Question

Discuss the global and international challenges facing firms and why this is a strategic issue.

Answer 1

Here are the global and international challenges facing the firm & also mentioned why the same is a strategic issue:

The constant capitalisation of advanced technology & business orientation of globalisation: Business operations in the past 5 years are going global and becoming technologically very advanced hence it becomes important to plan strategies for such an environment. New technologies and methods like social media, newer software & hardware systems etc are being adopted and is making business more accessible across the world.

Globalisation and technology will keep moving further in the coming decades and it is imperative that the organisation take into account these factors while forming a strategy.

Exports and FDI (Foreign Direct Investment) are expected to grow rapidly considering the economy is on hold because of COVID-19 hence a major portion of revenues and foreign markets will depend on resolving this challenge.

It is important strategically to plan the same:

• It is important for managers to encourage creativity and develop high adaptation to such changes
• With e-business penetrating every level it is important for managers to resolve this by accommodating e-commerce & other tech motives into business strategy
• The management has to ensure that business has updated knowledge regarding subjects like International Human Resource Management, International Finance, International marketing etc.
• Extrapolation, prediction markets, futurology & simulations are some of the modern techniques that must be used as part of the strategy.

Government & Business relationship management has influenced a lot of business practices in past 5 years: Firms have to ensure that the relationship between local government & business is less complicated and constant communication is there with relevant departments. Government body regulates trade, enforce labour laws and bring constant changes in tax structures making it important to plan future strategies to plan revenues & operations scale.

Firms will have to take logical steps as they directly impact the strategies and here are some steps that can be taken:

• The first step is to ensure that the organisation takes an active interest in Government at state, federal & even at the global level. The business needs to maintain a truthful and ethical relationship with the Government.
• Scenario-based strategic planning - the organisation must plan its operations considering both positive and negative laws and taxation policies.
• By preparing for different pictures in the future it can increase its potential to increase the quality of decisions, improve performance and face challenges in a better manner.
• Strategic management processes should involve the latest techniques like SWOT analysis, BCG portfolio matrix to be able to predict such external changes & manage the relationship with the government.

Embracing the social challenges and making constructive social change for society is another important factor that has influenced the business landscape.

The business at the core of its operation needs to ensure that it conducts its practices in a socially responsible and ethical manner. In the 21st century, there is an existence of many pressure groups in the society that operates in areas like environmental activism, consumer protectionism etc.

Post-COVID - 19 people and consumer behaviour is expected to change and many customers especially in the Gen - Z and Millenial market will prefer products and services that have a positive impact on the environment & society at large.

It is important to incorporate the same as part of strategies and here is why:

• It is important for a business to plan social change as an opportunity than a crisis management strategy.
• Environmentally beneficial practices & focus on accessible and local employment can help a business earn public trust and increase credibility.
• Strategic planning should involve & ensure investment in CSR initiatives to manage the reputation of the firm and also improve competitive advantage.
• Plan for broader stakeholders - The business need to ensure it meets quality standards, have a modern and effective customer feedback mechanism, grievance redressal, adherence to various laws should be given top priority.

Providing above-average services to customers is another global challenge which firms are facing and a strteagic action is must to produce superior products.

• The main aspect which will differentiate the organisation from the competitors will be the benefit and satisfaction of customers. This means the employer should focus on the above quality products already existing in the market.
• Features play an equally important role and the benefits to the customer and other advantages as compared to competitor products will define the future of the company.
• Leading the industry with above-average benefits is important because it means the employer has superior knowledge and product/ service understanding. It helps to develop expertise in the field and get well-known for it.
• To develop a competitive advantage the employer should lead with above-average benefits and products so that others can't replicate it.
• It is important to ensure that product or service is delivered efficiently than others.