Business strategy 1.

0 Introduction

To meet the organization’s objective, managers craft a strategy. What’s a strategy? The Webster think that is science of planning and directing large-scale operations, of maneuvering forces into the most advantageous position prior to actual engagement with the enemy. The Simpler think that strategy is a plan to marshal or deploy scarce resources. Business strategy is concerned with how the firm competes within a particular industry or market to win a business unit must adopt a strategy that establishes a competitive advantage over its rivals. The determination of the long run goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. In company, there are many approaches to implement strategies to ensure profitability of the company. But our group will discuss several approaches of them. Strategic Alliances are a product of modern business competition, it is an enterprise in order to achieve their strategic goals and other enterprises on the basis of shared interests to form a complementary division of labor and cooperation loosely networked alliances. It may present as a formal joint venture, which two or more joint venture companies have business interests and strategic alliances; or the performance of a contractual agreement for the short term, the two companies agreed to a top topics such as developing a new product issues such as cooperation. Strategic alliances are the long-term competitive advantage in the pursuit of business process to achieve business goals stage alliance with other companies, through mutual exchange of complementary resources to form a joint force advantages and against strong competitors.


Business strategy Marketing strategy based on the enterprise's strategic objectives in the transformation to a market must be of concern "to determine customer needs, market opportunities analysis, the analysis of their strengths, their weaknesses reflection of market competition considerations, possible problems predicted team training and upgrading a combination of factors, and ultimately determine growth, defensive, reversing type, integrated marketing strategy, enterprises will be established as a strategic guide to the direction and guidelines for market transformation Operations Strategy is a plan for the design and management of operations functions, developed after the business strategy and focuses on specific capabilities which give it a competitive edge – competitive priorities. It is capabilities that the operations function can develop in order to give a company a competitive advantage in its market. Human resources strategy is the scientific analysis of predictors of future environmental changes in the human resources supply and demand conditions, to develop the necessary human resources to acquire, use, maintain and develop strategy to ensure the organization and needs the time required to position, on the human resources in quantity and quality requirements, so that organizations and individuals to continue the development and interests of the enterprise development strategy is an important part. Nowadays, technology and globalization shape the world. The first helps determine human preferences; the second, economic realities. Standardized consumer products, low price and technology are key points for successful globalization. The globalization of markets is at hand. With that, the multinational commercial world nears its end, and so does the multinational corporation. The world`s needs and desires have been irrevocably homogenized (market needs). This makes the multinational corporation obsolete and the global corporation


Business strategy absolute. Nobody is safe from global reach and the irresistible economies of scale (reduction of costs and prices) and scope. The multinational and global corporations are not the same thing. The multinational corporation operates in a number of countries and adjusts its products and practices in each at high relative costs. The global corporation operates with resolute constancy at low relative cost (price) as if the entire world (or major regions of it) were a single entity; it sells markets the same high-quality things similarly everywhere. But, many global firms produce the same products the same way for a global market but tailor their selling approaches to local variations in the global market. (Standardization vs Localization) The modern global corporation contrasts powerfully with the aging multinational corporation. Instead of adapting to superficial and even entrenched differences within and between nations, it will seek sensibly to force suitably (more or less) standardized products and practices on the entire globe. (think globally, act locally)

2.0 Global Marketing Strategy

Whether to compete globally is a strategic decision (strategic intent) that will fundamentally affect the firm, including its operations and its management. For many companies, the decision to globalize remains an important and difficult one (global strategy and action). Typically, there are many issues behind a company`s decision to begin to compete in foreign markets. For some firms, going abroad is the result of a deliberate policy decision (exploiting market potential and growth); for others, it is a reaction to a specific business opportunity (global financial turmoil, etc.) or a competitive challenge (pressuring competitors). But, a


Business strategy decision of this magnitude is always a strategic proactive decision rather than simply a reaction (learning how to business abroad). Reasons for global expansion are mentioned below: a) Opportunistic global market development (diversifying markets) b) Following customers abroad (customer satisfaction) c) Pursuing geographic diversification (climate, topography, space, etc.) d) Exploiting different economic growth rates (gaining scale and scope) e) Exploiting product life cycle differences (technology) f) Pursuing potential abroad g) Globalizing for defensive reasons h) Pursuing a global logic or imperative (new markets and profits) Moreover, there can be several reasons to be mentioned including comparative advantage, economic trends, demographic conditions, competition at home, the stage in the product life cycle, tax structures and peace. To succeed in global marketing companies need to look carefully at their geographic expansion. To some extent, a firm makes a conscious decision about its extent of globalization by choosing a posture that may range from entirely domestic without any international involvement (domestic focus) to a global reach where the company devotes its entire marketing strategy to global competition. In the development of an international marketing strategy, the firm may decide to be domestic-only, home-country, host-country or regional/global-oriented. Each level of globalization will profoundly change the way a company competes and will require different strategies with respect to marketing programs, planning, organization and control of the international marketing effort. An industry in which firm competes is also important in


Business strategy applying different strategies. For example, when a firm which competes in the pharmaceutical industry which is heavily globalized, it has to set its own strategies to deal with global competitors. (Constant innovation) Tracking the development of the large global corporations today reveals a recurring, sequential pattern of expansion. The first step is to understand the international marketing environment, particularly the international trade system. Second, the company must consider what proportion of foreign to total sales to seek, whether to do business in a few or many countries and what types of countries to enter. The third step is to decide on which particular markets to enter and this calls for evaluating the probable rate of return on investment against the level of risk (market differences). Then, the company has to decide how to enter each attractive market. Many

companies start as indirect or direct export exporters and then move to licensing, jointventures and finally direct investment; this company evolution has been called the internationalization process. Companies must next decide on the extent to which their products, promotion, price and distribution should be adapted to individual foreign markets. Finally, the company must develop an effective organization for pursuing international marketing. Most firms start with an export department and graduate to an international division. A few become global companies which means that top management plans and organizes on a global basis (organization history). Typically, these companies began their business development phase by entrenching themselves first in their domestic markets. Often, international development did not occur until maturity was reached domestically. After that phase, these firms began to turn into companies with some international business, usually on an export basis. But, this process may vary dramatically with the size of the domestic market. For example, when we contrast the


And it is getting a late start. It purchased 10 percent of Sweden`s Volvo and planned to design a new car in conjunction with Volvo. In the 1980s. Then in the 1970s. As the international side of their sales grew. promotion projects a uniform image. Only during their latest phase have these firms begun to transform themselves into global marketing behemoths whose marketing operations are closely coordinated across the world market rather than developed and executed locally. Although this orientation improves coordination and control. some newer firms are jumping right 6 . Now it finds it must crack the world market if it expects to survive. it developed a Europe wide market. Pursuing multi-domestic strategies on a market-by-market basis. But. it often discounts national differences.Business strategy Netherlands market for Philips vs.‖ France`s Renault was moving quickly into the world market. the US market for GE. This traditional sequencing of the growth from domestic to international. companies began to enlarge and build considerable local presence. to multi-domestic or multinational to global seems to be followed by most firms and also by many newly formed companies. The French automobile industry offers a good illustration of the evolution of an international marketing strategy. However. according to an industry analyst for Euro finance: ―For years. we see that smallness of Netherlands`s market resulted in rapid globalization of Philips` activities when compared with GE`s activities in US. the Volvo deal fell apart which is one of the reasons that they went to Nissan. Regions are treated as single markets and products are standardized by region or globally. the companies increasingly distributed their assets into many markets and achieved what was once termed the status of a multinational corporation (MNC). the French industry depended on the domestic market.

Once a company commits to extending its business internationally management is confronted with the task of setting a geographic or regional emphasis. Management must make a strategic decision to direct business development in such a way that the company`s overall objectives are congruent with the particular geographic mix of its activities. 7 . Other factors in this decision of foreign market selection include in addition to macro-environmental issues (economic. In particular.Business strategy into the latest or global category and not necessarily going through the various stages of development (management vision). product adaptation and competitive advantage). Africa or Asia. socio-cultural and political-legal factors). A company may decide to emphasize developed nations such as Japan or those of Europe or North America. Although competition from both other international firms and local companies is usually more intense in those markets. doing business in developed countries is generally preferred over doing business in developing nations. Because the business environment is more predictable and the investment climate is more favorable. some companies may prefer to pursue primarily developing countries in Latin America. firms with technologyintensive products have concentrated their activities in the developed world. Alternatively. Developed economies account for a disproportionately large share of world gross national product (GNP) and tend to create many new companies. micro-environmental issues such as market attractiveness and company capability profile (skills. resources.

) often affect operating results negatively. tariffs and other trade barriers. etc. largely because competition is often less intense in those markets. prices. the frequently changing political situations in developing countries (war. Africa. Consequently.) in those areas. convertibility of currency. the Middle East and Asia are also characterized by a higher degree of risk than markets in developed countries. huge foreign indebtedness. and transparency in the legal system (government agencies & systems.1 Emerging markets Emerging markets differ substantially from developed economies by geographic region and by the level of economic development. Moreover. companies need to balance the opportunity for future growth in the developing nations with the existence of higher risk. etc. foreign exchange problems. In many situations. corruption. the higher risks are compensated for by higher returns. protection of Intellectual Property Rights. The issues are infrastructure such as transportation. Markets in Latin America. etc. some markets that may have experienced high growth for some years may suddenly experience drastic reductions in growth. nationalism. a company`s operation can be expected to be subject to greater uncertainty and fluctuation. unstable governments. As a result. foreign government entry requirements. employment. technology. Furthermore. development. however. bureaucracy. 8 . stable banking. telecommunications.). laws and ordinances. technological pirating and high cost of product and communication adaptation can be issues in those countries. enforceability of contracts.Business strategy 2. Because of the less stable economic climates (income.

about two-thirds of that accounted for by Russia and other countries of the former Soviet Union. manufacturing and trade. Poland even gives companies that invest in certain sectors some tax advantages. East Germany has made the fastest transformation because its dominant western half was already there. including agriculture. Many countries are changing from a centrally planned economy to a market-oriented one. The market typically represents about 15 percent of the worldwide demand in a given industry.2 Long-Term Potential Although many companies consider this market as long-term potential with little profit opportunity in the near term. the country selection decision is one of the components of developing a global marketing strategy. in Poland. 2. a number of firms have moved to take advantage of opportunities in areas where they once were prohibited from doing business. foreigners are now allowed to invest in all areas of industry. Many of the reforms have increased foreign trade and investment.Business strategy The economic liberalization of the countries in Eastern Europe opened a large new market for many international firms. but very few firms end up competing in all of these markets. For example. The decision on where to compete. Eastern European nations like Hungary and Poland have also been moving quickly with market reforms. the development of any global marketing strategy will come down to selecting individual countries in which a company intends to compete. There are more than two hundred countries and territories from which companies have to select. At some point. 9 .

Markets that are defined as crucial to global market leadership. Although opportunities for additional profits are usually the driving force.3 Global marketing management Why is country selection a strategic concern for global marketing management? Adding another country to a company`s portfolio always requires additional investment in management time and effort and in capital. each additional country also represents both a new business opportunity and risk. It takes time to build up business in a country where the firm has not previously been represented and profits may not show until much later on. Contrary to other markets. In the context of selecting markets for special emphasis. the lead market concept can help in identifying those countries. They can analyze the investment climate of the country and determine market attractiveness of it. Lead market is the market where a company should place extra emphasis. they soon become aware that not all countries are of equal importance on the path to global leadership. It is essential for globally competing firms to monitor lead markets in their industries or better yet to build up some relevant market presence in those markets. markets that can determine the global winners among all competitors. As global marketers eye the array of countries available for selection. markets that companies can ill afford to avoid or neglect-such markets are ―must win‖ markets. Consequently. ―must win‖ markets can not be avoided if global market leadership is at 10 .Business strategy 2. companies need to go through a careful analysis before they decide to move ahead.

The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments 11 . Porter. differentiation focus and cost focus. the bargaining power of buyers. Firms can gain a competitive advantage through differentiation of their product offering or marketing mix which provide superior customer value or by managing for lowest delivered cost.4 Generic strategies Generic strategies are general classifications of prototype strategies that help us understand different approaches to globalization. the bargaining power of suppliers. Industry structure is the framework within which companies compete. These two means of competitive advantage when combined with the competitive scope of activities (broad vs narrow) result in four generic strategies: differentiation cost leadership. cost leadership and the like are archetypes that describe fundamentally different ways to compete. Firms need to understand their competitors because corporate success results from providing more value to customers than the competition. the presence of substitute products and the intensity of the rivalry between firms in the industry. 2. Five forces determine the attractiveness of an industry: the threat of new entrants. Generic strategies such as differentiation.Business strategy stake. Firms need to manage these factors so that industry structure is favorable. The concept has been widely used by writers on business and corporate strategies including Michael E. Creating and sustaining a competitive advantage can be achieved by offering superior value through a differential advantage or managing for cost leadership.

12 . Globalization deals with the integration of the many country strategies and the subordination of these country strategies to one global framework. although they may be the same in some situations. It may include but does not require similarity in products or in marketing processes. However. A company that pursues a global marketing strategy looks at the world market as a whole rather than at markets on a country-by-country basis which is more typical for multinational firms. These are the skills and resources at which the company excels and can be used to develop new products and markets. 2. When we consider the idea of sustainability of competitive advantage here. As a result.5 Globalization To many readers. it is conceivable that one company may have a globalized approach to its marketing strategy but leave the details for many parts of the marketing plan to local subsidiaries. many of these advantages are only temporary and can easily be copied. the term ―global marketing strategy‖ probably suggests a company represented everywhere and pursuing more or less the same marketing strategy. Analyzing these factors can lead to the definition of the company`s core competences. global marketing strategies are not to be equated with global standardization. The sources of competitive advantage are the skills and resources of the company.Business strategy whereas differentiation focus and cost focus strategies are confined to a narrow segment. A global marketing strategy represents the application of a common set of strategic marketing principles across most world markets.

Each subsidiary represents a separate business that must be run profitably. The multinational corporation operates in a number of countries. globalization of markets) The 13 . Many of today`s large internationally active firms may be classified as pursuing multi-domestic strategies. 1984. At the extreme. Such a modular approach to globalization is likely to yield greater return than a total globalization of a company`s marketing strategy. Multinational corporations tend to be represented in a large number of countries and the world`s principal trading regions. As a high relative costs. profit and loss responsibility tends to reside in each individual country. international firms operating as multi-domestic firms have organized their businesses around countries or geographic regions. this leads to an organization that runs many different businesses in a number countries-therefore the term multi-domestic.‖ (Theodore Levitt. To a large extent. The difficulty then is to determine which marketing operations elements will gain from globalization. and adjusts its products and practices in each . Although some key strategic decisions with respect to products and technology are made at the central or head office.Business strategy Few companies will want to globalize all of their marketing operations. the initiative of implementing marketing strategies is left largely to localcountry subsidiaries. ―The multinational and the global corporation are not the same thing.

the global business unit. they are not global because the coordination takes place across one single region only. 14 . These factors include: economic-financial factors. changes in consumer attitudes and behavior and the rise of generic brands have all contributed to a decline in brand loyalty. the global focus strategy and second. cultural factors.6 Integrated Global Business Strategies Looking at global business strategies. Asia or Latin America represent a halfway point between multi-domestic and truly global strategy types. The marketing research surveys study and analyze various factors within foreign markets and their importance to the decision about which foreign markets to enter.Business strategy Companies might globalize production or "back office" operations while maintain multiple local brands. 2. Conceptually. Economic conditions. Regional marketing strategies focusing on Europe. Often a coupon. distributors` brands and generic products. with pan-European strategies standing out as the first real regional marketing strategies created because of the run up to the European Union integration. price special or a desire for variety will influence the purchase decision. political-legal factors. demographic factors and trade agreement. More consumers have been selecting products from among manufacturers` brands. companies have several choices to make: first.

on the other hand. often requiring a tradeoff between product expansion and geographic expansion strategies. 2. Resolving this question is necessary to achieve a concentration of resources and efforts in areas where they will bring the most return. we have the broad-based firm marketing a wide range of products to many different customer groups. The second dimension is concerned with the range of a firm`s product and service offerings. we have the narrowly-based firm marketing a limited range of products to a homogenous customer group around the world. Both types of companies can be successful in their respective markets.6.Business strategy 2. doing this in most major markets around the world? Even some of the largest companies cannot pursue all available initiatives. Resources for most companies are limited.1 Formulating Global Focus Strategies Geographic extension is one of two key dimensions in the strategy of an international company. To what extent should a company become a supplier of a wide range of products aimed at several or many market segments? Should a company become the global specialist in a certain area by satisfying one or a small number of target segments.6.2 Creating Global Business Units Many firms have come to realize that a strong global presence in one given product was becoming a strategic requirement. both domestic and overseas. We can distinguish between two models: on the one hand. Since traditional multinational firms often competing through a multi-domestic strategy have realized the 15 .

many firms have begun to adopt the narrow focus model by spinning off business no longer viewed as part of the company`s core operations. 16 . Avoiding globally unfocused strategies. A strategy of complete globalization is selected by firms that essentially globalize all of their business units. Selective globalization is adopted by firms that globalize several or many businesses but also exit from others because financial resources may be limited. selective globalization or complete globalization. Many are striving to change their business to reflect more a coherent market position whereby a business consists of strong units in major markets. In general.Business strategy weakness of their unfocused patterns of global coverage. Since the establishment of strong global marketing positions requires substantial resources. Global niche strategies are selected by firms that focus on one or very few businesses worldwide and exit from others to make up for a lack of resources. they have begun to assemble business units that have a better global focus. companies with a narrow product or business focus but globally marketed perform better than firms with a broad product line. international firms have either retrenched to become regional specialists or changed their business focus to adopt global niche strategies.

thus allowing a company to unfold its strategy along similar paths in country by country.1 Integrated Global Marketing Strategy When a company pursues an integrated global marketing strategy. In the early phases of development.Business strategy 2. A more common approach is for a company to globalize its product strategy (product lines. offering the same marketing strategy across the globe. One company that fits the description of an integrated global marketing strategy to a large degree is Coca-Cola. many other types of global marketing strategies became apparent. product designs and brand names) and localize distribution and marketing communication. Some of those were much less complicated and exposed a smaller aspect of a marketing strategy to globalization.7. As marketers gained more experience. 2. It also assumes that the way a given industry works is highly similar everywhere. global marketing strategies were assumed to be of one type only. most elements of the marketing strategy have been globalized.7 The Term of Global Marketing Strategies A global marketing strategy that totally globalizes all marketing activities is not always achievable or desirable (differentiated globalization). Such a strategy may be advisable for companies that face completely globalized customers along the lines. consistent and integrated 17 . Globalization includes not only the product but also the communications strategy. That company has achieved a coherent. pricing and distribution as well as such strategic elements as segmentation and positioning.

advertising and more. That strategy works best if there are significant differences across markets and when few segments are present in market after market.7. each may be tailored to specific industry and competitive circumstances. advertising and branding according to local market requirements. Companies competing in the multi-domestic mode are frequently applying the global category strategy and leveraging knowledge across markets without pursuing standardization. Selecting the form of global product category implies that the company while staying within that category will consider targeting different segments in each category or varying the product.Business strategy global marketing strategy that covers almost all elements of its marketing program from segmentation to positioning.have been 18 . bottling. there are many other types of partially globalized marketing strategies. Reality tells us that completely integrated global marketing strategies will continue to be the exception.2 Global Product Category Strategy Possibly the least integrated type of global marketing strategy is the global product category strategy. distribution. branding. Several traditional multinational players who had for decades pursued a multidomestic marketing approach-tailoring marketing strategies to local market conditions and assigning management to local management teams. However. Leverage is gained from competing in the same category country after country and may come in the form of product technology or development costs. 2.

promotion.4 Global Marketing Mix Element Strategies These strategies pursue globalization along individual marketing mix elements such as pricing. communications or product. brands or advertising although some standardization is expected. the most important ones are global product strategies.7. three large international consumer goods companies doing business in food and household goods. Unilever and Procter & Gamble.Business strategy moving toward the global category strategy. In both consumer and industrial industries significant knowledge is accumulated when a company gains in-depth understanding of a niche or segment. 2. global advertising strategies and global branding strategies. The choices may consist of competing always in the upper or middle segment of a given consumer market or for a particular technical application in an industrial segment.7. They are partially globalized strategies that allow a company that customize other aspects of its marketing strategy. distribution. The company may develop an understanding of its customer base and leverage that experience around the world. place. Segment strategies are relatively new to global marketing. Although various types of strategies may apply. A pure global segment strategy will even allow for different products.3 Global Segment Strategy A company that decides to target the same segment in many countries is following a global segment strategy. 2. Typically companies 19 . Among them are Nestle.

6 Global Branding Strategies Global branding strategies consist of using the same brand name or logo worldwide.Business strategy globalize those marketing mix elements that are subject to particularly strong global logic forces.7. expected features and required product functions be largely identical so that few variations or changes are needed. key aspects or modules may in fact be globalized. because the launching of new brands requires a considerable marketing investment. which will make the original investment easier to justify. Global branding strategies tend to be 20 . Another firm facing strong global information logic will find it important to globalize its communications strategy. 2. Although the product may not need to be completely standardized worldwide.5 Global Product Strategy Pursuing a global product strategy implies that a company has largely globalized its product offering. Global product strategies require that product use conditions. 2. Companies want to leverage the creation of such brand names across many markets. A company facing strong global purchasing logic may globalize its account management practices or its pricing strategy.7. Companies pursuing a global product strategy are interested in leveraging the fact that all investments for producing and developing a given product have already been made. Global strategies will yield more volume.

These local brands have their own distinctive market and a company may find it counterproductive to change those names. However.Business strategy advisable if the target customers travel across country borders and will be exposed to products elsewhere. 2.7. Global branding allows a company to take advantage of such existing goodwill. the company may want to leverage a certain theme or advertising approach that may have been developed as a result of 21 . Many global firms have made acquisitions in other countries resulting in a number of local brands. Instead. a company may want to use different brand names partly for historic purposes. Global branding strategies also become important if target customers are exposed to advertising worldwide. This is often the case for industrial marketing customers who may read industry and trade journals from other countries. Even in some markets such as Eastern Europe. Companies pursuing global branding strategies may include luxury product marketers who typically face a large fixed investment for the worldwide promotion of a product. Increasingly.7 Global Advertising Strategy Globalized advertising is generally associated with the use of the same brand name across the world. global branding has become important also for consumer products where cross-border advertising through international TV channels has become common. many consumers had become aware of brands offered in Western Europe before the liberalization of the economies in the early 1990s.

9 Marketing targeting strategy The purpose of the marketing targeting strategy is to select the people or organizations that management wishes to serve in the product market.7.7. that few companies consistently adhere to only one single strategy. 2. 2. Once the purchasing reason has been determined as similar. however. the targeting strategy is selected.8 Composite Global Marketing Strategy The above descriptions of the various global marketing models give the distinct impression that companies might be using one or the other generic strategy exclusively. Global advertising themes are most advisable when a firm may market to customers seeking similar benefits across the world.Business strategy some global customer research. The targeting decision 22 . Reality shows. Many firms are a mixture of different approaches. The objective is to find the best match between the value requirements of each segment and the organization’s distinctive capabilities. a common theme may be created to address it. the market target is usually one or more segments of the product market. When buyers needs and wants vary. thus the term composite. More often companies adopt several generic global strategies and run them in parallel. Once the segments are identified and their relative importance to the firm determined. A company might for one part of its business follow a global brand strategy while at the same time running local brands in other parts.

the strategies and tactics used to gain a favorable position are called the marketing mix or the marketing program. and customer satisfaction. 9th edition of Marketing Management. customer retention. the firm’s size compared to competition. 2. the diversity of buyers needs and preferences.7. value-chain. price. Marketing objectives may also be set for the entire business unit and for specific marketing activities such as advertising. and the volume of sales required to achieve favorable financial results.‖( Philip Kotler. It is the act of designing the company's offering and identity (that will create a planned image) so that they occupy a meaningful and distinct competitive position in the target customer's minds.10 Positioning strategy The marketing program positioning strategy is the combination of product. ―Positioning is the result of differentiation decisions.Business strategy is the focal point of marketing strategy since targeting guides the setting of objectives and developing a positioning strategy. The targeting strategy may be influenced by the market’s maturity . profit contribution.) 23 . Deciding the objectives for each market target will be determined by management. corporate resources and priorities. and promotion strategies a firm uses to position itself against its key competitors in meeting the needs and wants of the market target. market share. Examples of market target objectives are desired levels of sales. The options range from targeting is one or few segments in a product market.

they often become inflexible after several successful market entries and tend to stay with standard approaches when flexibility is called for. the global firm is often a more potent competitor for a local company. Although global firms have superior resources. One of the longest running battles in global competition is the fight for market dominance between Coca-Cola and PepsiCo. The second. there are a number of heated global marketing duels in which two firms compete with each other across the entire global chessboard.a situation frequently faced in many markets. local competitors in some markets can take advantage of such advance notice by building defenses or launching a preemptive attack on the same segment.8 Competitive Global Marketing Strategies Two types of approaches emerge as of particular interest to us. June. game pits a global company versus a local company. 24 . Consequently. the global firms` strongest local competitors are those who watch global firms carefully and learn from their moves in other countries. the world`s largest soft drink companies. First. Global firms are able to leverage their experience and market position in one market for the benefit of another. business plan. 2008) 2. With some global firms requiring several years before a product is introduced in all markets.Business strategy For example in FedEx positioning strategy are ―The fastest air-freight company handling every process from shipper’s dock to consignee’s door‖ (Federal Express Corporation. In general.

0 Ownership Strategies Companies entering foreign markets have to decide on more than the most suitable entry strategy. with some companies accepting either a minority or majority position. If an international firm 25 .1 Joint Ventures In a joint venture. In most cases. Tellis ( Drivers of Success for Market Entry into China and India) say that joint venture is shared ownership of an entity located in a host nation by two partners-one located in the home nation and the other located in the host nation. once a joint venture partner secures part of the operation. or more recently in strategic alliance. the foreign company invites an outside partner to share stock ownership in the new unit. They also need to arrange ownership. international firms prefer wholly owned subsidiaries for reasons of control. an investing firm owns roughly 25 to 75 percent of a foreign firm. in a joint venture. The particular participation of the partners may vary. Under a joint venture (JV) arrangement. Joseph Johnson & Gerard J. which sometimes lead to inefficiencies and disputes over responsibility for the venture. 3. allowing the investing firm to affect management decisions of the foreign firm. the international firm can no longer function independently. either as a wholly owned subsidiary.Business strategy 3.

it is apparent that the future will bring many more joint ventures. Sometimes. joint ventures are common because they offer important advantages to the foreign firm. the JV partner may have important skills or contacts of value to the international firm. Problems may also arise when the JV partner wants to maximize dividend payout instead of reinvestment or when the capital of the JV has to be increased and one side is unable to raise the required funds. the partner may be an important customer who is willing to contract for a portion of the new unit`s output in return for an equity participation. Despite the potential for problems. But. the only viable access to be gained will be through JVs. Furthermore.Business strategy has strictly defined operating procedures. In other cases. By bringing in a partner the company can share the risk for a new venture. the partner may represent important local business interests with excellent contacts to the government. not all joint ventures are successful and fulfill their partners` expectations. Many international firms have entered Japan. getting the JV company to accept the same methods of operation may be difficult. such as for budgeting. A firm with advanced product technology may also gain market access through the JV route by teaming up with companies that are prepared to distribute its products. China and Eastern Europe with JVs. Successful international and global firms will have to develop the skills and experience to manage JVs successfully often in different and difficult environmental circumstances. planning and marketing. Experience has shown that JVs can be successful if the partners share the same goals with one partner accepting primary responsibility for operations matters. Despite the difficulties involved. 26 . And in many markets.

technology transfers or production technology with each partner contributing a different element to the venture. Sometimes. 2005. ―The joining companies were quite complementary in geographic scope and skills.2 Strategic Alliances ―Agreement and collaboration between a firm in the home market with a firm located in a host nation to share activities in the host nation. and was strong in Europe and Latin America. Tellis∗ Drivers of Success for Market Entry into China and India) A more recent phenomenon is the development of a range of strategic alliances. each partner brings a particular skill or resource-usually they are complementary-and by joining forces. two entire firms pool their resources directly in a collaboration that goes beyond the limits of a joint venture. Alliances are different from traditional joint ventures in which two partners contribute a fixed amount of resources and the venture develops on its own. Although a new entity may be formed. Alliances can be in the forms of technology-based alliances. Nissan was an engineering powerhouse with a strong market presence in Japan. each expects to profit from the other`s experience. Typically. 27 .European School of management and Technology. alliances involve either distribution access.Business strategy 3. North America and Asia‖ ( Piero Morosini. Renault has flair for marketing and design. the alliance is supported by some equity acquisition of one or both of the partners. production-based alliances or distribution-based alliances. In an alliance.‖ from ( Joseph Johnson & Gerard J. it is not a requirement.) In an alliance.

Eventually such connections will result in the creation of new organizations out of the cooperating parts of the partners. 3. Most recently even unfriendly takeovers in 28 .Business strategy Although many alliances have been forged in a large number of industries. making the acquisition of publicly traded companies much easier. In particular. Experience suggests that alliances with two equal partners are more difficult to manage than those with a dominant partner. This trend has probably been aided by the opening of many financial markets. Predicting what the goals and incentives of the various parties will be under various circumstances is a critical part of effective planning. The challenge in making an alliance work lies in the creation of multiple layers of connections or webs that reach across the partner organizations.3 Entering Markets through Mergers and Acquisitions Although international firms have always made acquisitions. Furthermore. alliances may very well be just an intermediate stage until a new company can be formed or until the dominant partner assumes control. such as between western and Japanese firms. the evidence is not yet in as to whether these alliances will actually become successful business ventures. it is important to recognize that the needs and aspirations of partners may change over the life of an alliance and do so in divergent ways. the need to enter markets more quickly than through building a base from scratch or entering some type of collaboration has made the acquisition route extremely attractive. many observers question the value of entering alliances with technological competitors. In that sense.

All other decisions made 29 . international mergers and acquisitions are difficult to make work. acquisitions pose a number of other challenges. This plan needs to include the company’s long-term goals. an understanding of the marketplace. a firm does not have to take the time to establish its presence or develop for itself the resources it does not already possess. Acquiring an existing firm also takes a potential competitor out of the market. acquisitions can have serious drawbacks. A major advantage of acquisitions is that they can quickly position a firm in a new business. First and foremost. 4. By purchasing an existing player.Business strategy foreign markets are now possible. a company must have a long-range plan.0 Operations Strategy and Competitiveness To maintain a competitive position in the marketplace. Integrating an acquired company into a corporation is probably one of the most challenging tasks confronting top management. only some of which are of interest to the acquirer. and a way to differentiate itself from its competitors. either in real terms or in management time. acquisitions can be a very expensive way to enter a market. Despite these advantages. Disposing of unwanted assets or maintaining them in the portfolio is often done at significant cost. a number of acquisitions fail on another account: the post acquisition integration process fails. Nevertheless. Although these obstacles are serious. This can be particularly important when the critical resources are difficult to imitate or accumulate. Most targets contain bundles of assets and capabilities. In addition to the likelihood of overbidding.

Business strategy by the company must support this long-range plan. the team prepares a game strategy. the role of everyone in the company is to do his or her job in a way that supports the business strategy. The first is Southwest Airlines. each person in the company would pursue goals that he or she considered important. designed to provide and sustain shareholder value. 4. but with very different business strategies. The same is true of a business. such as operations. For a company to succeed. Each player on the team must perform a particular role to support this strategy. A successful football team is a unified group of players using their individual skills in support of a winning strategy. The functioning of a football team on the field is similar to the functioning of a business and provides a good example of the importance of a plan or vision. Just as the players on a football team support the team’s strategy. Certainly the team’s chance of winning would not be very high. Let’s look at two companies operating in the same industry. Operations strategy is a long-range plan for the operations function that specifies the design and use of resources to support the business strategy. the business strategy must be supported by each of the individual business functions. Before the plays are made.1 The Relationship between Business Strategy and Operations Strategy Business strategy is the long-range plan of a business. finance. The strategy is a ―game plan‖ designed so that the team can win. Imagine what would occur if individual players decided to do plays that they thought were appropriate. and marketing. Otherwise. To 30 . which has a strategy to compete on cost. and the company would quickly fall apart. Southwest offers low-cost services aimed at price-sensitive customers.

The second company is Singapore Airlines. and even the biggest bed in business class called the ―space bed. meals prepared by gourmet chefs. every aspect of Southwest’s operation is focused on cutting costs out of the system. We conclude with a discussion of productivity. complimentary headsets. which has a strategy to compete on service. Operations strategy specifies the policies and plans for using the organization’s resources to support its long-term competitive strategy. comfortable cabins. and ways in which the operations function can best support the business strategy. In this chapter we discuss the role of operations strategy. their operations decisions are different because of their different business strategies. one measure of a company’s competitiveness. Internet-based. Operations strategy is the plan that 31 .2 The Role of Operation Strategy The role of operations strategy is to provide a plan for the operations function so that it can make the best use of its resources. and global marketplace. 4. The operations function is responsible for managing the resources needed to produce the company’s goods and services.Business strategy support this strategy. Later in this chapter we will look at specific operations decisions that Southwest has made to achieve this. its relationship with the business strategy. Although they are in the same industry. To support this strategy the airline offers free drinks. it is important for companies to have a clear plan for achieving their goals.‖ Both airlines began as regional carriers and each has grown to be a highly successful major airline. In today’s highly competitive.

size. In order to the situation of reconstruction the company can decide to use this money to develop other marketing activities. This includes the location. June. For example. the marketing can include market research and strategic planning” (Federal Express Corporation. special equipment. the business strategy of FedEx. use of technology. FedEx acquired its own fleet of airplanes. $ 7 million was to be used to complete the purchase and modification of aircraft. worker skills and talents required. and quality control methods. “Federal Express strategy is to use the $52 million efficiently. special processes needed. is to compete on time and dependability of deliveries. FedEx invested in a sophisticated bar code technology to track all packages. a training “simulator” and sundry other items. business plan. and type of facilities available. Over 37 million was required to service and refinance existing debt commitments. 2008) 32 . and $ 5 million was needed to increase working capital. in addition to advertising and pricing. The operations strategy of FedEx developed a plan for resources to support its business strategy. The remainder was to be used to purchase engines.Business strategy specifies the design and use of resources to support the business strategy. To provide dependability of deliveries. the world’s largest provider of expedited delivery services. The operations strategy must be aligned with the company’s business strategy and enable the company to achieve its long-term plan. To provide speed of delivery.

Business strategy 4. However. and U. It became clear that Japanese companies were more competitive because of their operations strategy. There were no serious international competitors. The role of operations strategy is to make sure that all the tasks performed by the operations function are the right tasks. Unfortunately. it took time to really understand Japanese approaches. The difference between operational efficiency and strategy is that Operational efficiency is performing operations tasks well. all their resources were specifically designed to directly support the company’s overall strategic plan. companies lost market share to their Japanese counterparts. companies could pretty much sell anything they produced. that changed in the 1970s and 1980s.S. Consider a software company that recently invested millions of dollars in developing software with features not provided by competitors.S. even better than competitors. It is defining in what race you will win.S.S. Operational efficiency and strategy must be aligned. otherwise you may be very efficiently performing the wrong task. Companies emphasized mass production of standard product designs. merely copying these approaches often proved unsuccessful. many U. and U. 33 . that is. companies copied Japanese approaches. Strategy. is a plan for competing in the marketplace. In an attempt to survive. Japanese companies began offering products of superior quality at lower cost.3 The Important of Operation Strategy Operations strategy did not come to the forefront until the 1970s. only to discover that these were features customers did not particularly want. on the other hand. Up to that time U.

materials.Business strategy 4. such as costs of labor. This will provide a plan for the design and management of the operations function in ways that support the business strategy. These capabilities are called competitive priorities.4. The operations strategy relates the business strategy to the operations function.1 Cost Competing Cost Competing based on cost means offering a product at a low price relative to the prices of competing products. There are four broad categories of competitive priorities: 4. The need for this type of competition emerges from the business strategy.4 Developing An Operation Strategy Once a business strategy has been developed. It focuses on specific capabilities of the operation that give the company a competitive edge. Figure 1: Southwest Airlines Company 34 . an operations strategy must be formulated. the operations function must focus primarily on cutting costs in the system. The role of the operations strategy is to develop a plan for to develop this competitive priority. and facilities.

Employees are trained to perform many functions and use a team approach to maximize customer service.Business strategy A company that successfully competes on cost is Southwest Airlines. 35 . Facilities are streamlined: only one type of aircraft is used. high durability. and flight routes are generally short. The second dimension is goods and services consistency. southwest has been a model for the airline industry for a number of years. Because of this strategy. and many administrative costs.4. A strong example of product consistency is McDonald’s. close tolerances. maintenance. printed boarding passes.2 Quality as a Competitive Priority Quality as a competitive priority has two dimensions. Southwest’s entire operations function is designed to support this strategy. The first is highperformance design. This means that the operations function will be designed to focus on aspects of quality such as superior features. Companies that compete on quality must deliver not only highperformance design but goods and services consistency as well. 4. or seat assignments. where we know we can get the same product every time at any location. This serves to minimize costs of scheduling crew changes. which measure show often the goods or services meet the exact design specifications. and excellent customer service. Unnecessary costs are completely eliminated: there are no meals. inventories of parts.

3 Time or Speed Time or speed is one of the most important competitive priorities today. such as college students who are willing to work a few hours at night. Companies in all industries are competing to deliver high-quality products in as short a time as possible. Lens Crafters.Business strategy 4. Today’s customers don’t want to wait. the operation function had to be designed to promote speed.4. This allows FedEx to cover workforce requirements during peak periods without having to schedule full-time workers. FedEx can call on this part-time workforce at a moment’s notice. Bar code technology is used to speed up processing and handling. United Parcel Service(UPS). Companies like FedEx. 36 . and companies that can meet their need for fast service are becoming leaders in their industries. and the company uses its own fleet of airplanes. FedEx relies on a very flexible part-time workforce. providing the company with a great deal of flexibility. positively‖ deliver packages on time. and Dell compete based on time. To support this strategy. Figure 2: FedEx Corporation FedEx is an example of a company that competes based on time. The company’s claim is to ―absolutely.

Another aspect of flexibility is volume flexibility which the ability to rapidly increase or decrease the amount produced in order to accommodate changes in the demand. For example. Similarly. consider a company that competes on using the highest quality component parts in its products. the ability to readily accommodate these changes can be a winning strategy.5 The Need for Trade-Offs The operation function must place emphasis on those priorities that directly support the business strategy.Business strategy 4. a company that competes on making each product individually based on customer specifications will likely not be able to compete on speed. Here. the company has made a tradeoff between quality and price. In this case. One is product flexibility which the ability to offer a wide variety of goods or services and customize them to the unique needs of clients.4 Flexibility Flexibility as a company’s environment changes rapidly. 4. It is important to know that every business must achieve a basic level of each of 37 . the trade-off has been made between flexibility and speed. There are two dimensions of flexibility. Therefore.4. A flexible system can quickly add new products that may be important to customers or easily drop a product that is not doing well. it needs to make trade-offs between the different priorities. Due to the high quality of parts the company may not be able to offer the final product at the lowest price. including customer needs and expectations.

Then by the 1980s American manufacturers were able to raise their level 38 . companies then have to change their order winners to differentiate themselves. even though its primary focus is only on some. For example. are the competitive priorities that help a company win orders in the market. otherwise. it still has to produce its product within a reasonable amount of time. An excellent example of this occurred in the auto industry. on the other hand. The result is that the order winner becomes an industry standard. Order winners. customers will not be willing to wait for it. To compete successfully. or an order qualifier. the order winning criterion in the American auto industry was price. Similarly. 4.Business strategy the priorities. other companies follow suit over time. Then the Japanese automobile manufacturers entered the market competing on quality at a reasonable price. it still cannot offer its products at such a high price that customers would not want to pay for them. The result was that quality became the new order winner and price became an order qualifier. It is important to understand that order winners and order qualifiers change over time.6 Order Winners and Qualifiers Order qualifiers are those competitive priorities that a company has to meet if it wants to do business in a particular market. or an expectation. even though accompany is not competing on low price. even though a company is not competing on time. Often when one company in a market is successfully competing using a particular order winner. Prior to the 1970s.

7 Translating Competitive Priorities into Production Requirements Operations strategy makes the needs of the business strategy specific to the operations function by focusing on the right competitive priorities. Quality then became an order qualifier. that is. Together. such as characteristics of facilities used. 4.  Structure—Operations decisions related to the design of the production process. it will set forth specific operations requirements. the skills and pay approaches. a plan is developed to support those priorities.Business strategy of quality to be competitive with the Japanese.  Infrastructure—Operations decisions related to the planning and control systems of the operation. and the flow of goods and services through 39 . The structure and infrastructure of the production process must be aligned to enable the company to pursue its long-term of workers. and quality control technology. the structure and infrastructure of the production process determine the nature of the company’s operations function. These can be broken down into two categories. The operations strategy will specify the design and use of the organization’s resources. such as the organization of the operations function. selection of appropriate the facility. Once the competitive priorities have been identified. as everyone had the same quality standard.

A certain level of order qualifiers must be achieved just to remain in the market. Suppose we determined that time or speed of delivery is the order winner in the marketplace and the competitive priority we need to focus on. We would then design the production process to promote speedy product delivery. Highly successful firms develop a business strategy that takes advantage of their core competencies or strengths. the company’s managers must know the competencies of their organization. Core competencies could include special skills of workers. such as expertise in providing customized services or knowledge of information technology.Business strategy plan. Rather. The Issue is not one of focusing on one priority to the exclusion of the others. The important thing is that every aspect of production of a product or delivery of a service needs to focus on supporting the competitive priority.8 Core Competencies Core competencies help define a business strategy is an understanding of the company’s strengths. a company must compete in markets where its core competencies will have value. This might mean having a system that does not necessarily produce the product at the absolutely lowest cost. In order to formulate a long-term plan. Another example might be flexible facilities that can handle the production of a wide array of products. possibly because we need costlier or extra equipment to help us focus on speed. it is a matter of degree. To be successful. However. Think of a student developing plans for a successful 40 . 4. we cannot neglect the other competitive priorities.

0 Global Human Resources Strategy International human resources management (IHRM) is concerned with the development of human resources capabilities to meet the diverse needs of various subsidiaries of multinational and global corporations. train. Understanding the critical and unique issues involved in managing the human 41 .‖ (14 April 2010.Human Resource (HR) Management Strategy. pursuing a career in marketing would place the student at a disadvantage because of a relative lack of skills in persuasion. reflect on the balance of work between Geneva and the field. how organizations find employees and pay.Business strategy professional career. Taking advantage of core competencies would mean developing career strategy in which the student’s strengths could provide an advantage. On the other hand. such as engineering or computer science. develop and promote them varies in each subsidiary. clarify roles and responsibilities. These issues are complex. and develop a new set of competencies framework to deliver set objectives. In most cases. because they require a continuous link between corporate strategy and human resources management. Let’s say that this student is particularly good at mathematics but not as good in verbal communication and persuasion. 5. Each multinational and global organization has a different approach for managing its employees. ―The human resource strategic achievements in report have helped the new management team redefine business functions.) Management of human resources in multinational and global organizations differs greatly from that in domestic companies.

Dealing with the consequences of poor staffing decisions is one of the most depressing and frustrating aspects of international human resource management. and products and services is essential. 42 . especially with the realization that a more proactive involvement on the part of human resources could well have avoided the problem.1 Gaining Acceptance as a Business Partner Many international human resources involve new business development activities. human resources managers will never gain the credibility to be a key business partner and will be relegated to the role of an administrator trying to implement organization and staffing decisions that they have had no part in making. through understanding of the company’s business strategies. This knowledge are important because. competitive challengers. recruiting for key positions. The critical strategies global human resources challengers are gaining acceptance as a business partner. establishing new operations. developing compensations and benefits strategies and establishing and maintaining global ethics standards 5. It is to seen a solution finder rather than an obstacle to progress. It means volunteering to take responsibility for developing resources plan and solutions of staffing problem. It means orchestrating invitations to participate in international business planning meetings and then being seen as an active contributor. The important key is proactively. involvement in mergers and acquisitions.Business strategy resource issues of global operations is becoming an essential requirement for the career development of all ambitious human resources professionals.

Human resource managers are finding themselves being asked to help establish new operations not only in countries such as China. Business development executives frequently prefer to appoint their own candidates to manage international projects and operations. market their products. whether to source raw materials. The international human resources manager may work worldwide in company operations. Other emerging specialists include international human table‖ is generally resources managers. Mexico. and policy issues the event. their ―place at the assured. and as the translate cultural and international customs for North American staff. or find cheaper methods of manufacturing. but also in newly 43 . Human resource managers are often excluded from international merger and acquisitions until the deal has been concluded and after that then left to try to resolve a myriad of cultural.2 Establishing New Operations Even relatively small companies are now looking globally. will prepare staff members to work in various international operations. and Brazil. 5. who handle human resources issues related to a company's foreign operations. However. A second or multiple languages are a plus in the international human resources manager’s role. India.Business strategy The challenge in international business is not are easy one. organizational. once human resource managers have been able to prove their contribution to the international business development process is equally valuable to those of finance and marketing executives. they help place staff returning from overseas assignments.

5. For example. and the former Soviet Union republics. terms and conditions of employment all have to be put in place. Local recruitment efforts often are started before human resource policies and systems have been finalized. The first step is what is the timeline for establishing the new operations? The second step is what are the short and long term staffing requirements and the timeframe? The third step is what level of expertise and skills are required? The forth step is which positions will need to be filled immediately? The fifth step is what is the availability of suitable local candidates? The last step is which positions will required expatriates and short term assignees either for management control purposes or to provide the necessary technical and professional support. For establishing new country operations is invariably short time frame. Partners are often equals. on the other 44 . the DaimlerChrysler merger was supposed to be a merger between equals in its first stage.3 Involvement in International Mergers and Acquisitions A merger is the result of an agreement between two companies to join their operations together. Before the first local employee is hired payroll arrangements. the Philippines. The critical first step is establishing a comprehensive staffing plan for the new operation. compensation and benefits programs.Business strategy emerging economies such as Vietnam. An acquisition.

Second is the due diligence phase which focuses more in depth on analyzing the potential benefits of the merger. these phases will have different names. occurs when one company buys another company with the interest of controlling the activities of the combined operations. Depending on the publication. Recruitment is the process of attracting a pool of qualified applicants for available combinations. planning for the new company is carried out. product. 5. mergers and acquisitions are characterized by different phases. Third is in the integration planning phase.4 Recruiting for Key Positions Recruitment and selection are key process though which a multinational or global corporation brings new employees into its network.Business strategy hand. Here. However. and abilities of the selected employees match the requirement of the positions. the M&A process usually consists of the following steps: first is the pre-M&A phase including a screening of alternative partners based on an analysis of their strengths and weaknesses. tax regulations and also compatibility with respects to HR and cultural issues are of interest. which is based on the results of the due diligence phase. knowledge. 45 . Selection is the process of choosing qualified applicants from the available candidates and ensuring that the skills. The last is in the implementation phase plans are put into action. Typically.

key challenges. the following action steps are generally essential: first is invest enough time to understand the nature and scope of the business. The task of trying to find a well-qualified local candidate to fill. Being asked to recruit candidates to fill top executive international positions is a high risk proposition for any HR manager. Once the search process is underway. and target compensation level with the senior executives to whom the position will report. candidate profile. For the HR manager. the HR manager needs to play a proactive ongoing role in the process. As a result. as well as short and long term objectives. suitable candidates may turn out to be few and far between and potential candidates may be very reluctant to change companies. Second is develop a comprehensive position description. Third is engage an international search firm that can demonstrate extensive experience in the country and industry involved. being able to network and share market intelligence with other multinationals operating in the same countries is one of the essential job requirements of international human resource managers. which can be particularly challenging in lesser developed countries. It is not enough just to commission a search firm and wait for them to produce a short list of hopefully suitable candidates. Depending on the country and the industry. for example. a general manager position for an international subsidiary can be a daunting one. 46 .Business strategy Recruitment of qualified local staff frequently necessitates being able to identify reliable recruitment agencies. The last is require the search firm to prepare a realistic assessment of the potential availability of suitable candidates.

First. a firm seeks to satisfy several objectives.5 Developing Compensation and Benefits Strategies When developing international compensation policies. the employee will expert the policy to offer financial protection in terms of benefits. The area of international compensation is complex primarily because multinationals must cater to three categories of employees: PCNs. Third. education of children and recreation to be address in the policy. the policy must work to attract and retain staff in the areas where the multinational has the greatest needs and opportunities. Third. social security and living costs in the foreign location. Thus.Business strategy 5. the employee will expect a foreign assignment to offer opportunities for financial advancement through income. the policy must be competitive and recognize factors such as incentive for Foreign Service. First. TCNs and HCNs. The international employee will also have a number of objectives that needs to be achieved from the firm’s compensations policy. Second. the policy should be consistent with the overall strategy. structure and business needs of the multinational. Second. 47 . the employee will expect issues such as housing. tax equalization and reimbursement for reasonable costs. the policy should facilitate the transfer of international employees in the most costeffective manner for the firm. Fourth the policy must give due consideration to equity and ease of administration.

including any international operations. It is much easier to be proactive in this regard than have to deal with a series of embarrassing precedents later.Business strategy However. Company culture. third type is prohibition on political contributions. even at earliest stages of establishing international operations. specifying who to contact internally in the event of any question.6 Establishing and Maintaining Global Ethics Standard If no specific policy dealing with business ethics exists. it is crucial to develop one and to make sure it is widely communicated across the organization. it is important to establish an agreed compensation philosophy and strategy. the next type is approval procedures for payment and the last type is maintenance and retention of record. 5. fourth type is guidelines regarding ―facilitating payments‖ the fifth type is authorization procedures for transactions and disposition of assets. and financial considerations are all factors that need to be taken into consideration. competitive pressures in different industries and markets. These are the types of issues that the policy needs to address: first type is it need for employees to comply all applicable laws and regulations. compensation and benefits challenges and the philosophies and strategies needed to address them will clearly vary considerably between companies. However. 48 . second type is prohibition on payments to public officials.

The company should know more about marketing strategy because with that strategy there will learn a lot of thing that can gain the company profit. Global strategy also have their own way to add network worldwide so that all products marketed to grow more rapidly because the products have been previously known to the world. They should know how the strategy that they need to ensure that production operation will not affected for example find the specialist worker and increase and change the equipment to make the operation become smooth. Besides that. With 49 . The last strategy is a multi-domestic strategy. the strategy needed to market our products in other countries to compete with other products because each country has different companies competing for their respective products. This is to protect the good name of the company from a secret known to the outside. For each company there also have to implement their strategy to achieve profitability of the company. the company also will share their profit and increase the sale of that product. The company also should give attention to the operation strategy. Human resources strategy is the method that company use to take care the worker. In the other hand. With this co-operation the company not only share their resources but there also sharing the idea to produce high quality goods that can compete to the other product at the market. Human resources will keep working and looking for workers who can bear a great responsibility to the company.0 Conclusion Business strategy is a long term plan of action designed to achieve a particular goal or set of goals or objectives. For the alliances strategy shows that how important co-operation between the company to produce a good thing for the user.Business strategy 6. it also will help the company penetrate to the other country to export their product for a long term not only for a short term.

50 .Business strategy all the combination of the strategy will automatically provide benefits to the company as well to join forces to introduce a product that can smell adopted by the community.

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