b. Global Competitive Strategy:
Companies adopt this strategy when prices and competitiveconditions across the different countries are strongly linked together and have common
synergies. In a globally competitive industry, a company’s business gets affec
ted by thechanging environment in different countries. The same set of competitors may competeagainst each other in several countries. In a global scenario,
a company’s overall competitive
advantage is gauged by the cumulative efforts of its domestic operations and the internationaloperations worldwide.
A good example to illustrate is Sony Ericssson, which has its headquarters in Sweden, Research andDevelopment setup in USA and India, manufacturing and Assembly plants in low wage countries likeChina and sales and marketing worldwide. This is made possible because of the ease in transferringtechnology and expertise from country to country.Industries that have a global competition are automobiles, consumer electronics, watches andcommercial aircraft and so on.
Benefits of Globalization:
The merits and demerits of globalization are highly debatable. While globalization createsemployment opportunities in the host countries, it also exploits labour at a very low cost compared tohome country. Some of the benefits of globalization are as follows:
Promotes foreign trade and liberalization of economies.
Increases the living standards of people in several developing countries through the capitalinvestments in developing countries by developed countries.
Benefits customers as companies outsource to low wage countries. Outsourcing helps thecompanies to be competitive by keeping the cost low with increased productivity.
Promotes better education and jobs.
Leads to free flow of information and wide acceptance of foreign products, ideas, ethics, bestpractices and culture.
Provides better quality of products, customer services and standardised delivery modelacross countries.
Give better access to finance for corporate and sovereign borrowers.
Increase business travel, which in turn leads to flourishing travel and hospitality industryacross the world.
Incease sales as the availability of cutting edge technologies and production techniquesdecrease the cost of production.
Provide several platforms for international dispute resolutions in business, which facilitatesinternational trade.