International Business Strategy - Annotated Bibliography Example

A) A critical analysis of the article en d ‘regional strategies for global leaders’ shows that creating a meaningful worldwide strategy in business for better results often comes from strong regional strategies which are carefully knit into one entity. Success stories of GE, Wal-Mart as well as Toyota can be attributed to this school of thought where regional economic activity has helped in promoting cross border integration which ultimately leads to globalisation. This can be linked to the proximity of countries in certain regions which share common things like culture, similar administrative issues such as free trade which has seen a boom in economic trade across regional countries over the past decades. According to the article, even the most successful multinational companies’ history is linked to their regions of origin. There are five different approaches to this regional strategy namely: home based strategy, portfolio strategy which seeks to build a regional portfolio, the hub strategy which is concerned with building regional bases, platform strategy which is about customisation of products as well as the mandate strategy which focuses on specialisation of particular products to the other regions. If properly implemented, all these strategies can add a competitive advantage to the organisation given that they are mainly concerned with improving efficiency in manufacturing as well as trade among regions and ultimately global markets. Popular brands across the globe can be identified with their regions of origin. Thus, it can be noted that regions represent just one way of aggregating across borders to achieve greater efficiencies than would be achievable with a country-by-country approach which is one notable interesting part of this regional strategy. Managers need to the culture of the people in regions they will be operating. (The main ideas were drawn from page 100 the first paragraph under the subheading Reality of regions.) What is interesting in reading this article is the fact business develops from grassroots level and it develops across regions until reaching a global stage. Most developed global businesses evolved from regional levels and they can be identified with their regions of origin. Indeed, I agree with this given that different products that are sold globally have traceable origins which can be linked to their regions. However, one notable difficulty encountered from a critical reading of this article is that there is no universally agreed definition of what constitutes a region. A region can be intra-national or international and this distinction is not clearly defined in this context. It can be noted that some Japanese companies like Toyota are doing very well in far of countries like in America and it does not necessarily mean that they have to be physically present when they manufacture their products. This can be attributed to their strategy of low cost production of efficient vehicles which are popular in far of geographical areas. In other words, this constitutes a region but a close analysis of the given article shows that the strategy of regionalization cannot be directly linked. Over and above it can be noted that the regional strategy is very important as far as global strategies are concerned. Particular products have an identity which can be traced to their regional backgrounds and they are moulded from this initiative. Likewise, a market is developed from a particular region and it expands to other countries globally which shows that the strategy of regions influences the growth of global strategies. B) In the same vein, a close analysis of the article entitled ‘Stonehouse ‘ shows that that both domestic and global strategies share a lot in common but they are somehow different. Though they are both based on core competencies, the major difference is that the scale and activities of global strategies are greater and they require a more holistic approach given that there are likely intricacies which can affect their fruitful implementation. According to Porter’s generic strategies (1986), generic cost leadership or differentiation can be implemented on a global scale depending on the targeted global market or global segment. Basically, configuration and coordination play a significant role. Thus, the question is about the number of nations whereby each activity is performed and how international activities are coordinated. Thus, a business can choose how it wants to operate among nations particularly manufacturing in one nation and exporting to the others whereby it can configure its products as deemed necessary. Concentrating activities in other nations can be advantageous but a competitive advantage can arise from dispersing activities in different nations though there are factors like exchange rates as well as government influence on economic activities taking place. Coordination according to Porter involves sharing information as well as responsibilities and aligning efforts to meet one goal. The success of business depends on its ability to coordinate international activities while at the same time retaining the needs of the local markets. Businesses develop from grassroots level and are expanded to cover other countries. Another method is configuration where a business can choose to concentrate its manufacturing in one country then exports to the other countries. This gives it an added advantage through concentrating activities or dispersing them since all these methods have different opportunities. Integration and responsiveness are other strategies. Total global integration of activities is primarily concerned with centralisation of management of geographically dispersed activities in order to minimise costs. Local responsiveness is another element where decisions ought to be taken locally where the markets conditions dictate the needs for local responsiveness. Thus corporate success at international level depends on the organisation’s ability to coordinate and integrate global activities while at the same time retaining responsiveness to demands of local markets. (The main idea is from page 182 first paragraph.) The concept of total global strategy implies that there ought to be standardisation of products and marketing and this has three separate components namely: developing the core strategy, internationalising the core strategy and globalising the international strategy (p187). Thus transnational business ought to incorporate strong geographical management, strong business management and strong worldwide functional management. What is interesting from reading this article is that global strategy and local responsiveness are complementary. Business grows from the grassroots level where a product is developed and marketed through different stages from the local market until it reaches a global market. What is very interesting is the fact that the success of global markets does not come from nowhere but concerted efforts are made from the grassroots level which is very true and the reason why I agree with this notion. A product can be received well on the global market when it performs well on the local market. Basically, the identity of the product is created from grassroots level and this is spread evenly as the market grows. Each product can be traced to its roots especially where it was developed. Though manufacturing can be spread across the globe, a product can be developed from one identifiable place as a way of avoiding copycats. However, the tricky part of the article is that domestic strategies are seen as different from global strategies while at the same time they emerge from the same background. Whilst an organisation can succeed in terms of business internationally, what has to be ascertained is the question that: Is the product going to be welcomed by all people internationally compared to the local market? When it comes to international markets, the tastes tend to differ and it may not be uniform. When dealing with global markets, it has to be borne in mind that there are different people who comprise that market and they may have different cultural values. The main question then is: who are the major customers in a global market? The market has to be segmented accordingly before launching a product. C) After reading the third article entitled ‘How local companies keep multinationals at bay,’ it can be noted that in order to win in the world’s fastest-growing markets, transnational giants have to compete with increasingly sophisticated home grown champions which may not be very easy. (Idea taken from page 2) research has shown that a study of companies in rapidly growing economies such as Brazil, China, India and Indonesia among others reveals that domestic companies are thriving in the face of competition (page 3). The strategies used by the local companies are effective compared to the transnational companies which have the misconception that emerging markets are years behind the developed markets which is not true. Local companies are in close contact with the people who comprise the market they will be serving hence they will be better positioned to know their needs and interests. Domestic companies often customise their products to meet the needs and interests of the local people which may not be possible with regards to transnational companies. The domestic companies are also better positioned to benefit from globalisation where they can get new technology and transform it to meet the requirements of their global markets. There is a six part strategy that can be adopted in establishing a home grown solution. (Page 4). Some of the strategies involve: customisation of products to meet even niche markets domestically, smart local companies are better positioned at identifying the key challenges that their mar­kets pose and from the get-go, at designing strategies to overcome or sidestep those obstacles (p7), local champions capitalise on cheap labour pool in their countries and take advantage of in house training (P9), local businesses are able to scale up quickly when a business opportunity has arisen and they invest in talent to sustain rapid growth. What is interesting about reading this article is that companies which can pursue several of the strategies stand better chances of winning against rival transnational companies. I agree with this notion given that local companies have firsthand knowledge about the needs and interests of the local people. Local companies operate within the markets they serve and they know the interests and needs of the customers they will be serving. They also have knowledge about their culture which must be taken into consideration when manufacturing products. However, what is difficult to understand from this article is that if multinational companies are to succeed on local champi­ons’ home ground, they must either copy the local companies’ strategy or they might need to develop their own strategies which are difficult to copy. There are other transnational companies which are always thriving in any country without copying the strategies of local companies. Coca cola Company is one good example. What is interesting from reading these articles is that they somehow share some similarities. Business grows from the grassroots level where a product is developed and marketed through different stages from the local market until it reaches a global market. I agree with the proposals made in these articles since it can be noted that the growth of business follows the same pattern across the globe. Establishing a business is not an event but a processes that goes through stages from the grassroots levels up to the global stage. Read More