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Why Many Global Strategies Fail Despite Companies' Powerful Brands and Other Border-Crossing Advantages
The purpose of this paper is to examine the various reasons why numerous companies, armed with powerful brands and other border-crossing advantages, struggle to achieve success in their global ventures. Indeed, brands such as Walmart and Target have failed to expand their operations into the German and Canadian markets, respectively, in recent years due in large part to what Ghemawat (2018) describes as an emphasis on size-ism, which fails to appreciate the persistence of differences between countries (p. 4). Certainly, there are other factors that are involved in failed global strategies, though, that must also be taken into account including most especially a lack of due diligence to carefully evaluate the target market and its alignment with the brand. For example, Ghemawat reports that one common reason for global strategy failures is a lack of adaptation to local markets. In far too many cases, major brand frequently assume that what works well in their domestic market will be equally successful in other countries. Cultural, economic, and regulatory differences, however, require companies to customize their products, services, and strategies to suit local needs and preferences. In sum, failing to...…the right entry mode into foreign markets is crucial for success. Companies must carefully evaluate the various options, such as direct investment, partnerships, licensing, or franchising, based on the target market's characteristics and the company's capabilities. Selecting an inappropriate entry mode can lead to challenges in establishing a strong market presence and hinder future growth. By highlighting these factors, Ghemawat underscores the importance of understanding and embracing differences when formulating and executing global strategies. In the final analysis, it is reasonable to conclude that major brands that recognize and navigate these challenges have a better chance of achieving sustainable success across…
References
Ghemawat, P. (2018). Redefining Global Strategy. Harvard Business Review Press.
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