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Economic Policies in The Global Economy Qualitative Research Essay


The recent spate of economic recession in the global economy and eventually national economy has prompted policymakers to consider diverse aspects of expansionary economic policies. To some extent, policymakers have adopted policies that can be considered unconventional and highly aggressive in hope that desirable economic conditions can be obtained.

Whereas monetary policy has been used to ease quantitative pressures, fiscal policies have attempted to reduce taxes and increase government spending. There have been widespread changes in the way economists view the efficacy of discretionary policies by the Federal government since the publication of Keynes’s work of ‘General Theory’ (Keynes).

Indeed, the experiences of the 1930 depression and the subsequent World War II brought about consensus amongst economists about the importance of fiscal multiplier effect. Furthermore, it became apparent that expansionary economic policies were important in sparking business cycle in an economy through contraction of economic downturns.

Numerous historical experiences served as important aspects of opening up the economic understanding about the importance of monetary and fiscal policies in enhancing economic growth and revival from recessionary effects. For instance, the 1960s and 70s revealed to economists that monetary policy was an important component of economic performance.

Furthermore, the experiences of 1970s and 80s opened up the understanding about the importance of supply-side of expenditure and tax policies and how they affected the economy. Indeed, carefully developed monetary and fiscal policies can ultimately salvage an economy in depression and recession.

Bureaucracy within emerging markets can be defined as the study of roles and functions of government departments and agencies. It also encompasses the association between the various government bodies and important national arms such as the Judiciary and Legislature. Additionally Bureaucracy defines the institutional set-up as well as the conduct of the various government departments.

Max Weber (1947) argued that in a bureaucratic system there needs to be separation of tasks, qualified man power with distinctive skills, a well defined institutional arrangement that depicts a clear chain of command; with each unit having its unique obligations, and finally there should be elaborate regulations that define the channels of power and ensures responsibility.

The first analysis of the American Bureaucracy is attributed to three individuals, Goodnow, Gulick and Taylor.

Although Goodnow acknowledged that it is difficult to detach politics from governance he believed that the two can function outside of each other and as such advocated for their separation. The separation of roles brought about certain achievements; there was a deliberate attempt to research and execute bureaucracy in a methodical way.

In the meantime attention was drawn towards the planning of administrative agencies that would create, embrace and execute guidelines. There were also attempts made towards unearthing the best practices of governance, discovering the most effective means of creating labor procedures and defining the institutional composition.

The idea of creation of labor procedures is mostly associated with Fredrick W. Taylor (1919) who had done a number of trials to conclude on how labor should be organized.

The separation of duties was vital with top administrators tasked with defining roles and their subordinates mandated to respond to the roles as discharged. There was a shift in focus from all procedures entailed in achieving desired outcomes to other essential factors.

Fiscal policy and expansionary policy

Prior to the 1930s, classical economists were of the opinion that there was no need for government intervention in economic downturns as the economy would eventually adjust. Therefore, the government was to assume nothing was wrong and wait for the economy to correct itself without any interference.

Nevertheless, the subsequent massive negative economic downturns of the 1930s and WWII prompted policymakers to rethink their stand (Hemming et al.). Thus economic policy intervention was given some serious thoughts. The enactment of fiscal policy is often through the Congress and the White House. It particularly seeks to make adjustments in the level of government spending as well as the level of taxation.

Economic slowdowns often attract expansionary fiscal policies. Consequently, there are increases in the level of government spending and also reductions in the level of taxation.

The classical economists were the earliest to make an attempt towards the development of a theoretical framework through which aggregate demand could be explained. Similarly, classical macroeconomists offered a good background through which Keynes developed his economic findings.

Keynes in reaction to the classical approaches towards economic depressions and recessions was motivated by the apparent failure of the classical arguments. Various aspects of the classical economists especially during recession and depression showed that nothing would restore the economy back to the path of growth (Keynes).

For instance, Keynes criticized the manner in which classical macroeconomists presented their views about velocity of money and other economic aspects of depression and recession. According to Keynes, government was an important player in the process of correcting economic depression and recessionary pressures.

Certain economic declines during depression and recession such as continuous unemployment could only be hastened towards recovery through government intervention. Keynes identified various aspects necessary for the increased employment.

To start with, Keynes argued that production level had a direct relationship with output. Secondly, he argued that planned expenditure level for businesses in the economy affects the production level (Keynes). Additionally, Keynes argued that employment in the economy is dependent on the level of expenditure.

From the background of expenditures and taxation level, it is evident that the federal government can greatly influence the rate at which the economy moves from recession and depression. The federal government can undertake discretionary fiscal policies with the aim of applying government spending and taxation to salvage the economy from recession (Hemming et al., 2002).

Indeed, a change in government is not always associated with corresponding change in the fiscal policies. However, the application of discretionary fiscal policy by the federal government during depression and recession often results to expansionary condition.

The motivating factors for businesses and households are normally selfish. Therefore, it is impractical to expect households and businesses to undertake actions for social benefit without corresponding gain (DeLong et al.).

Consequently, firms and households do not swim against the tide during recession by investing more and increasing consumption respectively. Instead, there are massive increases in saving level by households and less spending as well as reduced investment by firms.

When the federal government undertakes fiscal expansionary policies, people are upbeat about positive outcomes in the future such as job security, increased profits and sales as well as pay rises. As always, firms and households also swim with the tide thus stimulating economic growth towards full employment.

The functioning of expansionary fiscal policy by the federal government is associated with three main economic functions (DeLong et al.). The first important factor to be considered for the expansionary fiscal policy is Aggregate demand. Normally, fluctuation in investment, spending and net exports affects aggregate demand.

Owing to the power of the multiplier effect, the changes in income, employment and output become higher than the initial adjustment. The main objective of applying expansionary fiscal policy is to affect the aggregate demand curve by shifting it as well as increasing the level of equilibrium and eventually the GDP (Hemming et al.).

Additionally, the federal government needs to first establish the desired level of national income before deciding on the extent of fiscal policy to undertake. Therefore, the recessionary gap is bridged through expansionary fiscal policies aimed at attaining full employment.

Expansionary Monetary Policy by the Federal government

Whereas fiscal policies are undertaken by the Congress and the White House, monetary policies are undertaken by Federal Reserve. The Federal Reserve often undertakes changes in the supply of money in the economy. In fact, the Federal Reserve often undertakes various measures aimed at restoring the economy in recession to normalcy or better performance.

Various changes in monetary policy such as the federal bank rate can have profound implications on the economy (Federal Reserve Bank). Federal funds rate has serious impacts on the market interest rates on various financial commodities such as auto loans, mortgage as well as bond rates.

Periods of economic recession require expansionary monetary policies to be adopted by the Federal Reserve. Therefore, there is a lowering of the Federal funds rate leading to various economic incentives to the firms. Consequently, firms are motivated to hire more workers coupled with increased investment. On the other hand, there is a general increase in the level of consumption by the households.

Various measures are often adopted by the Federal Reserve in creating expansionary monetary policy. For instance, the Federal Reserve has a responsibility of increasing or decreasing the reserve ratio. The Federal Reserve usually determines total amount of money to be held by financial institutions (Keynes). During expansionary policy, the reserve ratio is reduced.

This creates credit due to availability of excess reserve by banks. At the same time the level of money supply is determined by interest rates charged. Household spending also increases due to the increased money supply as well as aggregate demand. The availability of credit encourages investment thus increase in GDP as well as employment.

Expansionary monetary policy can also be undertaken though the increase in discount rate for the Federal bonds as well as open market operations. By increasing the discount rate, the Federal Reserve encourages bondholders to sell (Federal Reserve Bank). Consequently, there is an increase in money supply. Furthermore, the Federal Reserve can buy back the available government bonds and securities from the public.

These two expansionary policies are aimed at increasing money supply in the economy. Money supply increases aggregate demand level as spending by households increases while investment by firms increases too. There is an increase in employment level through the multiplier effect leading to increase in GDP.

The Federal Reserve is always an important player in the economy. It is no wonder that the actions of the Federal Reserve are monitored closely by economists, businesses, politicians as well as households with keen interest (Keynes).

The action of the Federal Reserve in increasing money supply affects both households and firms. Thus firms have extra money to undertake further investment while households have extra money to spend. These situations are important for economic growth through increased employment and aggregate demand. The outcome of these situations is a growth in GDP of the nation.

From the foregoing, it is evident that interplay of expansionary fiscal policy and expansionary monetary policy has immense positive impact on the economy. Whereas fiscal policies are undertaken by the Congress and the White House, monetary policies are executed by the Federal Reserve and have an objective of increasing money supply during recession.

The main focus of expansionary policies in an economy during recession is an increase in aggregate demand and employment level eventually stimulating economic growth in terms of GDP. Indeed, carefully developed monetary and fiscal policies can ultimately salvage an economy in depression and recession.

Economic development in GCC Region

The Gulf Co-operation Council (GCC) region has experienced profound social and demographic changes in the past few decades. Indeed, the trend is set to continue for the next decade or so. Consequently, serious questions on various issues such as immigration policies, labor, adequacy of public services and infrastructure as well as the role of women have been raised.

The GCC is increasingly becoming a region of utmost economic significance globally. This trend is undoubtedly envisaged to continue since the regions collaborates equitably with other markets based on investment trade and other economic activities.

Indeed, the 21st century has become a period of advanced economic growth and development in the GCC region. The period has seen enormous infrastructure expansion coupled with economic development of the region.

The 21st century has witnessed massive construction of major skyscrapers in the region. For instance, the Burj Tower in Dubai became the World’s tallest building in 2007 at a height of 800m. The economic boom in the region has been associated with numerous factors. Firstly, the region has massive accumulation of private and public sector capital which is readily availed by high revenues from natural gas and oil (Duke).

Similarly, the GCC region has continued to become a haven of peace and stability hence the creation of an environment favorable for business. Therefore, infrastructure projects worth billions of dollars have come up. The region has seen creation of natural islands such as Palm Jebel Ali.

Moreover, the immense wealth and peace has attracted people and firms from all corners of the world. Consequently, demand for various infrastructure and services such as banking, office, housing, entertainment and other amenities has led to further explosion of economic development in the region.

Economic development refers to the advancement of all aspects of an economy in a progressively sustainable manner. Therefore, economic development leads to wholesome growth of all sectors of an economy leading to lasting positive consequences. This is exactly the experience in the GCC region at the moment. The economic development of the region has made it a focal point of the global economy (Habibi).

Details of the extent of economic development of the GCC region reveal an increasing dependence of various global economies on the GCC region. In particular, the GCC region has established a strong partnership with China and India. China and India are very important strategic customers for GCC region’s oil. On the other hand, GCC region is a reliable supplier of oil to meet the needs of China and India.

Recent statistics reveal China and India were the largest trade partners to UAE in 2011. Furthermore, increasing trade volumes are being registered between the Arabian Peninsula Monarchies with India and China.

Academics have tried to debate on the role of exports towards the attainment of economic development in a region. The GCC region has not been exhaustively discussed in terms of its economic development brought about by massive endowment with oil and other natural resources (Harb). Studies have established that a strong link exists between trade and economic growth and development.

The GCC region has been able to cheat the Dutch disease often associated with massive export of natural resources. Therefore, the region is experiencing massive industrialization due to the existence of appropriate mechanisms to compensate the absence of labor.

Indeed, the GCC economy has been developing tremendously due to the availability of all the factors of production. Therefore, the region’s balance of payments has not deteriorated in any away. The outcome is a progressively developing economy.

Eurocurrency market

A Eurocurrency deposit is a deposit with a bank in the currency of a country which is not the country in which the bank is located, e.g. the deposit of sterling pounds with a bank in USA or a deposit of US dollars with a bank in UK. Most banks deposits of currency outside the country of the currency’s origin are in US dollars and so the term “eurodollars” is occasionally used to describe all euro-currencies.

The euro-currency market describes the depositing and lending of euro-currencies. In other words, the euro-currency markets are international money markets in which; banks obtain deposits of foreign currencies and re-lend them, often to other banks; or banks borrow euro-currencies from other banks and then re-lend them.

Euro-zone Monetary Performance

Euro-zone Monetary Performance

International capital markets

Larger companies may arrange borrowing facilities from their bank, in the form of bank loans or bank overdrafts. Instead, however, they might prefer to borrow from private investors by issuing Eurobonds.

Eurobond refers to a bond issued in a capital market denominated in a currency which often differs from that of the country of issue and sold internationally. Eurobonds are therefore, long-term loans raised by international companies or other institutions in several countries at the same time.

The interest rate on a eurobond issue may be fixed or variable (floating rate bonds). Many variable rate issues have a minimum interest rate which the bondholders are guaranteed, even if market rates fall even lower. These bonds therefore, convert to a fixed rate when market rates fall to the minimum interest rate.

An investor subscribing to a bond issue will be concerned about; Security where the borrower should be of high quality. Marketability, where investors wish to have a ready market in which bonds can be bought and sold. The return on the investment as indicated by the coupon interest rates.

Types of eurocurrency loans

The types of eurocurrency loans available are:

Fixed Interest loans, which is usually a medium term loan of up to 5 years. The borrower knows in advance what his interest payments will be.

Roll over (variable interest rates) loans. These are loans whereby the bank agrees to provide finance to the borrower for a given period but the interest rate on the loan is subject to renegotiation at pre-arranged intervals of every 3 or 6 months.

Stand by credit: This is an overdraft facility offered by a bank to its customers in a eurocurrency. The bank charges an agreed interest rate together with a commitment fee of about 1% for funds made available to the customer under the credit, but which he then fails to draw.

Syndicated credit, which are large Eurocurrency loans put together for a single customer by a syndicate of banks, usually for a longer term than the Eurocurrency loans.

The customer approaches a bank for a loan and if the bank is unable or unwilling to provide all the loan itself, it can arrange, by means of a placement memorandum, for a number of other banks to contribute to the loan as a member of a syndicate. The bank which sets up the syndicate is known as the managing bank

Euro commercial paper (or euro notes): This is a short-term financial instrument; Issued in the form of unsecured promissory notes with a fixed maturity of up to one year, Issued in bearer form, Issued on a discount basis (so the rate of interest) on the commercial paper is implicit in its sales value). The eurocommercial paper is denominated in any currency – usually a hand currency.

Factors to consider when choosing between euromarkets or domestic markets

The currency that the borrower wants to obtain is one of the considered factors. Multinational companies usually want to borrow in foreign currency to reduce their foreign exchange exposure and therefore borrow in euromarkets rather than the domestic market. There is often a small difference in interest rate between eurocurrency and domestic markets.

On large borrowings, however, even a small difference in interest rate result in a large difference in the total interest charged on the loan. It may be possible to raise money on the euromarket more quickly than in the domestic markets.

Also security is involved, where Euromarket loans are usually unsecured, whereas domestic market loans are more commonly secured. Large borrowers may therefore prefer euromarkets. Finally, the size of the loans; It is often easier for a large multinational to raise very large sums on the Euromarkets than in a domestic financial market.

Exchange Rate Arrangements, 2008—2012

(Percent of IMF members as of April 30 each year)

Exchange Rate Arrangements, 2008—2012

Major economic powerhouses are expected to continue controlling the market in the year 2013. However, credit Suisse anticipates that most policy makers from emerging markets, especially those dealing with fix exchange rates at times applies inappropriate measures. Variuos reports on currency anticipate the same inappropriate measures within various markets.

However, nature of competitive strategy applied enables adequate realization of stated company objectives. Porter tries to justify this point by embarking on the potential theoretical concepts associated with how a firm would achieve its competitive position in its industry or marketplace.

As long as competitive advantage is a primary consideration, there is a relevant truth pertaining to the ultimate capacity of competitive strategies to help an organization realize its prevailing plans and objectives, as it could be either defensive or offensive actions that could ensure defendable position in the industry (Porter 34).

The existence of competitive strategies is common everywhere today because of the tough competition, particularly in the realm of business.

Strategic entrepreneurship is one detailed subject in this area, where strategic management perspectives are present in order to pursue sound and excellent entrepreneurship for an existing firm’s competitive advantage, the very reason why many studies surfaces in order to understand why other firms generated successful performance and others do not (Rezaian and Naeiji 3).

Strategic entrepreneurship is a common theme especially in the age of global economy, by which the organizations have the chance to explore a vast stretch of market area. Competition has become so tough, but one has to find way out by securing a move towards strategic entrepreneurship hence achieving competitive advantage.

This is relevant to some existing companies at present where they initiated global strategic alliance for instance in order to define more critical point of doing entrepreneurship that would make a difference in their industry or specific market niche.

They have strong orientation towards competitive advantage and wealth creation (Rezaian and Naeiji 4). Concerning this point, innovation in entrepreneurship has therefore become a new existing area for exploration in the field of strategic management (Oliver 7).

The bottom line of some firms’ ultimate move for competitive strategies is to increase their market share, which in general is an essential indicative factor of the achievement of competitive advantage.

Competitive strategies for the achievement of competitive advantage have long been an essential topic in the business world, because when investors and stakeholders employ them they would have the opportunity to possess a strong hold in the market, particularly when they generate their competitive edge, create wealth, initiate product leadership and achieve financial and economic return (Luke, Kearins and Verreynne 314).

They would have the chance to initiate intense force that at some point would try to create a remarkable impact on their prevailing competitors, rival firms and the new market entrants. It is for this reason that studying competitive strategies and competitive advantage and integrating them into the concept of strategic entrepreneurship has triggered substantial attention.

Many studies have already set for further explorations regarding this concern (Rezaian and Naeiji 3). These studies have promoted us with some essential suggestions at the entrepreneurial level.

A vast red ocean has become widely explored based on Porter’s relevant basis of formulation of competitive strategies, for outperforming competitors (Porter 34). As many key players try to take part of the competition in an industry, there is a high inclusion of competitive strategies (van Rensburg 15). Innovation for instance has become the major key indicator of formulating competitive advantage (Oliver 7).

For instance, the highly differentiated offerings are positive indications of a marketplace with major key players who are after of creating a significant market share. This happens in many industries where their ultimate goal is to add substantial value for their customers and the target potential market.

In the same way, the existence of strategic entrepreneurship is a way used by investors and stakeholders in order to promote more value for their product or service offerings, as they continue to pursue to achieve remarkable differentiation and gain customers’ loyalty and trust. The result would be the creation of potential value for their target markets as they continue to provide them with their product or service offerings.

This study seeks to create a meaningful connection between strategic entrepreneurship and the creation of competitive advantage in the midst of a dynamic environment where competitors are trying to move ahead. Their ultimate goal is to create meaningful value for the society.

However, the creation of such value is a remarkable area of investigation particularly if there is a strong connection that would link it to a firm that has generated competitive advantage.

This is a major point that would require substantial investigation especially in today’s time when firms have to face the truth that competitive strategies at the entrepreneurial level would have the potential to bring them forward to competitive advantage or not, an essential field of study requiring addition of fundamental empirical evidence.

Financial Capital

Financial capital is the ultimate need prior to establishing a successful move forward to entrepreneurship within global market (Kariv 203). Every firm has individual needs when it comes to financial concerns. Financial capital could indicate the level of growth that a firm should initiate because at the bottom line every business requires to have it enough to start.

Without sufficient financial capital, it is hard to promote a successful business that would last and ensure its competitive advantage. For instance, it is hard for every firm to expand without the need to consider financial concerns. In fact, many firms are willing to go for expansion, but the bottom line is that they are not able to do so right away because of the associated cost of such activity.

They would only look forward to invest if they would be able to see remarkable opportunity that they think would bring them to a competitive edge. For this reason, financial capital is strongly associated with other relevant concerns in the making of value.

In the case of companies trying to promote differentiation strategy for their competitive advantage, financial capital is at the forefront of their plan. Financial capital would help them sustain their business above any other considerations. For this matter, many firms try to first enhance their financial capability.

In fact, one of their ultimate goals is to incur substantial revenue in order to acquire remarkable profit that would allow them to sustain their business in the end and become a cut above the other.

There is therefore an implication that the creation of value has corresponding relevant connection to the financial capital of a certain firm. This therefore calls for a relevant move for every firm to initiate relevant strategies that would make them a cut above the other in terms of their financial concerns.

Social capital is another consideration in order to create value and formulate successful competitive advantage (Bartkus and Davis 205). This requirement is a relevant component for the emancipation of relevant message and information linked up with a certain product or service offerings.

This requirement allows every firm to establish the appropriate channel in order to promote a relevant social network that would help establish the creation of its name together with its product and service offerings. Social capital is a necessary requirement because many firms need to establish identify for their entire business.

The establishment of their name alone is a remarkable competitive advantage because this could generate potential benefits. For instance, the creation of brand has proven to be effective especially in ensuring a remarkable market share. There is value associated with the brand name in the first place (Porter 85).

It could be intrinsic value, but the bottom line is that one could transform it into a monetary value. This is the reason why social capital is necessary because there is a need for creating a channel that will socially enhance the firm’ created product and service offerings.

Another important requirement is the human capital. For many years, the human resource has become a substantial consideration particularly in the creation of certain product or service offerings. The human resources are the ones to perform the plans and ensure that they have executed it well for the creation of value.

In an organization, the human resource is the best asset because the fulfillment of organizational plans lies on their ability to implement or execute the moves for the achievement of goals. This is due to the point that human capital tries to define the link between HR practices and business performance (Armstrong 81).

Resource orchestration

Based on the above discussion of the required resources in order to ensure competitive advantage, resource orchestration is a fundamental move that would eventually process all resources accordingly in order for the firm to produce certain output that is heading forward to differentiation applied in its prevailing product and service offerings.

This company tries to invest in its technology and from time to time produces new potential offerings primarily to those potential customers.

Apple changes the face of mobile phones and invents the latest development for smartphones. Smartphones come in different variants, but Apple creates a design that is unique and highly differentiated from other prevailing offerings coming from the production of other key players in the industry.

Concerning this potential move, Apple is able to promote a specific name for its brand, which has a remarkable competitive advantage in its industry. It allows the firm together with its brand to achieve high recognition from its potential customers and target market niche across the global marketplace.

The global strategic alliance between General Motors and Peugeot is another relevant proof that firms continue to engage in strategic entrepreneurship. There are remarkable reasons why GM and Peugeot together have determined to go into a global strategic alliance. In the prevailing trending in the car manufacturing industry, the economic factors have strong influence on the returns every car manufacturer produces.

This has evidently pulled the trigger and allowed the two firms to look for other sustainable strategies that would lead them a cut above the other car manufacturers. For this reason, GM and Peugeot, with primarily the same intention, agreed to initiate actual global strategic alliance, which is the first in their industry.

GM, renowned in its market in the US and in the other parts of the world, continues to face a remarkable challenge when it comes to the amount of profits and revenue it produces.

Firms engaging in strategic entrepreneurship

Various firms try to engage in strategic entrepreneurship. In this section, we would be able to take a closer look in each of their individual case. Many firms try to engage in strategic entrepreneurship. This is evident in the case of Apple Incorporated by which their ultimate goal is to provide highly differentiated product and service offerings that could ultimately stand as a cut above the other (Apple Incorporated).

In many cases, Apple Incorporated became a trendsetter and recognized as such, because its innovative products proliferate in its industry and have become the leading sources of modeling opportunity for a vast stretch of opportunity for customer acceptance.

Apple Incorporated primarily employs one of Porter’s generic competitive strategies and that is its combined focus the same way, Peugeot builds up a substantial reputation in the European market.

With their current strategic move, here are some important strategic advantages they might have eventually obtained, considering the point that each of these firms have created potential market share across vast geographic considerations, combining their potential would eventually extend their total coverage together, increasing their opportunity to cover and explore a huge market together.

In addition to that, GM and Peugeot would be able to save on associated cost when it comes to production due to the following reasons (BNP Media; BBC News).

Combining the available resources of GM and Peugeot would also mean expansion of their coverage to look for available raw materials. This would eventually allow them to have potential strong market power because one could consider them a huge and giant firm as user of raw materials.

They have strong demand, which would allow various sources to consider them as significant priority. This would also increase the chance for GM and Peugeot to save cost because they have a strong market power to suggest a certain price for raw materials. This would even allow them to combine their various sources of raw materials, leading them to have various options.

The two firms’ global strategic alliance is not only about integrating their resources. It is also about trying to combine their technology and implement researches and studies together to ensure more improve quality and design of their product offerings. The bottom line of this move is to establish a certain value for the two firms to experience a competitive advantage.

This means that the two firms, by combining their capacities in the car manufacturing activity are trying to promote the idea that they would want to produce high quality for product offerings. Another essential point why GM and Peugeot agreed for global strategic alliance is for them to be able to experience lower cost in the actual production and distribution of their product offerings.

With their new prevailing system for production, GM and Peugeot would be able to experience substantial reduction of cost along the value chain.

This means that these two firms are also employing overall cost leadership, by which the bottom line is for them to take control of a highly competitive product price without compromising the level of revenue and eventually profit.

The essential moves of GM and Peugeot are certain that they aim to achieve competitive advantage, by being able to create substantial moves that will lead them to provide high value for their target market and customers.

McDonald’s is an international food chain that has thousands of outlets across the globe. This company provides product offerings that are based on what the customers exactly want and need. This means that they provide products that at some point may have considerable diversification because they also tries to establish the point of catering the prevailing cultural need when it come to foods across their vast marketplace.

For instance, McDonald’s in India does not serve beef even if in its other outlets outside the country it has become its primarily fast-moving product offering. This means that the firm eventually tries to seek the opportunity to cater the worldwide market by trying to act in a local context (McDonald’s).

It cannot undergo a certain move to centralize its production of offerings because there are many factors to consider beforehand. These include culture and other relevant heritage associated with the existence of a prevailing civilization or society particularly in the mobile communication gadgets (Apple Incorporated).

This at some point could be its temporary competitive advantage as other firms are trying to emulate and even create much better design in the future. Apple therefore has been setting the trend, but its competitors are also doing relevant move for them to earn relevant market share and dominate in the marketplace.

The case of GM and Peugeot is new in the car manufacturing industry. However, there is one bottom line of their linked up move to finally take the plunge into the global strategic alliance and that is to obtain a remarkable competitive advantage (BNP Media; BBC News). These two firms are trying to initiate a move that is the first in their industry.

This means that they are trying to perform what is unique and as they head towards trying to become sustainable when it comes to their operation and other relevant matters. However, it is clear that these two firms are trying to promote sustainable competitive advantage.

Nevertheless, based on Oliver’s idea, it is hard for them to achieve sustainability with their competitive advantage because there are many firms today that could actually emulate their recent strategic move.

For this reason, Oliver has become the ultimate proponent of the idea that there is only temporary competitive advantage, a term that specifically holds true when it comes to the recent level of competitive advantage of a certain firm.

For Oliver, the associated corporate learning in line with the relevant competitive advantage could be the ultimate advantage of GM and Peugeot in their industry because these two firms would try to combine their effort in learning things just for them to come up with highly innovative product offerings in the market.

Firms could implement strategic entrepreneurship leading them to establish competitive advantage. At this point, let us take a closer look once again how some companies we mentioned in the previous discourse have established competitive advantage.

Incorporated Cases

Apple engages in strategic entrepreneurship and as a result, it earned the opportunity to establish its competitive advantage. What is the ultimate competitive advantage of Apple Incorporated may be its potential learning that has its application primarily on the production of highly innovative and differentiated product offerings and customer service (Apple Incorporated).

The firm tries to invest deeply in the creation of new technology because it has the belief that the introduction of something new into the market will pave the way for its remarkable strength in the marketplace.

This according to Porter is a significant move that will have to help initiate competitive forces in an industry. For as long as Apple continues to display its vibrant dominance in the ongoing competition in its industry, we could always have a clear word concerning its business that it has successfully established its competitive advantage at some point.

This does not mean this is going to be forever, because according to recently discussed concept, competitive advantage may not be entirely sustainable because of the ongoing innovation and other relevant strategic moves that every competition firm tries to initiate.

This therefore means that the trending Apple showcases today may not necessarily be the same trend in the future because of the other relevant moves of differentiation and innovation initiated by the other potential key players and new market entrants in the marketplace.

Apple today has remarkably gained its competitive advantage aside from its leading vibrant ideas, but through this output, this firm is able to set the trending in technology. Players in the same industry are its brand name. This brand is unique, and one of its kind.

However, its strategic moves may not be that unique at all knowing the fact that there are many key players trying to imitate what it has already started.

Aside from the fact that this firm establishes its name in the international context, it is also able to promote the idea of trying to serve its target customers with the product they deserve under the local context. For this reason, this firm has the chance to serve its customers with the appropriate product service offerings that they need and deserve to acquire.

Successful firms have various stories to tell, but one essential message they could provide us concerns the information on how they have made it to the top today. They may have started out from a very humble inception, but the result might be stunning as they might be the top key players now in their respective industries or chosen market niche.

Some of these firms employed strategic management moves. Strategic entrepreneurship could not be too far from these, as there are various firms trying to establish themselves at present with the aid of various strategies pertaining how they could sustain their entrepreneurial activities.

The presence of competitive strategies is an indication that there are elemental moves that are trying to provide opportunity for those companies that are employing strategic management activities.

Known to be one of the right courses of actions that would make the firm able to implement activities leading to the emancipation of corporate strategies and achievement of competitive advantage, strategic management has become the ultimate way to carry out new business opportunities. There are diversified activities in line with strategic management and one of them is strategic entrepreneurship.

Entrepreneurs use strategies in order to obtain the linked up goals relevant to the firm’s growth and expected accomplishments. For this reason, they have the chance to explore in the field of strategic entrepreneurship.

The area of strategic entrepreneurship just like in any field requires exploration and meaningful understanding. There are many things to learn from it and the point whether it would bring competitive advantage to an existing firm that is adapting it requires substantial investigation for that matter.

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IvyPanda. (2019, August 6). Economic Policies in The Global Economy. Retrieved from https://ivypanda.com/essays/economic-policies/

Work Cited

"Economic Policies in The Global Economy." IvyPanda, 6 Aug. 2019, ivypanda.com/essays/economic-policies/.

1. IvyPanda. "Economic Policies in The Global Economy." August 6, 2019. https://ivypanda.com/essays/economic-policies/.


Bibliography


IvyPanda. "Economic Policies in The Global Economy." August 6, 2019. https://ivypanda.com/essays/economic-policies/.

References

IvyPanda. 2019. "Economic Policies in The Global Economy." August 6, 2019. https://ivypanda.com/essays/economic-policies/.

References

IvyPanda. (2019) 'Economic Policies in The Global Economy'. 6 August.

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