Lecture 4.ppt - SESSION FIVE CRAFTING A GLOBAL STRATEGY Lecture 4 Introduction A global strategy is aimed at meeting a global challenge because without

Lecture 4.ppt - SESSION FIVE CRAFTING A GLOBAL STRATEGY...

This preview shows page 1 - 7 out of 42 pages.

SESSION FIVE CRAFTING A GLOBAL STRATEGY Lecture 4
Image of page 1

Subscribe to view the full document.

Introduction A global strategy is aimed at meeting a global challenge because without it, survival or success in the global business environment may be difficult. Effective response to environmental challenges depends on the firm’s capability i.e. its strengths and weaknesses. It is important to match the firm’s capability with the global business environment. The matching occurs when the firm capitalizes on its strengths while ignoring its weaknesses in order to exploit opportunities and deal with threats in its global business environment.
Image of page 2
The matching is done through strategy i.e the firm should develop a global strategy which takes into account its strengths and weaknesses to exploit opportunities and deal with threats in its global business environment. A global strategy involves the carefully crafted single strategy for the entire network of subsidiaries and partners, encompassing many countries simultaneously and leveraging synergies across many countries. This is in contrast to international strategy, which involves a wide variety of business strategies across countries, and a high level of adaptation to the local business environment.
Image of page 3

Subscribe to view the full document.

Moving from a domestic or international strategy is not an easy process; it has various strategic challenges. The challenge is to develop one single strategy that can be applied throughout the world while at the same time maintaining the flexibility to adapt that strategy to the local business environment when necessary. What is the real difference between international strategy and global strategy?
Image of page 4
There are three main differences and these relate to the degree of involvement and coordination, the degree of product standardization and responsiveness to local business environment, and the nature of strategy and competitive moves. International strategy does not require strong coordination from the centre; global strategy requires significant coordination between the activities of the centre and those of subsidiaries. International strategy assumes that the subsidiary should respond to the local business needs unless there is a good reason for not doing so; global strategy assumes that the centre should standardize its operations and products in all the different countries, unless there is a compelling reason for not doing so.
Image of page 5

Subscribe to view the full document.

International strategy gives the subsidiaries the independence to plan and execute competitive moves independently; global strategy plans and executes competitive battles on a global scale. Implicit in the three differences above are the three major dimensions of a global strategy. Standardization dimension ( How much does a firm standardize its offerings across countries?) Global strategy is the process of exploiting the synergies that exist across different countries, as well as the comparative advantages offered by different countries.
Image of page 6
Image of page 7
  • Fall '17

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes