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Global Versus Adaptive Strategy

In: Business and Management

Submitted By samklchia
Words 2791
Pages 12
In today’s competitive context, the boundaries of the business contest have already expanded into the global arena. Hines (2000) identifies that this phenomenon is a result of “the ever-increasing integration of national economies into the global economy through trade and investment rules and privatization, aided by technological advances.” Globalisation facilitates a more liberated flow of trade across nations, expands economic freedom and spurs competition, thereby increasing the yield in the marketplace. As for developing countries, globalization offers access to foreign capital, increasing the involvement of multi-national conglomerates that capitalises on comparative advantage, enhances quality standards and facilitate the maximisation of their profits. (Hines, 2000)

As a result of global economic integration, international interdependence has increased the complexity level of enterprise management. It is imperative for organisations aspiring to sustain a competitive edge by expanding into other countries to determine the correct global strategy.

Uniform Global Strategy

Hill (2008) describes the globalisation strategy as organisations focused on “increasing profitability by reaping the cost reductions that come from experience curve effects and location economics”. Levitt (1983) commented that organisations aspiring to be competitive in the global arena should swing their focus from locally-customised products to globally uniform solutions that are practical, consistent, and economical. Product offerings and placement strategies are not customised to fit the local context as that would attribute to additional cost; they are marketed synonymously throughout all regions in the world.

Thompson and Strickland (2003) identified that in such a homogeneous global strategy, the operations are normally in geographical areas that present a high demand for...

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