Global Business Challenges in Contemporary Times Report

The challenges facing organizations dealing in global business in modern times is no less different than what traders and business communities have been experiencing from time immemorial. On the one side is customer satisfaction and on the other is competition within their peers to win the clients while all the time keeping an eye to profits. Global business started long ago when on foot, horseback and over the waves the traders took the message of one place of the world to another in the form of goods. The items from strange lands and the accompanying tales led to the conquering armies to foray forth and fill up the pages of history. It is the trading community that has led the way¹.

With the debut of the industrial revolution the movement did not basically change – it remained the same but things began to move faster covering bigger regions. This led to the technological advanced countries setting up colonies in the East. They took the raw material from these places, fed it into their mills employing their own labour and then shipped it back to the markets of the colonies. With more technological development making its debut with the computer age the world has become a smaller place and business too although retaining its basic character of making profits has changed and the environment is different².

Business tactics

Here comes in the issue of global business strategy. It is different from the national one as factors like standardization and adaptation of products comes in. Differentiation of product together with diversification is of relevance in both global and national business strategies. Competition is stiffer both nationally and internationally³. The business tactics have surfaced making the domestic firms take on an international complexion – establishing its niche because of the uniqueness of its product while making the standard common across the globe. Due to the immensity of the global market the price of each becomes cheaper thanks to the volume of trade. It is taken for granted that human needs are the same across the world with differences due to geography and climate⁴.

Automobile sector

To understand the challenges faced by modern organizations it is best to study the automobile sector in America that has fallen down flat because of opening up of the global market. The manufacturers found it cheaper to have the car produced in developing countries where raw material was plenty and labour cheap. This led to the collapse of the local automobile sector. The government has propped it up but how far that can be sustained only time can tell. China and India are emerging as serious competitors. Even if Cleveland stands up once more the workers will have to climb down from the standards they used to enjoy hitherto raising fears that America will soon become like the developing world⁵.

Energy sector

The latest challenge is coming from the energy sector. Although experts are differing over when the oil stock will finally come to an end there is no dispute that oil stock will ultimately end and hence alternative energy will have to be found. Here there is enough scope if investments are made in alternative energy. The country that finds the answers will forge ahead but that will be for a limited time because soon the rest of the world, in these days of easy communication, picks up the tricks of the trade. Thus innovation is the key to the success⁶.

Human resource

Here comes in the factor of human resources. So far it has not been given due attention. Automation has been introduced with a view to doing away with human help. Yet without the human ultimately the robot will not work. And when there is talk of energy crisis a time is fast coming when the hand pulled cart will leave behind the petrol driven vehicle half way down the road. Human resources have been and still are the greatest source of power to propel business. The manager with a vision will tap into it with aplomb and success. No machine can operate without the human hand and the brain behind it⁷.

Agriculture

Another field that is fast opening up is agriculture. A time has come when the balance has been upset – there is more land under urban living rather than rural regions. Less land will mean less food and soon this will be the new business zone buzzing with activity. Demand will shoot up as never before. It is the early bird that will get this message and win the race. The concentration will be more on locally produced organic food production.

Modern business is coming up more and more with the term ‘real economy’ – referring the land, its produce and the people as against just figures in accounts books. The latter represents the former and nothing more than that⁸. Modern business will have to change its strategy altogether with a new type of global thinking that is pushing back national barriers. It is really becoming a global village and it is those that adapt fast to this reality that success will come.

Bibliography

Hill, Charles. International business: competing in the global marketplace. Boston: McGraw-Hill/Irwin, 2003.

Levitt, Theodore. “The globalization of markets”. The McKinsey Quarterly 17, no. 2 (1984): 2-20.

Luo, Yadong, and Seung Ho Park. “Strategic alignment and performance of market-seeking MNCs in China”. Strategic Management Journal 22, no. 2 (2006): 141-155.

Selmer, Jan. “China: Organizational acculturation in foreign subsidiaries”. The International Executive 35, no. 4 (2004): 321-338.

Shaked, Alister. “Relaxing price competition through product differentiation”. Review of Economic Studies 49, no. 1 (2006): 3-13.

Vandenbosch, Mark, and Charles Weinberg. “Product and price competition in a two-dimensional vertical differentiation model”. Marketing Science 14, no. 2 (2007): 224-249.

Zeithaml, Parasuraman. “Service quality delivery through Web sites: a critical review of extant knowledge”. Journal of the Academy of Marketing Science 30, no. 4 (2004): 362-375.

Footnotes

1. Luo, Yadong, and Seung Ho Park. “Strategic alignment and performance of market-seeking MNCs in China”. Strategic Management Journal 22, no. 2 (2006): 141-155.
2. Selmer, Jan. “China: Organizational acculturation in foreign subsidiaries”. The International Executive 35, no. 4 (2004): 321-338.
3. Shaked, Alister. “Relaxing price competition through product differentiation”. Review of Economic Studies 49, no. 1 (2006): 3-13.
4. Luo, Yadong, and Seung Ho Park. “Strategic alignment and performance of market-seeking MNCs in China”. Strategic Management Journal 22, no. 2 (2006): 141-155.
5. Vandenbosch, Mark, and Charles Weinberg. “Product and price competition in a two-dimensional vertical differentiation model”. Marketing Science 14, no. 2 (2007): 224-249.
6. Zeithaml, Parasuraman. “Service quality delivery through Web sites: a critical review of extant knowledge”. Journal of the Academy of Marketing Science 30, no. 4 (2004): 362-375.
7. Hill, Charles. International business: competing in the global marketplace. Boston: McGraw-Hill/Irwin, 2003. pp. 123-124.
8. Levitt, Theodore. “The globalization of markets”. The McKinsey Quarterly 17, no. 2 (1984): 2-20.