Contemporary Issues In Business And Management Essay

Contemporary Issues In Business And Management - Essay Example A global industry can be described as an industry where all firms are competing within the global market in order to sustain and grow. A global strategy is driven by various factors. These can be cost drivers, competitive drivers, customer drivers and government drivers (Sakarya, Eckman and Hyllegard, 2006). We live in a global economy where the time required to cross continents has reduced to a bare minimum. With the help of advantage technologies, it is now possible to initiate conversations within no time. Because of these changes, there has been a shift in the business practices of organisations and more and more organisations are adopting a global strategy for growth and sustainable development (Aharoni and Ramamurti, 2011). A global strategy is the plan of an organisation to compete in these new realities of global markets. For example, in food manufacturing, organisations like Nestle, Cadbury and Kellogg’s have created marketing networks and global distribution based on marketing of their leading brands that are well recognised globally. Key aspects of a global strategy include: The global market should be treated as the domestic market. Establishment of a global marketing mix, differentiating between the national and regional differences such as language, culture and taste. Creating a global distribution and production system, for example establishing factories globally manufacturing goods for respective local regions (Vrontis, Thrassou, and Lamprianou, 2009). Concentrating on the most successful and most recognised products and brands. Since the global market is huge, a substantial amount of profit can be achieved by using economies of scale in terms of production, distribution and marketing. Rather than producing a large number of products, it will be more fruitful to manufacture those products and services which are well recognised and accepted by the customers round the world. Importance of Global Strategy The importance of global strategy ca n be understood from the flowing perspectives: Perspective of a Company With the international expansion, opportunity increases in terms of new sales and higher revenues. Sometimes, it might also happen that the profitability in the home country has reduced due to various unavoidable conditions. In such cases, revenues from the international market prove to be a saviour. At times which are turbulent, they might become the saviour in terms of profit. For example, poor growth and low profits in the domestic market in China were one of the main reasons that forced the Chinese company, TCL, to formulate a strategy with the aim of international growth and expansion. It has continued this global expansion strategy with new factories, new offices overseas and acquisitions with the aim of developing the positioning of its market particularly in the two markets for electronics goods, the European Union and the USA. Apart from opportunities such as new sales and profit expansion, global strat egies can take place because of various other reasons. Oil companies, for example, look for expansion with the objective of securing their resources, a strategy which can also be termed as resource seeking (Bellin and Pham, 2007). Industries such as clothing look for global expansion with th