Global Management: Succeeding in a Foreign Market Essay

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Culture

Direct management of people native to a country by foreigners is never advisable. Besides language and cultural problems, a foreigner is not likely to be aware of local issues. Plenert (1990) has used his experiences with implementing a new technology in Mexico to come up with certain rules when working in foreign countries. According to him, when designing a system, always listen to what the users have to say because they have to actually use it. So if as a foreigner, I am to successfully manage the native people, I will have to collaborate with local people. I could hold series of meetings and find out the system which works in the country before formulation any management plan or schedule. I will also have to guard against forming judgments about people based on my own cultural background and try and understand the local culture so that I can groom the employees and help them grow (Gardenswartz &Rowe, 2001).

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When it comes to business dealings, it is important to remember that you cannot push the US standards on other countries. What works in the US may be a big failure in other countries. Plenert’s follow-up article in 1994, showed how the Mexico firm showed great improvement once it was taken over by local managers and the US system, insisted upon by the US top management, was abandoned. So when dealing with local institutions, I am more like to be successful if I took help of local managers and listened to them rather than trying to enforce American business standards.

Foreigners often do not have the same sense of time that Americans do and tend to be lax about deadlines (Gardenswartz &Rowe, 2001). So if want them to cooperate, I will have to be patient and let them do things there way. It will also help to remember Plenert’s (1990) suggestion that when in disagreement, the people who “live with the system” are generally right. So in a foreign country, with little knowledge of the culture, the best way to succeed is to listen to the locals, because they know what they are doing.

Multinational and Global Industries

A multinational or local firm is one in which the product offering is fully customized for each country and the firm competes on a local level rather than on the international level. Such firms may have different market shares in different markets. A global firm on the other hand is one which offers standardized products worldwide and their competitive moves are integrated across all countries (Yip, 1989). Certain industries perform better with a global approach to internationalization while other industries are more suited for the multinational model. When customers in different countries need essentially the same product, the standardized global strategy can be successful. While increasingly, most industries are going global, there are many industries which still perform better as a multinational.

One industry which is more multinational than global is the consumer products industry. Consumer products such as soaps, shampoos etc have to be customized according to the local needs, especially the packaging, marketing and brand names. If a consumer products company uses the standardized marketing, it can fail to connect with people. For example, Proctor and Gamble, learned the hard way that they could not use in Japan the same marketing strategy they were using in the US for their laundry detergent, Cheers, since Japanese consumers had different needs (Yip, 1989). So in order to be successful, consumer products firms need to have a local outlook.

On the other hand, the civil aircraft industry is a very global industry since customers across the world have similar needs. The two main competitors in this industry, Boeing and Airbus, compete across countries and offer standardized aircrafts worldwide. Although they are global brands, their production activities are limited to one country. These factors make civil aircraft industry a global industry.

New Competitive Landscape

Technological revolution and globalization has resulted in a new competitive landscape (NCL) characterized by hyper-competition, extreme emphasis on price, quality and customer satisfaction and a focus on innovation (Hitt, Keats & DeMarrie, 1998). As a result of globalization, the beer industry is facing increased competition. While earlier, beer was a manufactured locally and tended to have local loyalties, increasingly there is a convergence in consumer choice. It is also now easier to transport beer over long distances safely. This is leading to consolidation and industry observers feel that soon a few global brands will emerge and the local brands will be consumed by globalization (Thompson & Strickland, 2003). Based on this we can say that the beer industry is affected NCL. However, the beer industry is still not competing with other industries and even though the competition has grown fiercer, it is still predictable. So the affect of NCL on the beer industry is still limited.

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The Computer industry is affected by the NCL since it is now facing competition even from the cell phone industry. However, consolidation within the industry has already taken place and the competition from other industries is predictable. Also the industry is a comparatively new one and grew with the NCL. So even though it is affected by the NCL, he industry is in a much better position to handle it.

Reference

Gardenswartz, L & Rowe, A. (2001, March). Cross-cultural awareness. HR Magazine, 139-142.

Hitt, A.A., Keats, B.W. & DeMarrie, S.M. (1998). Navigating in the new competitive landscape: building strategic flexibility and competitive advantage in the 21st century. Academy of Management Executive, 12(4), 22-42.

Plenert, G. (1990). Developing a production system in Mexico. Interfaces, 20(3), 14-23.

Plenert, G. (1994). TREMEC Revisited: An update on “developing a production system in Mexico. Interfaces, 24(6), 107-109.

Sprague, C. & Klein, S. (2003). Strategic management. (Thompson, A.A. Jr. & Strickland, A.J. III, Eds.). New York. McGraw-Hill.

Yip, G.S. (1989). Global Strategy… In a world of nations? MIT Sloan Management Review, 31(1), 29-41.

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IvyPanda. (2022) 'Global Management: Succeeding in a Foreign Market'. 16 May.

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IvyPanda. 2022. "Global Management: Succeeding in a Foreign Market." May 16, 2022. https://ivypanda.com/essays/ncl-international-management/.

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