Question

Q5 What would motivate a company to pursue a global strategy and what is necessary to achieve a successful program?

Meaning of the Question – This is a strategic management question that requires your understanding of what global strategy is, why the strategy is desirable, and what is required organizationally to be successful. This brings in many concepts and terms, such as AFI, external and internal analysis, vision, goals and objectives, strategic management, business strategy, organizational structure, and many more.

Answer 1

A global strategy is one technique or way which a company effectively uses when it wants to expand and compete in its global market and business. This strategy helps the company to grow expotentially across the borders and this is the reason why it is called a global strategy.

Factors which would motivate a company to pursue a global strategy and necessary elements to achieve them are:

1. Diversification: The first factor is the diversification factor. Many business who wants to diverse its business and get into other product line or service utilises a global strategy to diversify its business. For example Amazon strategically diversofied its business from online shopping to providing AI services like Alexa for people as well. This is diversification. For achieving a high degree of diversification, the company needs to ensure a high degree of cash flow to operate the actions in all countries. One cannot simply diversify its business without having a strong hold on cash and funds available to know the markets.

2. New Markets: Other factor which motivates the people to get and try the global strategy is the emerging new markets. There are around 192 countries in the world and no business wants to deal with only one country or one kind of market. Thus, just like Amazon the motivational factor of getting into another countries and exploring new people and new markets help companies to grow more. The necessary element for growing the new markets is the management and controlling technique. One should have a strong hand over the management of various countries and the companies situated in them. It is hard to manage all the companies together but it is not impossible.

3. New Resources and Technology: At last, one more factor which motivates people to try global strategy is the attraction towards new resources and technology. By going into more new countries, you get to explore more resources and technologies and thus have a stronger supplier chain for your management and company to produce more effectively and efficient. But one thing that has to be kept in mind before going into this factor is the strong integration and controlling process. Having multiple suppliers is a beneficial thing but one has to integrate and control all the relevant tasks and activities together to have a strong supply chain management established for the company to achieve sustainability.