Essay on Global Trends

1294 Words Jan 20th, 2012 6 Pages
1. Conducting Business during the 21st century has many dimensions. To what extent are national forces being superseded by global trends, especially in terms of multilateral institutions such as the European Union and various economic agreements in the Western Hemisphere and Asia? When a company considers investing internationally, what circumstances should influence how much priority is given to global concepts and/or national differences when evaluating the four alternatives for strategic choice?

Globalization has triumphed since the last century after the end of the cold war in the late 1980s. It has made extensive efforts to unify the world’s economic order, created tremendous benefits for the countries that participate and is the
…show more content…
This may help them better to have access to cheap low cost labor, raw materials, key suppliers, key consumers, energy and other natural resources. In order to maintain flexibility, the company must allocate its resources as well as tap the local resources to keep the firm and its products unique. Firms should also be flexible about shifting production as cost and other factors such as exchange rates fluctuate. Firms should be open to learning and internalizing knowledge gained from international ventures. This, in return enhances the management’s capabilities, the technology required and the overall brand name of the firm.
In addition to the three objectives, the firms that decide to invest internationally also face other challenges that are identified in the Integration-responsiveness framework. The central challenge that most companies face while expanding internationally is that of maintaining the balance between global integration of activities and local responsiveness. Global integration refers to managing the firms’ activities across nations to achieve global efficiency, synergy and taking maximum advantage of similarities across nations. On the other hand local responsiveness is the effort of responding to specific needs of consumers in host countries.
Based on the strategic choices and the balance of the Integration-Responsive framework, managers have four basic strategies at their disposal namely
• Global standardization strategy

Related Documents