all the areas and zones within which a company operates and carries out its activities and processes. International strategy is meant to be just a small area and zone of the company. Thus a company can have many different international strategy. However, global strategy is one single and unified system and process within which the company operates. Global strategy is an umbrella strategy that brings together different strategies.
There is a difference between globalization and localization. International strategy is about creation a locally relevant or the regionalization of global strategy in order to meet specific needs for specific regions. This is under the global strategy but is more of an international strategy that will lead to the best of the company and its goals.
Relevance to Company Success
A global strategy is a system through which a company identifies the extent of the options and opportunities on the market and from there, identifying the best way of optimizing these opportunities. Therefore, global strategy takes a holistic and overall view of the markets and corporate environment as it exists around the world and this culminates in the formulation of a companywide plan and long-term view of how to achieve the best things for the company and for its stakeholders.
An authority in the field of global strategy identifies that global strategy does two main things:
Develops a custom-fit international strategy that is applied throughout the worldwide operations of the company;
Selection of foreign markets
This is because there is always a set of realities that defines the operation of a given business. These pointers include a series of small strategies and small pointers that must be put together and applied in ways that causes the company to achieve the best of results and operate in the most appropriate and most dynamic fashion. The essence of global strategy is that it helps the company to position itself in the best way by bringing together the different possibilities of going international. This includes the identification of the realities that are relevant and the creation of a process whereby nothing but the best options for the company is chosen for the achievement of results.
Description of Components
Global strategy includes “global market participation, product standardization, integrated competitive moves, coordination and concentration of value-adding activities as well as action programs”. This is because global strategy seeks to identify the best way through which a company can operate and carry out its activities on the global markets. Therefore, it is necessary and important for the top level management of the company to come together to define what must be done and how this must be done. This therefore reduces global strategy to some pointers including:
Internal Analysis of the company;
Global External Analysis of the environment;
Competitor and Industry Analysis
Identification of Opportunities and Threats
Formulation of Global Strategy.
This is because there is the need for the identification of the resources of the company and how these resources work and can be applied for the achievement of optimal results. Then there is the need for the global environmental analysis. This includes the evaluation of the pointers on the global market that are relevant. This leads to discussions on the competitors in the industry. From this assessment, the opportunities and threats available to the company can be deduced. And this will lead to the formulation of the long-term plan which will include the market participation, product standardization, competitive moves, coordination, and presentation of value added services.
Risks and Prevention
Fundamentally, the formulation of a global strategy is based on the assumption that a firm is creating a global plan that will be applied to all outlets of the company without an express desire to vary or change the strategy to fit local conditions. This comes with the risk of trying to impose a completely impractical and almost negative situation on the local or regional operations of the company. The popular case of the global strategy is the case of McDonalds which seeks to provide its services to all people outside America on the basis of the model that is applied.
There are huge variations in the different markets a firm operates. Thus for instance, there is a difference between the emerging markets and the developed markets. Hence, trying to implement a one-size-fits-all strategy for all these markets lead to many practical challenges and problems. This is to be presented by allowing some degree of localization in the actual implementation of a global strategy. This is based on the fact that a company will have to present its strategy and global plans in such a way that there are some inputs that are made and given on the basis of what the company actually does. This leads to major changes and modifications that leads to better results that are most relevant to the company
Success Story
McDonalds is a very successful company that appoints a global strategy. McDonalds implements the same global strategy for consumers in America and around the world. This is based on the achievement of customer and brand loyalty. That is because they have created a brand that is known throughout the world. And through that, they are able to sell and promote their plans across the world by defining what consumers want around the world and providing it. Through this, they target a class of consumers throughout the world and what they want to achieve in life. This leads to the achievement of proper results and better services to all classes of consumers around the globe.
Lessons Learnt
Global strategy is the creation of a plan and a strategy that is used to enter the markets around the world. Unlike international strategy, a global strategy is a single unified strategy that works and is applied to all different units of the company irrespective of where they are located around the world. This includes the presentation of a strategy that is workable and productive across the globe.
This research has presented some information about how global strategy is formulated and how it differs from other types of strategy. It is formulated like other forms of strategy but done in a way that reflects all the necessary elements and features of a global market.
The most surprising aspect discovered is that global strategy is possible to work sometimes throughout the different countries without much change – as the case of McDonalds shows. This indicates that with the proper targeting and planning a company can provide its services to all people around the world without issues through a single global strategy.
Works Cited
Campbell, David, David Edgar and George Stonehouse. Business Strategy: An Introduction. London: Palgrave Macmillan, 2012. Print.
Frynas, Jedrzej George and Kamel Mellahi. Global Strategic Management. New York: Oxford University Press, 2015. Print.
Inkpen, Andrew and Kannan Ramaswamy. Global Strategy: Creating and Sustaining Advantage across Borders. New York: Oxford University Press, 2014. Print.
Jansson, Hans. International Business Strategy in Emerging Country Markets. New York: Edward Elgar, 2014. Print.
Neubert, Michael. Global Market Strategies: How to Turn Your Company Into a Successful International Enterprise. Berlin: Campus Verlag, 2015. Print.
Peng, Mike. Global Strategy. Mason, OH: Cengage, 2014. Print.
