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Global Strategy and Its Role for Organization Essay

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Updated: Jun 5th, 2020

Global strategy is a term that encompasses three areas, which are global, multinational and international strategies (Bartlett & Sumantra, 2009). In global strategy, we find that the organization treats the world as one market with one source of supply that has little local variation. In multinational strategy, the organization is usually concerned with the markets past that of its home country. In international strategy, we find that the objective of the organization will majorly relate to that of its home market. These three strategies are designed to enable an organization archive its objective of broadening its international base. Usually a good global strategy has to look into certain considerations. One of the considerations is the extent of their market presence in relation to the current market, secondly is how they should build the required global presence, thirdly is to consider the optimal location around the world for the various value chain activities and fourthly is how they can turn global presence into a more competitive advantage.

Various organization uses different global strategies. Some of the strategies are reactive and past focused while others are creative, proactive and future oriented. This will lead to some organization benefiting from globalization due to the comparative advantage in the technique used (Bartlett & Sumantra, 2009). Therefore, we will look at some of reactive and past focused globalization strategies and see how we can convert them to creative, proactive and future oriented global strategy that will aid organization in their thinking as well as to compete favorably in the global market.

One of the global strategies used by many organizations that are proactive and past focused is trading with a small number of countries. This is as a result of the following reasons: poor management, poor relation with other countries, lack of sufficient capital or even poor marketing skills used by the organization (Bartlett & Sumantra, 2009). As a result, the organization will have a small global market for their product and the income that will accrue will be little. So for an organization like this, the best measure to take is to compete everywhere for it to have a presence in relation to other organization and this can be done through improving their management, creating good relation with different countries, and even improve their marketing skills. This will automatically lead to a larger market and hence increase in the income earned by the organization. The organization will now stand a chance to compete favorably in the global market.

Secondly, another global strategy used by many organizations that are reactive and post focused is the use of local resources, which include things like raw material and labor that may be substandard, or of poor quality to produce goods and services. This will automatically lead to the organization producing substandard goods, and as a result, they occupy a smaller market share in the global market with few incomes generated. Organizations facing such problem should exploit other countries resource i.e. hire skilled labor from another country or they can use high quality raw material from another country so as to produce standard goods that can compete favorably in the global market (Bartlett & Sumantra, 2009). This will lead to the organization getting a large global market share and be able to compete favorably with other organization as well as get high profits.

Thirdly, another global strategy used by many organizations that are reactive and post focused is in relation to product life cycle. Some organization will keep some of their stock in the warehouses for a long time before they are sold. This will lead to the stock cutting down on their profits hence they will not be in a position to compete favorably with other global institutions (Bartlett & Sumantra, 2009). What such organization should do in relation to the product life cycle is to sell the goods to lesser-developed countries. This in turn, will increase their market share in the global market and increase the profits of the organization contrary to what was happening before.

Fourthly, another global strategy used by many organizations that are reactive in nature and post focused is in relation to operation flexibility. Some organizations are not flexible to changes in the global market such as change in the exchange rate and cost. As a result, such organizations usually end up losing in the market, the profits decrease and lose position in the global market (Bartlett & Sumantra, 2009). What such organizations can do, is to be flexible in relation to the market changes in terms of exchange rate and cost to capture the global market, make profits and position themselves in the global market.

Fifthly, another global strategy used by many organizations that are reactive and past focused is in relation to how they strategize themselves. Organizations that are slow moving in their products and there are numerous suppliers in the market will have a low market share and it will accrue fewer profits (Bartlett & Sumantra, 2009). Such an organization needs strategize themselves so as to ensure that their product are fast moving, and that they are the only providers in the market so as to capture a larger market share and high profits.

In conclusion, we find that global strategy is majorly concerned with three areas i.e. global strategy, multinational strategy and international strategy. We also looked some of the global strategic thinking that are used by organizations which are reactive and past focused and how the organization can change such thinking into a more creative, proactive and future oriented so that they can strategically position themselves in the market.

Reference

Bartlett, A & Sumantra G, (2009), Managing Across Borders: The Transnational Solution. (3rd. edition) London. Harvard Business School Press

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