Strategic Management: Key Concepts Of Global Strategic Alliances
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create synergy; accomplish more than could be achieved had the businesses been operating independently; coordinate effort; gain and share technologies; gain entry into an overseas market.
Major multinational businesses routinely enter into global strategic alliances as an integral part of their corporate strategy and the practice has become widespread in recent years.
See also green-field investment.
Global strategic planning
Global strategic planning aims to maximize global economies of scale and economies of scope, while at the same time incorporating the advantages of local responsiveness to customers in the countries in which the organization operates.
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The globalization of markets implies that many international businesses no longer consider individual national markets to be distinct entities. Although, until recently, many nations were closed by virtue of the fact that it was difficult to trade there, now that trade barriers have been removed, these national markets are merging and can be treated in a very similar manner. Concerns regarding transportation, distance to market, and even culture, are being subsumed as international businesses increasingly treat all national markets the same. In May 1983 an article by Harvard Business School Professor Theodore Levitt prophesied the advent of globalization. Levitt predicted that as new technology extended the reach of global media and reduced the cost of communications, consumer tastes would converge, creating global markets for standardized products. His theory was considered somewhat outlandish at the time; a full third of the world’s population still lived in communism countries. Levitt had failed to incorporate the role of technological change and its impact on production methodologies. Whilst globalization is a clear fact of life, standardization has given way to more varied and specialized products which are now produced as a result of improvements in production …show more content…
Globalization of production
The term ‘globalization of production’ refers to the trend among international businesses, notably multinationals, that have increasingly chosen to disperse their production processes across the world. In essence, these multinationals take full advantage of specific countries’ factors of production in order to frame their global manufacturing policy.
Weiss, John, Industrialisation and Globalisation: Theory and Evidence from Developing Countries. London: Routledge, 2002.
Key Concepts in Strategic Management