Strategic Management

By: Naseer Ahmed

 Strategies
For
Competing
in
Globalizing Markets
 ‘You have no choice but to
operate in a world shaped by
Globalization and the
information revolution. There are
two options Adapt or Die’
Andrew S. Grove. Chairman, Intel
Why Companies expand

into foreign markets ?

• To gain access to new customers
• To achieve the lower cost and enhance the
firm’s competitiveness
• To capitalize on its core competencies
e.g. Nokia
• To spread its business risk across a wider
market base
 International
or Multinational
Competes in a select few
foreign markets.
 Global Competitor
When it has or pursuing a
market presence on most
continents and in virtually all of the
world’s major companies.
 Strategy Options
For

Entering and
Competing in Foreign Markets
1. Maintain a national (one
country) production base and export
goods to foreign markets
utilizing either company
owned or foreign controlled
forward distribution channels.
2. License foreign firms to
use the company’s technology or
produce and distribute the company’s
product.
3. Employ a
franchising strategy
4. Follow a multi- country
strategy, varying the company’s
strategic approach.
5. Follow a global
strategy using the same competitive
strategy approach in all country
markets where the company has a
presence.
6. Use strategic alliances or
joint ventures with foreign
companies as the primary venture
for entering foreign markets.
Strategic
Alliances
 Strategic Alliances are more
effective in helping establish a
beachhead of new opportunities in world
achieving and
markets than in

sustaining global leadership.

 1. Picking a good partner
2. Being sensitive to cultural
differences.
3. Recognizing that alliance must benefit
both sides.
4. Ensuring that both parties live up to
their commitments.

5. Structuring the decision making

process so that actions can be taken swiftly
when needed.
5. Managing the learning
process and then adjusting the
alliance agreement overtime to fit
new circumstances.
Strategy Options
For Local Companies in
competing
Against
Global Challenge
 Dodge Rivals by Contend on
shifting to a new
High
Business Model or Global Level
Market Niche

Industry
Pressures to Defend by Using Home
Globalize Transfer Company
Field Advantages.
Bajaj Auto Vs Honda Expertise to Cross
Maintained 70% share Border Markets
Low Cost, Durable, Easy
Low maintenance

Tailored for Home Market Transferable to other

Countries

Resource and Competitive Capabilities

Global Vision
In this era of open market economy
business has indeed become global.
Even if you belong to a small
business in Bangladesh, you may
find that you cannot remain aloof
from the rest of the world.
Business thinkers now believe
that globalization is not just doing
business in a number of countries
around the world. It is more than
that.
It involves balancing the global
qualities of your product and service
and the unique needs of local
customers. Thus an ideal global
company is both a low-cost producer
and customer driven.
It balances global
consistency with the local diversity.
It has a flexible product and service
offer that allows for a high level of
customization.
It cansupport both
global and local customers with
balanced distribution channels
and networks.
 There are generally six
strategies steps- as per business Gurus-
one must take during the initial days of
globalization.
1. Creating clarity of vision
and mindset.

2. Knowing the global customers

well.
3. Understanding the global balance
and constantly adjusting it.

4. Moving from isolation to

partnership
5. Nurturing global employees
6. Using information technology
to keep capabilities high and costs
low.
In the context global
of
outlook companies must move
from an industrial perspective to
an information age perspective.
Canon of Japan, the world famous office
automation products company, uses the

word ‘Kyosei’- meaning

mutually rewarding
coexistence its key word for
globalization.
 It crystallizes the global vision in
‘technology for
words such as

people’, ‘unity is
diversity’ and ‘borderless
contribution’.
Knowing the customer well is very
important in the context of
globalization.
 When Akio Morita of Sony
entered the US consumer
electronics markets in the ‘60s,
he decided that:
‘I had to get to know the country
better, to know how Americans
lived and thought. Our company
had to become a citizen of the
world and a good citizen in each
country we did business in’.
Successful companies attempting to
go global identify that strategic alliance

fill in the gaps in their

partners

basic capabilities.
Sony has positioned itself to satisfy
the demands of future customers by
assembling a powerful array of
hardware and software capabilities
from different parts of the world to
offer integrated products and
services.
 highly
Thus, with a

integrated global business

vision, Sony acquired CBS records and
Columbia pictures.
A company with networks built on trust

allows more people to make

decisions and does everything
faster.
Companies expanding in EU countries or in Asia
Pacific are learning how to empower
executives for quick decisions. In line with this, to
give its managers a

global mindset.
Samsung chairman Lee Kun Hee stresses
‘Now
to his managers in the meetings,

you must change except

your wife and children’.
The age of globalization calls for
quality management and quality
management can be materialized
only through upgrading the whole system –
products, people and management.
 With proper utilization of information
technology and techniques of modern business, this
is

highly achievable.
 
Thank You
Very Much