The Global Environment
To understand the strategic planning options available to a corporation, its managers need to
recognize that different types of industry-based competition exist. Specifically, they must
identify the position of their industry along the global versus multidomestic continuum and
then consider the implications of that position for their firm.
The differences between global and multidomestic industries about the location and
coordination of functional corporate activities necessitate the differences in strategic
emphasis. As an industry becomes global, managers of firms within that industry must
increase the coordination and concentration of functional activities.
As a starting point for global expansion, the firm’s mission statement needs to be reviewed
and revised. As global operations fundamentally alter the direction and strategic capabilities
of a firm, its mission statement, if originally developed from a domestic perspective, must be
globalized. Lastly, movement of a firm toward globalization often follows a systematic
pattern of development. Commonly, businesses begin their foreign nation involvements
progressively through niche market exporting, license-contract manufacturing, franchising,
joint ventures, foreign branching, and foreign subsidiaries.
Explain the importance of a company’s decision to globalize.
Describe the four main strategic orientations of global firms.
Understand the complexity of the global environment and the control problems that
are faced by global firms.
Discuss major issues in global strategic planning, including the differences for
multinational and global firms.
Describe the market requirements and product characteristics in global competition.
Evaluate the competitive strategies for firms in foreign markets, including niche
market exporting, licensing and contract manufacturing, franchising, joint ventures,
foreign branching, private equity, and wholly owned subsidiaries.
refers to the strategy of approaching worldwide markets with
Such markets are most commonly created by end consumers that prefer
lower-priced, standardized products over high-priced, customized products
and by global corporations that use their worldwide operations to compete in