Global Strategic Business Strategic Global Business Strategies

Global Strategic Business

Strategic Global Business Strategies

Globalization has become a ubiquitously used word in a relatively short time. Much of this globalization trend is centered on international economic systems becoming more intertwined which have been largely technologically driven. Technology has provided a platform in which has increased the speed of information transfer and consequently provided corporation more feasible access to foreign markets. As a result of globalization, many multi-national corporations (MNCs) have begun to drive a level of homogenization throughout the international business community. Standardizing processes and incorporating technology on a global scale creates much efficiency that can reduce redundancies in business processes. This advantage has produced enormous MNCs and the trend will continue to grow indefinitely. Four issues related to this trend were chosen from a current model of global corporate dominance and will be discussed in order to provide insights on strategies in the globalized environment (Anil, Govindarajan and Wang)

Building a Global Presence

A MNC must work to create a global presence in order to the most effective quantities of scale possible. Creating a global presence however is one of the most challenging tasks that a corporation can face. Each market has a different customer base that has unique cultural preferences. Therefore it is extremely difficult to standardize a marketing campaign so that it works all over the world. However, there are some examples of how companies have achieved this to some degree. One simple example is provided by using material that does not have language included in them.

Today, most modern logos of the largest companies contain no words, just images. This allows the brand to be promoted in different cultural regions. The same strategy can also work with some marketing materials. For example, Coca-Cola, and many others, has developed commercial material in which the actors don't say any actual words. Instead they show images of consumers enjoying their product. This way that can simply change the subtitles to use the commercials in different markets which have different languages.

Cultivating a Global Mindset

A global mindset is incredibly important for a MNCs management team to develop because it allows them to scout and share successes on a global level. Although this might seem like a fairly easy concept, it is difficult to put into practice. For example, management will often focus on the task at hand rather than putting their activities in a global context. However, if they can constantly frame their decisions in the context of the entire global operation, then this can provide many insights that can support the company.

Building a Global Knowledge Machine

Creating a global knowledge machine refers to the fact that corporations must learn to share their knowledge across borders efficiently. However, cultural preferences often make this difficult. Yet it often represents a critical success factor for global expansion. International organizations that can transfer knowledge more efficiently crossed borders are more likely to be more successful and consequently those who cannot transfer information are at a significant disadvantage in globalized markets. One study has identified that the absorptive capacity of knowledge transfer is correlated with the employees' abilities and willingness to learn in these situations (Minbaeva, Pedersen and Bjorkman). Absorptive capacity refers to the international subsidiaries ability to make use of the information that they are provided. Some foreign partners are willing and more capable to transfer knowledge than others and culture is an important factor in determining such circumstances.