Managers must be conscious that markets, supplies, investors, locations, partners, and competitors can be anywhere in the world. Successful businesses will take advantage of opportunities wherever they are and will be prepared for downfalls. Evidently, successful managers, in this environment, need to understand the similarities and differences across national boundaries, in order to utilize the opportunities and deal with the potential downfalls. In developing appropriate global strategies, managers need to take the benefits and drawbacks of globalization into account. A global strategy must be in the context of events around the globe, as well as those at home. International strategy is the continuous and comprehensive management technique designed to help companies operate and compete effectively across national boundaries. While companies’ top managers typically develop global strategies, they rely on all levels of management in order to implement these strategies successfully. The methods companies use to accomplish the goals of these strategies take a host of forms. For example, some companies form partnerships with companies in other countries, others acquire companies in other countries, others still develop products, services, and marketing campaigns designed to appeal to customers in other countries. Some rudimentary aspects of international strategies mirror domestic strategies in that companies must determine what products or services to sell, where and how to sell them, where and how they will produce or provide them, and how they will compete with other companies in the industry in accordance with company goals. The development of international strategies entails attention to other details that seldom, if ever, come into play in the domestic market. These other areas of concern stem from cultural, geographic, and political differences. Consequently, while a company only has to develop a strategy taking into account known governmental regulations, one language (generally), and one currency in a domestic market, it must consider and plan for different levels and kinds of governmental regulation, multiple currencies, and several languages in the global market
In the midst of global market tight business competition, models and concept analysis is crucial and vital. Thus, any business manager must discern and decide what’s the best move or course of action to be undertaken to outwit and win the market place and patrons. Several concept analysis are designed for managers to scrutinize business status to have an equilibrium and project sustainable competitive advantage among others in the field.
One of these types is SWOT Analysis. A good look at the internal and external environment is an indispensable part of strategic planning. Environmental attributes internal to the firm usually can be classified as strengths (S) or weaknesses (W),while those external to the firm can be classified as opportunities (O) or threats (T). This analysis is referred to as SWOT analysis. This analysis provides insights that are key in matching the firm’s assets and capacities vis-à-vis the competitive environment in which it exists. Therefore, it is crucial in strategy formulation and selection. What are strengths? The firm’s or company’s strengths are its assets, resources and capabilities that can be utilized as the foundation for mapping out a competitive edge. Some of these are patents, reputed brand names, established repute among customers, cost advantages, exclusive access to precious natural resources and favorable access to marketing outlets. Weakness is of course the opposite of strengths like lack of patent protection, a so-so brand name, ill-repute among customers, high price structure, lack of access to the best raw materials or natural resources, and worst, lack of access to strong distribution channels. Take the case in which a firm has a large amount of manufacturing capacity. While this ability may be considered as a strength that competitors do not share, it also may be a considered as a weakness if the large investment in manufacturing capacity hinders the firm from reacting quickly to shifts or fluctuations in the marketplace. Furthermore, opportunities may mean income and growth; like, a wanting in customer need, invention of new technologies, loosening of legal hindrances and lifting of international business hurdles. Moreover, threats are the present and intervening factors in the external environment; like changes in consumer tastes deviating from the firm’s product lines, introduction of rival products, new legalities and regulations, and further increase in trade barriers. Any company should not singly invest into very encouraging opportunities. Rather, it should have the caution and prescience to better understanding and analysis of a doable course of action to gain that competitive advantage – by determining a blend between the company’s strengths and upcoming opportunities. S-O strategies run after chances that are a good addition to the company’s strengths. W-O strategies fiscalize weaknesses to run after opportunities. S-T strategies map out ways that the firm can use its strengths to minimize its exposure to external threats. W-T strategies create a defensive plan to protect the firm’s weak spots from making it highly exposed to outside threats.
Another tool used to scan the environment in the business field is the PEST Analysis. This is a sophisticated external macro-environment probing that manifest how firm processing can be expressed in terms of the Political, Economic, Social, and Technological factors. Oftentimes, the acronym PEST (is made as “STEP”) is employed to describe a framework for the synthesis of macro-environmental factors. Political factors are government laws and legal issues and ascribe both formal and informal rules in which the firm must work – like tax policies, employment measures, environmental ordinances, trade barriers and taxes, and political instability. Economic factors include the purchasing power of prospective customers and the firm’s capital–like economic improvement, interest rates, exchange and inflation rates. Social factors involve the demographic and cultural facets of the outside macro-environment. These factors have direct effect on customer needs and the size of potential market bases like health consciousness, growth of population, age brackets, career paths, and consciousness on safety. Finally, technological factors can lower if not eliminate barriers to entry, cut the minimum efficient production stages, and highly affect outsourcing decisions; like, R&D activity, automation schemes, technological incentives, and rate of technological change.
In order to appraise, analyze and assess finished activities which will eventually create a company’s competitive edge, a chain of value-creating activities must be in place. Michael Porter outlined a set of many generic activities common to a wide range of firms. Accordingly, the objective of such activities is to foster worth that exceeds the cost of providing the product or service. In consequence, this will generate profits as customers want worth congruent to costs. Everyone wants worth as tantamount to price so such value-creating activities is a very good psychology applied to business. If only all businesses employ this action plan, then what a better consumer base they create and a whole lot happier people they would account in their following. Another concern tackles inbound logistics which embraces the receipt, warehousing, and inventory of company input and output materials; operations are the value-creating tasks that transform the inputs into the finished product or outcome; outbound logistics are responsible for the finished product to reach the customer, including but not limited to warehousing, delivery and the like. Marketing & sales are any efforts–tangible or not, direct or indirect, intentional or by chance-are those activities that have something to do with getting consumers to buy the product, channel selection, advertising, pricing, and much more. Service activities are those of maintenance and enhancing effect to the product value inclusive of customer support, repair services, etc. All of these vital activities are effective in developing company’s competitive advantage. Logistics, as we all know, are crucial and vital for a contracting company to to distribute services, while service activities are the main focus for a company that offers on-site maintenance contracts for office supplies and machines.
In addition, there are also at least four generic areas of support activities ensuring firm sustainability in the business shark-infested waters–among others, procurement, technology development, human resource management, and firm. Procurement entails the role of buying the raw materials and other essentials in the value-creating undertakings. Technology development includes studies and development, process machination, and other technology gadgets used to enhance the value-chain activities. Human Resource Management, are the tasks that include recruitment, enrichment, and just compensation of workers. Firm infrastructures are those activities of the finance, legal, quality, and management departments. Support activities are termed as “overhead” but some firms have sparingly used them to maintain a competitive advantage. For example, a company can do outreach works, medical missions, gift-giving to indigents, of renovation of a neglected public hospital. This can also take the forms of donating to a charity, to a depressed area because of typhoons, floods, or quake-shaken areas. These activities require definition, linkages, and coordination between and among partner companies, with the consent and knowledge of the customer base. Sufficient and effective media publishing through print, broadcast or satellite means can be employed to maximize efforts to establish such elusive state of company’s competitive edge. It is a matter of concerted effort, a must-have if companies have to outlive and outdo competitors. A perfect grasp of interdependence and mutual benefit must be clear to make all strategies work for the betterment of the organization. If support is not totally ensured, then at least, majority of suppliers, advertisers, as well as the general public are involved. If response is not favorable, then executives have to do some side stepping, even taking back alleys so the company’s goals will be served. If executives back out, then, what a pity to the organization. A company needs a sure-fire executive in the face of uncertainties. Hence, executives must see a rundown of these activities before implementation.
That is why there is what we call value system. Great companies have very strong value systems that new hires would either subscribe to it or leave it. There is simply no half-way house in these great companies. In exchange, they offer palatable salaries, fringes, and other opportunities of growth-monetary, career or physical growth.
In closing, strategies are useless unless acted upon, applied, or animated to make the company prosper side by side with competitive edge. With the fangs of globalization threatening to devour the weak and unprepared, executives of the 21st century has many assignments to do. These begin from mapping out a vision, a mission, then the strategies needed to make these dreams come into fruition. Gone were the days when companies would only wait for customers to take their products because of limited choice or monopoly. Today, more than any era of the past, business is very precarious and risky. Hard earned capitals are washed away overnight once investment is not done with caution, sustainability and competitive edge. Only those who have the edge would survive.