Question

What would motivate a company to pursue a global strategy and what's necessary to achieve a successful program?

Answer 1

Following are the most significant factors that would motivate a Company to pursue a global strategy:

• Interest of the Companies to expand its geographical horizon owing to the motive of expansion of shareholder’s wealth, more sales and thereby minting more profits.
• It is believed that Globalization helps in doing away with all sort of Free Trade barriers such as taxes or subsidies.
• The economic growth, employment opportunities and healthy competition are also some other factors driving Globalization.
• Companies may like to take an advantage of International currency fluctuations thereby helping those countries to penetrate deep into the other global markets.
• Certain countries also believe in improving the conditions of democracy and human rights in other countries due to the blend of foreign capital and technology with such countries.
• The world has become a Global village with foreign products being accessible at ease only because the countries have thrown open their boundaries thanks to their Government policies. This has in turn given rise to Globalization.
• View of the federal Government of various countries for a positive cultural exchange among the countries.
• Governments of various countries intend to undertake the summits to bring about a common platform to discuss the ecological issues of each other which are possible by Globalization, apart from many other ways.

However, intense competition is one of the most significant motivator for the growth in globalization on the part of the Companies. The Companies go global due to the cheaper cost of production at the emerging markets rather than continuing to operate in a saturated market with no potentialities of growth and income. This saturation is in turn giving a want to expand geographically to the markets where the demand potential still exists. Also, in a case where the Company is under extreme pressure from the competitors, it only makes more sense to resort for other emerging markets globally and hence it is a significant factor driving globalization.

In order to achieve a successful program regarding the Global strategy, following could be undertaken:

• High class management team with a global mind set
• Global strategy
• Global operations and products
• Global technology and R&D
• Global financing
• Global brand management and marketing