With the ever increasing competition, all the competing firms are looking to expand and operate the business at the global level and this demand for the implementation of the global strategy. Expansion and operation of the business at a global level has become imperative to increase the market share as well as the profits. If a firm remains localized, then the big firms will eventually end up capturing the market of the small firm, and the firm will be kicked out of the market. But, entering into the ocean of global market is a difficult task because the company must be strong enough in terms of resources to face the competition. One of the strongest reasons for giving a very high concern to the resources in the global strategy is for the development of competitive products and avoid any legal actions for low-quality products (Frynas & Mellahi, 2015). In addition to this, the limitation in resources makes the utilization of the resources effectively to be the greatest challenge.
The resources are also a concern in the global strategy because the firm needs to maintain the environmental standards while utilizing the resources. Any violation of the regulations regarding the resource utilization will lead to the severe consequences.
For the business in China, one of the most important resources that are of concern is the availability of raw materials, technologically advanced resources, and communication. For the global company, the communications, and advanced technologies prove to the vital resources because of the overseas location of the subsidiaries. In addition to these, easy access to financial resources, availability of skilled, semi-skilled and unskilled human force is also the important resource to concern about.
These resources will have multiple impacts on the operation of the company in China. If there is no easy availability of raw material and human resources, then the demand of the people in China and in abroad cannot be met because production is hampered. Lack of technology will push the organization backward as the work cannot be mechanized and it becomes difficult to perform work quickly. This affects the efficiency of the organization. The decision to shift to China must be accessed based on the financial laws and regulations. The tax laws and laws that govern the business must be suitable for the business. Else, the business will suffer due to hard and strict regulations. China is the nation with the largest population so the company will have the larger option to choose its human resource. With a large population, the company will not have to face the shortage of human resources (Thomas, Smith & Diez, 2013). So, the availability and accessibility of these resources will be the driving force to enforce the decision to move the facility to China.
The company must have well formulated and implemented a strategy to remain competitive in the market. However, when the company decides to enter the new market, then its strategy must be changed accordingly. The decision to move to China will affect the competitive strategy of the firm. After entering to the Chinese market, the firm will be exposed to global competition. There will be many firms with whom the company will have to compete with. This forces the company to update its competitive strategy. The quality of product needs to be increased while the cost must be reduced. The resources must be optimally used so that the efficiency is increased. In order to accomplish this, the corporation must change its strategy, and even the structure might demand the change. The quality of resource will affect the competitiveness of the company (Peng, 2013). Hence, the company must focus on updating the strategy once the company enters into the Chinese market.
The company will be exposed to bigger competition if it enters to the Chinese market. However, the company must focus on updating its resources and strategy to remain competitive in the market.
References
Frynas, J.G., & Mellahi, K. (2015). Global Strategic Management. USA: Oxford University Press.
Peng, M. (2013). Global Strategy. USA: Cengage Learning.
Thomas, H., Smith, R., & Diez, F. (2013). Human Capital and Global Business Strategy. USA: Cambridge University Press.
