GLOBAL ISSUES ON

STRATEGIC
MANAGEMENT

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 STRATEGIC
MANAGEMENT
What is Strategic Management?

Strategic management is the process of

developing and executing a series of
competitive moves
to enhance the success of the organization
both in the present and in the future..
It is a sound process that include an
analysis of the current business situation,
the formulation of objectives and strategies
based on that analysis, and an
implementation and evaluation procedure
that ensures progress toward each strategy
and objective.
focuses on the formulation of appropriate
strategic objectives based on a sound
understanding of the internal and external
environments faced by the firm. 2
 GLOBALISATION
The integration of national economies into
the international economy
through trade, foreign direct investment,
capital flows, migration, the spread of
technology, and military presence.
usually recognized as being driven by a
combination of economic, technological,
sociocultural, political, and biological
factors.
influenced the use of language across the
world. This street in Hong Kong, a former
British colony, shows various signs, a few
of which incorporate both Chinese and
British English.
Japanese McDonald's fast food is an
evidence of corporate globalization 3
 Global strategic
management
Global strategic management in a new world order
The globalization of business has become so rapid that a new
field called "Global Strategic Management" has now emerged.
This new field is a blend of strategic management and
international business that develops worldwide strategies for
global corporations.
Events such as the collapse of communism, the arrival of an
environmental ethic, and other remarkable new developments
signal that a new era is emerging in global affairs.
This article describes a broader approach to global strategic
management that encompasses these revolutionary changes.
project sponsored by the World Future Society called "WORLD
2000 focuses on conducting a global strategic management
process among business, govt, education, and other sectors of
society
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 Research in global
strategic management
Editorial Objectives:-
The focus of this series is the international dimension of
strategic management. Through each original paper published
on new issues of interest in the field it provides a rich
understanding of international coverage of global strategic
management.
Topicality:-
First published in 1990, topical volumes are published regularly
on an annual/bi-annual basis. On occasion a volume is
produced based on the proceedings of a key conference called
to debate a new aspect of international management strategy.
Key Benefits:-
Each volume provides regional and global perspectives on
current developments and research themes in an aspect of
international strategic management.
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 CONT…
Key Audiences:This series provides essential
material for advanced students and decision-makers
interested in the changing role of international
strategic management.
Coverage:Topics of interest in this series include: the
strategies of multinational enterprises; the nature and
extent of globalization as it applies to firm strategy;
network relationships and organizational structures
relevant to international strategic management;
theories of international management; the implications
of international trade and investment agreements as
they affect business strategy;and other thematic
issues relevant to studies in international business
strategy. 6
 Ten Reasons Why Going
Global Is Advantageous To
Your Company
1. Increases sales and profits (especially if fixed costs are tied to domestic
operations) = bigger chunk of growth gain.
2. Earns a greater return from a set of core competencies.
3. Generates economies of scale in production.
4. Enhances local competitiveness and paves the way to larger, more lucrative
customers.
5. Create jobs, productivity growth, and wealth.

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 CONT….

6. Enlarges the pie of potential investors.

7. Insulates seasonal domestic (local) sales by finding new
foreign markets and selling excess production capacity.
8. Cuts costs through global outsourcing.
9. Reduces dependence on existing markets.
10. Capitalizes on tax advantages.
The knowledge you gain from learning the ropes of
international business will make you open to new ideas,
new approaches, new marketing techniques, new
customers and new confidence to take on the world!
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Global buisness environment
In order to operate succesfully in a global market,a
manager should understand the environmentvailing
there.
The environment should be understood,analysed and
then used to one’s advantage.
The environment may be devided into INTERNAL and
EXTERNAL.
INTERNAL ENVIRONMENT is related to internal
variables of market.
EXTERNAL FACTORS are uncontrollable factors as the
firm have no control over constraints.
The global buisness environmental factors are discussed
as follows:- 9
 Global buisness
Environmental
factors

Economic variables
Legal and political Socio-culture
*global economy variables variables
*indvidual economies

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 GLOBAL BUSINESS
ENVIRONMENTAL FACTORS
ECONOMIC VARIABLES
The economic variables are the mos important factors which
require proper strategic decision making.
 The economic factors prevailing in a global economy and
factors of indvidual economy where one is to opreate
should be understood before taking up opreations.
 Secondly,economical variables keep on fluctuating or
changing,so it is essential to adjust the plans as per the
requirement of situation.
 It is further devided into Global economy and indvidual
economy which are discussed below:
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 CONT…
GLOBAL ECONOMY:
 various countries have economic relations with one another.the trade relations
among countries are based on mutual benefits.A global manager should know
volume of global trade,its composition and contents,pattern of world
trade,balance of payments,tarrifs,quotas etc.
 The manager should also assess the positon of his country in relation to world
economic system.

INDVIDUAL ECONOMIES:-

 The economy of every country has its own composition,strenghts and

weaknesses.
global manager has to understand the divergent attributes of
domestic economies.
 From buisness point of view,the availbility of infrastructural facilities
like roads,energy
banking,communication,water etc.the understanding of all this factors
will help a global manager in taking strategic decision about buisness.

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LEGAL AND POLITICAL VARIABLES:-

 Legal and political variables dfine and restrict the area of operation of
outside businessmen
 Government of time lays down role of foreign investors in industry and
trade
 International conventions and treaties should be clearly understood
 Knowledge of laws help manager to make decisions

SOCIO-CULTURAL VARIABLES:-
 Directly influence marketing of products in any market
 Cultural factors influence the way of living of people which further
influence availability of goods
 Competition among suppliers forced them to adopt new and better
ways of selling goods
 manager should keep track of changing socio cultural factors
 Education system also influences supply of technicians
 Understanding of language, aspirations,likings etc is also necessary 13
 GLOBAL STRATEGIC
DECISIONS
MARKET SELECTION:
before deciding factors like size of market,growth potential,distribution system etc
should be studied
also influenced by policy of the firm
position of the firm to cater to the demand

MARKETING DECISION:
strategies for domestic and foreign market
Funds required for entry in market
Consideration of risk factors

METHOD OF ENTERING GLOBAL MARKET:

direct and indirect imports and exports
Licencing or franchising
Foreign subsidiary alliance
Joint venture

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 CONT….
MARKETING MIX:
Variables of product,price,promotion and place should be planned
Use of Standardised marketing mix
Time saving and easy to control

MARKETING ORGANISATION:
organisation act as tool to plan,control and coordinate global issues.
Fixation of tasks and responsibilities
Organisational options can be
functional,products,customer,area,matrix etc

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 BASIC ISSUES IN GLOBAL
BUSINESS
MODE OF OPERATIONS:
business can enter in form of
joint venture
Open branches
Franchising
Establish subsidiary company
there may be laws in some countries where mode of operations of foreign
companies is decided.So one has to adopt only that mode of operations

ALLOCATION OF RESOURCES:
May be affected by organizational structure of the company
Resources may be transferred from a place where these are surplus to place
where those are required
This type of balancing may save cost of providing funds

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 CONT…
PLANS AND POLICIES:
these to be followed in following departments
Production
Finance
Marketing
Research and development

LEADEARSHIP:
Create a powerful team
Mass communicate the new strategy
Form new teams to design and implement new changes
Initiate new projects
Anchoring new approaches

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 STRATEGIES FOR GLOBAL
BUSINESS
GLOBAL STRATEGY:
customer liking is same for both markets is presumed.
Standardised products can be sold simillarly in all markets
Standardised products have competitive advantage in economy
May centralize R&D activities in one country , production may be
decentralized

MULTIDOMESTIC STRATEGY:
companies tries to achieve high level of responsiveness
customer choices and preferences may be different in different countries
Mainly based on differentiation
Customised products is requirement of these markets

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 CONT…..
INTERNATIONAL STRATEGY:
opening international division for exporting goods in countries where
required
all control is retained at home office regarding product
MNC’s have adopted this strategy
Does not allow company to benefit from lowering cost or customizing
products to global customers

TRANSNATIONAL STRATEGY:
involves adoption of combined approach of low costs and high local
responsiveness
need to involve subsidiaries in generating ideas
Difficult to adopt these contradictory strategy

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