Matching Strategy to Foreign Operating Environments - Coursework Example

Matching Strategy to Foreign Operating Environments Introduction The IR frame works serves to consider business as a unit which can be analyzed to determine the different aspects and variables constituting to the process. Likewise, it functions to recognize that those tasked with the responsibility of managing businesses often share perceptions of such things like the environment. Therefore, the use of IR framework by these managers allows easy identifying and capturing the different pressures existing in their businesses (Culpan, 2002). Moreover, for managers to succeed in capturing the different pressures their business are facing, their use of the IR framework must based on managerial perceptions alongside the pressures placed by global integration and the pressures from local responsiveness. International Decision Making In applying international decision making it is essential to base on the capability of transferring and adapting the parent firm’s knowledge or capabilities of the foreign markets. A company planning on conducting its operations outside the borders of its local authority should have a good knowledge of the different trends prevailing in the different international markets. Companies applying international decision making should be able to apply international strategy to influence and control all decisions pertaining to strengths and weaknesses posed by companies operating in the markets they intend in venturing into. This will provide them with a leverage point as they will be able to determine and structure their products and services in such manners that reflect on the needs of foreign markets therefore being able to stand the competition posed by other companies. A good example is that Carrefour which is an international retailer is able to make good international decision making which entails the application of different standardized hypermarkets to venture into different countries where it carries out its activities or business. The best strategy to apply in such occasions where international decision making is required involves the use of International strategy (Cavusgil, Knight, & Riesenberger, 2011). a. International Strategy This strategy can be described as a company’s ability to take its strength from the domestic market and use the same strategy in entering or venturing into international strategy. A good example of a company that uses this strategy is Wal-mart supermarket. This is because the company has taken the strategy which it uses on its country base to venture and introduce their goods in other countries yet still succeed in the international markets. Moreover, International strategy is best effective in a company when the company has unique strengths which cannot be matched by other competitors in the international market. Likewise, the company in question must have the ability to succeed within locals markets as it should be above such things like pressure from local competitors to consider it capable and suitable to venture into international markets (Cavusgil, Knight, & Riesenberger, 2011). Multi Decision Making Multi national decision making involves quadrants where managers are required to make decisions basing on the differences existing between national markets and operating environments. A company using the multi decision making strategy lays major emphasis toward the primary and national differences existing in their markets and productions therefore adopting an approach of decision making which entails marketing strategies from one country to the other in accordance to the differences of customers taste and preferences in the specific countries. Moreover, these companies are also forced to adopt industry characteristics of different countries and the government regulations used in each country to place themselves in a position where they can directly benefit from their expansion exercises in the region (Harzing, 2000). Therefore, the form of decision making made by these companies is always decentralized and related to foreign operations as it more opportunistic for the companies that when the process of decision making is centralized in all markets and foreign countries. A good example here is the use of Heineken Company which perfectly blends into the international markets of different countries as they provide classic choices for their customers in each and every country they decide to make an expansion in. The best strategy that can be applied by such companies faced with multi decision making involves the adoption of the multi domestic strategy in the operations. a) Multi Domestic Strategy This strategy involves entering or moving towards internationalization through the use of local products which are domestically made through such channels like conducting good marketing campaign on the product or services to attract audiences both within and outside into purchasing or ordering for the purchase of the product. Moreover, it also involves channeling the production process to suit the different needs of the targeted audiences in different areas or different countries. A good example of a business which has been successful in the use of this strategy is the Tesco supermarkets which have tailored their business to match the different needs in different countries. For example in China, Tesco has ensured that such things like shelves used in displaying their products are structured to meet the different needs of the customers based in China and are different from those which may be used or are in use in such countries like the United Kingdom. Moreover, this strategy is also based on different managerial philosophy to work because it requires varieties in different segments which can only be made possible by the managerial philosophy in use at specific locations where the business tends to expand into. When used practically of placed in practice, this strategy allows various branches to operate independently to be able to achieve or attain the customer needs on those specific locations (Eccles, Krzus, & Ribot, 2015). Companies applying these strategies always allow their different branches to customize on their operations aspects in order to meet the specific needs of their customers. A good example is that products produced as much as they are similar, various aspects of the products are different from those produced in the UK as compared to those produced in China. A further example would be the use of different packaging on both countries to capture on the different interest of consumers from the two regions or influence their behavior towards buying the products or services as they discover that the products and services identifies much more within them. Therefore, companies using this strategy are able to boast of capability to maximize on their on their competitive response to meet the different requirements availed at different target markets. However, the strategy is only functional or applicable in cases where there are high pressures from local responsiveness (Cavusgil, Knight & Riesenberger, 2011). Global Decision Making Companies involved in global decision making always require a central coordination and control than companies using other forms of decision making. This implies that these companies position themselves in a regional base where they can freely conduct their processes research and development, manufacturing and marketing activities. Likewise, apart from having headquarters, companies applying global decision making strategies ensures that all strategic decisions are conducted at the headquarters while little branches can implement the decisions made at the headquarters. Global decision making for companies entails an internationalization of the decision making process which is highly characterized by integration and markets are always selected on the basis a well crafted global plan. Most Japanese firms are known to apply global decision making strategy in their companies to easily expand their operations into international markets as they normally create capacity and experience in new markets where they plan on expanding into before starting the process of expansion. The best strategy that companies can apply when faced with global decision making is the global strategy (Usunier, 2000). a) Global Strategy This strategy can be described as situation where companies look at the world as one market place therefore standardized their products to produce similar products in different targeted markets. A good example of a company that applies this strategy is the automotive industries like the Mercedes which designs its cars similarly for all targeted markets. The makes and models of the cars are always similar in each country and you can not find that the brand of the car has a differentiating aspect which has been customized in one country yet not used in the other country (Zou, Shaoming & Tamer, 2002). The strategy works best when there is a share managerial philosophy. Managers applying this strategy are always for the idea that the goods are better placed when they are similar and not when they are different. The idea of shared managerial philosophy practiced on this strategy is always based on empirical evidence. Moreover, when put to practice this strategy always ensures that companies operating in international markets serve identified countries with internationally branded goods which are always produced from a single location. The Mercedes Company is a good example of companies which operates under this strategy. Likewise, companies using the strategy always make good use of economies of scale to adopt global strategies hence allowing them to expand to larger and competitive markets. This might be weakness for the use of the strategy by companies is that the strategy always puts companies at high pressures of global integration, and weak pressure from being locally responsive. In sum, for companies to succeed in their use of the strategy they are forced to counteracting opportunities and advantages which exist in specific countries where they intend to operate (Cavusgil, Knight & Riesenberger, 2011). Transnational Decision Making Companies using transnational decision making hallways base their decisions which are characterized by corporate management supervision. This is because to protect themselves from espionage the companies have to always ensure that they protect themselves from other companies by making decisions at their headquarters and not in their many branches across different countries. The decisions which requires protection from other corporate espionage always involves decisions relating to basic research underpinnings which reveals the SWOT analysis of their operations. Likewise, these companies also make decisions by exploiting on the opportunities and advantages of the different countries while trying very hard to attain scale efficiency in their operations in the different countries where they conduct their businesses. A good example is that a company may decide to make its advertising marketing decisions in London, production decisions in America and other related decisions concerning their operations in Africa. This gives such companies a competitive edge especially when conducting their businesses in international markets as it makes it difficult for other would be competitors from copying their entire operations and using it in their operations (Cavusgil, Knight, & Riesenberger, 2008). Moreover, companies applying transitional decision making in their operations may decide to rest such decisions like advertising campaigns on various subsidiaries because they largely benefit from flexible responsiveness derived from specific national needs and political interest. These prevents them from bumping into problems with such issues like operating contrary to the business policies put in place for markets in different countries. The benefits of companies applying transnational decision making into their operations involve a complex configuration of assets, resources and capabilities present in different markets. The best strategy for companies involved in the type of decision making is adopting the use of transnational strategy in their operations. a) Transnational Strategy Transnational strategy can be described as a combination of the benefits of global scale with the advantages of local responsiveness. The effectiveness of the strategy as compared to other strategies always leads to great performances which can be largely witnessed in companies in terms of expansion or growth rates. Most companies using this strategy always assign or delegate their operations to different individuals or bodies which are able to achieve both global integration and local responsive because of their elaborate knowledge on different markets. This means that when a company is planning on entering an international market, it will involve the ideas of the staff or management with those of the experts of the specific markets therefore leading to result based operations in the market (Harzing, 2000). Conclusion In conclusion, whereas the use of two processes which results in transnational innovations are quickly spreading in many companies today, the processes have served to replace the traditional central and local innovations processes which were currently being applied by companies in their operations. Companies operating in competitive environments always look for strategies which can enable them to engage on their resources and capabilities to beat the competition posed in by their competitors in the market. Moreover, successful companies are always defined by the strategies they use in countering competition and depending on the circumstances and situations of operations; the companies may decide to select any of the four mentioned decisions making strategies highlighted above. Through the use of the four decision transnational strategy, global strategy, multi- domestic strategy and international strategy, most companies have been able to maximize on their capabilities to develop new knowledge, create new capabilities and ideas which when apply in their operations results to innovation and learning hence improving on the value of products and services while also enabling from, expansion both locally and internationally. References Bartlett, Christopher A. (2002), “Philips versus Matsushita: A New Century, A New Round,” HBS Case Nr. 9-302-049. Cavusgil, S. T., Knight, G. A., & Riesenberger, J. R. (2011). International business: The new realities. Upper Saddle River, N.J: Prentice Hall/Pearson. Culpan, R. (2002). Global business alliances: Theory and practice. Westport, Conn: Quorum Books. Eccles, R. G., Krzus, M. P., & Ribot, S. (2015). The integrated reporting movement: Meaning, momentum, motives, and materiality.  Harzing, Anne-Wil (2000), “An Empirical Analysis and Extension of the Bartlett and Ghoshal Typology of Multinational Companies,” Journal of International Business Studies, 31 (1), 101-120. Usunier, Jean-Claude (2000),Marketing Across Cultures. Third Edition, Financial Time-Pearson Education:Harlow (UK). Zou, Shaoming and S. Tamer Cavusgil (2002), “The GMS: A Broad Conceptualization of Global MarketingStrategy and its Effect of Firm Performance,” Journal of Marketing , 66 (October), 40-56. Read More