When a company is oriented to globalization strategies, it focuses on overcoming the national barriers in market and industry with references to coping with financial and cultural issues. Today, it is possible to speak about the company’s competitive advantage when the company can operate successfully globally and according to the trends associated with the globalization processes.
Fortune 500 firms develop their globalization strategies basing on the local success which once was achieved with the help of the effective use of the firm’s resources. That is why, it is possible to state that the resource-based competitive advantage is the necessary factor for promoting the Fortune 500 firms’ globalization strategies.
Competitive advantage is the ability of the company to implement unique and effective strategies which provide the significant advantage over competitors within the industry (Barney, 1991; Barney, 2001). Basing on the modern globalization trends, it is necessary to note that competitive advantage should be supported with references to following the principles of sustainability.
Moreover, the company’s capacities are assessed referring to the customers’ interests in the brand. As a result, the Fortune 500 firms create their competitive advantage with the help of the internal resources used. Barney distinguishes between the physical capital resources, human capital resources, and organizational capital resources (Barney, 1991).
To succeed within the market, such companies as Google, Toyota Motor, Microsoft, and Wal-Mart focus on using the valuable and rare human capital and organizational capital resources as the main forces. Less attention is paid to physical capital resources because they are more imitable. The success of the company is in developing the unique strategy or approach in order to win the advantage (Barney, 1991).
That is why, the Fortune 500 firms work out globalization strategies basing on the resources which are difficult to imitate or substitute. The strong and effective organizations as well as quality employees are perceived as the internal strengths of the Fortune 500 firms.
Operational Barriers to Success
To operate successfully within the highly competitive environment, companies should concentrate on improving their strategies in order to propose new opportunities, services, and products for their customers. As a result, successful companies should orient to the further movement and be progressive in comparison with their competitors (Gopalakrishnan, Kessler, & Scillitoe, 2010).
Being at the path to their success, the company can become challenged by a lot of difficulties or barriers associated with the problems in the company’s advertising, production, communication with customers, organization, or culture.
Moreover, the progress of the company is often based on using innovation in technologies and organization. Focusing on the barriers to adopt innovative practices and processes, it is possible to determine three preventive factors.
Barriers to innovation can be discussed as factors which prevent the company to adopt and implement innovative practices which can significantly improve the production process or organization’s structure and strategies. From this perspective, the discussed barriers prevent the company from the further progress within the market where competitors can use innovation actively.
Nevertheless, it is possible to examine barriers from the positive point because the implementation of innovation is often associated with significant risks, and the focus on barriers help the company develop the most adequate and appropriate variant of implementing the definite innovation in the process. Three barriers are the lack of budget, the improper planning and forecasting, and the individual factor.
Thus, in spite of the fact that the company is oriented toward developing and creating the advantageous value, the implementation of innovation cannot be realized because of the lack of the necessary budget.
The problem can depend on the inability of the senior management to distribute the financial resources appropriately in order to focus on the long-term goals and gaining more profits because of implementing innovation successfully (Russell & Taylor, 2010). The change of priorities in distribution of the resources can contribute to overcoming the discussed barrier.
The next barrier is the improper planning of the innovation implementation into the company’s processes. To guarantee the effective implementation of innovation, it is necessary to develop the detailed plan. Strategic managers can fail while developing the appropriate plan because they focus on the immediate positive results and benefits (Russell & Taylor, 2010).
Furthermore, the implementation of innovation is associated with significant shifts and changes within the company. The fear of changes and impossibility to forecast the outcomes prevent companies from implementing innovations successfully. That is why, managers can overcome the barrier focusing on planning as the extremely significant stage in the implementation process.
Furthermore, it is important to pay attention to the individual factor as the significant barrier to adopt the innovative practices. Employees as well as managers can reject changes without references to their necessity and advantages because of needs to change approaches, to train to use new technologies or schemes of work, or to work following new requirements and standards (Gopalakrishnan, Kessler, & Scillitoe, 2010).
To overcome the barrier, it is necessary to concentrate on the additional training for employees and on providing the information about clear benefits of implementing innovations which can change the traditional working processes.
References
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
Barney, J. B. (2001). Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Journal of Management, 27(6), 643–650.
Gopalakrishnan, S., Kessler, E. H., & Scillitoe, J. L. (2010). Navigating the innovation landscape: Past research, present practice, and future trends. Organization Management Journal, 7(4), 262–277.
Russell, R., & Taylor, B. (2010). Operations management: Creating value along the supply chain. USA: Wiley.