Implementing Global Strategy

TABLE OF CONTENT Introduction..................................................................................................................................1 Firm Strategy:..............................................................................................................................2 Core Elements and Interactions of global Strategy......................................................................4 Competitive Strategy...............................................................................................................4 Diversification Strategy........................................................................................................... E!amples of Diversification Strategy...................................................................................... "lobal Strategic "estalts..........................................................................................................# Evolving Strategies for Firms in Emerging Economies..............................................................$ Conclusion.................................................................................................................................12 %ecommendations......................................................................................................................12 %eferences..................................................................................................................................14

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Introduction
"lobal Strategy is a shortened term that co ers three areas! global" multinational and international strategies# Essentially" these three areas re$er to those strategies designed to enable an organi%ation to achie e its ob&ecti e o$ international e'pansion# In developing global strategy" it is use$ul to distinguish bet(een three $orms o$ international e'pansion that arise $rom a company)s resources" capabilities and current international position# I$ the company is still mainly $ocused on its home mar*ets" then its strategies outside its home mar*ets can be seen as international# &'e marc' to(ard a true global economy is going for(ard at a ferocious pace. C'anges on t'e political landscape and at t'e tec'nological frontiers 'ave only en'anced t'is irreversible trend. So far) multinational enterprises *+,Es- seem to 'ave been t'e ma.or players in t'is drama put on a (orld stage for all to vie(. Certainly t'e +,Es en.oy a daunting array of advantages. &'ey possess) to name a fe() unmatc'able resources) enviable advantage based on economies of scale and scope) and ric' /no(ledge and s/ills ac0uired t'roug' t'eir operations over t'e years and in many diverse locations. In addition) considerable researc' attention 'as focused on global oriented strategies *1artlett 2 "'os'al) 1$$3- and t'ose for big businesses. 4t t'e same time) t'ere are many domestic companies t'roug'out t'e (orld t'at long to get a'ead in t'is competitive and dynamic global game. 5'ile domestic firms in developed economies) (it' considerable researc' insig'ts from sc'olars ('o study entrepreneurs'ip t'ere) mig't 'ave developed effective strategies to deal effectively (it' t'eir multinational counterparts *Sandvig 2 Cola/ley) 1$$3-) domestic companies in emerging economies are confronted (it' t'e uni0ue c'allenge of devising effective strategies to deal (it' t'ese 6ne( /ids on t'e bloc/ t'ose almig'ty neig'bors t'at .ust migrated from overseas due to t'e globali7ation of t'e (orld economy. +ost li/ely) t'ese +,Es arrived recently or currently are /noc/ing on t'e door as t'ese developing economies gradually open up to t'e (orld. C'ina and countries in East European and Sout' 4merican countries may be cases in point. So far in emerging mar/ets) sc'olarly attention 'as been focused on 'o( multinationals s'ould compete effectively in t'e ,e( 5orld *4rnold 2 8uelc') 1$$3-. Clearly t'is stream of researc' is important and (ill be informative for various companies) including domestic firms. Fe( 1

researc'ers) 'o(ever) 'ave paid direct attention to 'o( domestic businesses in emerging economies s'ould develop t'eir strategies to survive and t'rive (it'in t'is ne( (orld order. &'is is true in transition economies as (ell as in emerging economies. Simply stated) precious little guidance is available to domestic firms in suc' cases *Da(ar 2 Frost) 1$$$-. %esearc' insig'ts generated from t'is line of pursuit (ill not only broaden our understanding of global strategic management) but (ill inform t'e practice as (ell.

Firm Strategy!
9nderstanding t'e nature of t'e global environment constitutes a first step to(ards developing effective strategy recommendations for firms) especially t'ose in emerging economies. Sc'olars believe t'at t(o po(erful forces are at play in t'e global environment. &'e first force is t'e pressure to globali7e. Scale economies and scope economies) ever e!panding %2D costs) s'ortened product life cycles) and convergence to fi!ed:cost economies *1artlett 2 "'os'al) 1$$3; <'mae) 1$3$- all point at t'e need for companies to see/ global po(er and efficiency. "lobal integration from political and cultural perspectives) and advances in transportation and communication tec'nologies reinforce t'is pressure. 4t t'e same time) a second force) t'e pressure to locali7e) is fig'ting bac/. =ocal cultural traditions persist in spite of global integration. %egional political forces are actively influencing various processes. &ec'nological forces t'at are responsible for globali7ation are also responsible for accommodating and possibly reinforcing locali7ation *1artlett 2 "'os'al) 1$$3-. For e!ample) utili7ing advanced manufacturing tec'nologies (ould enable firms to produce 'ig'ly customi7ed products to meet uni0ue customer needs and tastes (it'out sacrificing scale economies *Sc'lie 2 "old'ar) 1$$>-. Clearly t'ese opposing forces 'ave placed conflicting demands on businesses big and small) multinationals as (ell as domestic. +ultinationals t'at pursued eit'er pure global strategy *(orld product orientation- or multi:domestic strategy *multi:local product orientation- are no( facing bot' pressures *1artlett 2 "'os'al) 1$$3-. Furt'ermore) t'e simultaneous need to create global po(er and efficiency) and local differentiation and responsiveness) leads companies to see/ anot'er important advantage) t'at of (orld(ide innovation and diffusion. Innovations along various aspects of business are critical for responding to locali7ation pressures. 4t t'e same time)

diffusing t'ose innovations) ('en appropriate) (ill be critical for gaining and en'ancing global po(er and efficiency. From a strategic point of vie() t(o levels of analyses are necessary *=engnic/: ?all 2 5olff) 1$$$-. First) at t'e individual company level) t'e critical 0uestion is ('at strategy a company can adopt in order to survive and t'rive (it'in its respective environment. Second) loo/ing at t'e level of companies as a business ecosystem) t'e critical 0uestion is 'o( a community of businesses s'ould be'ave in order to develop and sustain t'e business ecosystem. &'e model of strategy as actions *"rimm 2 Smit') 1$$#- offers a promising starting point for developing effective strategic responses for domestic firms. Company strategy can be classified into four types of actions: entrepreneurial actions based managerial insig't and uni0ue understanding of mar/ets and tec'nologies. &'e action:based perspective is beneficial for understanding t'e respective strategic moves and counter:moves initiated by players in an industry. For t'ese strategic actions to enable firms to build competitive advantage) t'ey must some'o( delay and@or prevent competitive responses from ot'er firms. +ore specifically) entrepreneurial actions enable a firm to build competitive advantage if t'e action:initiating firm can e!ploit competitive uncertainty) blind spots or bot'. &o t'e e!tent to ('ic' competitors (ill not be able to detect t'e significance of t'ese strategic moves) t'ey (ill not respond in time) and t'e long delay (ill enable t'e action:initiating firm to build competitive advantage and may even enable it to create superior resources to invo/e %icardian actions. ,aturally entrepreneurial insig'ts are critical for pursuing entrepreneurial actions. If a firm possesses uni0ue resources and competencies ot'ers cannot imitate and ta/e a(ay easily *?amel 2 Ara'alad) 1$$4; Aeteraf) 1$$B-) it can pursue competitive strategies suc' as differentiation and cost leaders'ip) and delay meaningful responses from its competitors. &'e longer a firm can delay meaningful responses from its competitors t'e more li/ely it (ill build additional competitive advantage. Deterrent action re0uires po(er) dominance and reputation of a mar/et leader. 5'en suc' a firm pursues deterrent action) it may be po(erful enoug' to prevent ot'ers from responding effectively. In contrast) co:optive action is usually appropriate for stable and mature industries ('ere players are all better off by maintaining peace instead of competing against one anot'er.

Core Elements and Interactions o$ global Strategy

Central to t'e practice of strategic management are t'ree researc' streams related to various aspects of global strategy: product:mar/et scope *4nsoff) 1$ >; "oold) Campbell) 2 4le!ander) 1$$4; +int7berg) 1$33-) global management gestalts *1artlett 2 "'os'al) 1$$3-) and competitive approac'es *Campbell:?unt) 2CCC; Aorter) 1$3C) 1$3>-. &'e product:mar/et scope 0uestion focuses on t'e e!tent of diversification) synergistic connections among multiple businesses (it'in t'e same corporation and t'e role of corporate 'ead0uarters *4nsoff) 1$ >; "oold) Campbell) 2 4le!ander) 1$$4; +int7berg) 1$33-. &'e global management gestalts or typologies identify critical c'allenges multinational enterprises confront: ('et'er t'ey are pressures for globali7ation) pressures for locali7ation) need for (orld(ide learning and innovation) or t'e combination of all t'ree. &'ese typologies t'en propose strategic solutions at global) multi:local) international and finally transnational levels *1artlett 2 "'os'al) 1$$3; 1ryan) Fraser) <ppen'eim) 2 %al) 1$$$-. Competitive approac'es or generic strategies *Aorter) 1$3C) 1$3>- are concerned (it' specific competitive orientations a business (ould adopt from a list t'at includes cost leaders'ip) differentiation) cost:based focus and differentiation:based focus. &'e notion of fit) a central assumption in strategic management) (ould suggest t'at competitive environment) company strategy) organi7ational structure and processes) and resources and capacities need to be mes'ed toget'er in a coordinated and compatible manner *1artlett 2 "'os'al) 1$$3; =engnic/:?all 2 5olff) 1$$$; +iles 2 Sno() 1$#3; Aorter) 1$3C-. 4ny consideration of t'e substance of company strategy t'erefore needs to integrate all t'ree core: elements and t'eir attendant interactions. Competiti e Strategy Aorter) in 'is seminal (or/ on analy7ing competitive landscape) proposed a parsimonious typology of four competitive strategies *Aorter) 1$3C) 1$3>-. &'is typology (as organi7ed into a conceptually elegant frame(or/ of sources of competitive advantage *cost leaders'ip and differentiation- and mar/et scope *broad and focused- to 'ost t'e four strategies of cost leaders'ip) differentiation) cost:based focus) and differentiation:based focus. Several important predictions stemmed from t'is frame(or/. First of all) Aorter predicted t'at businesses t'at ad'ere to one of t'ese typologies (ould outperform t'ose t'at do not. 4 closely related 4

assumption of t'is prediction is t'e e!istence of businesses t'at configure t'eir resource base according to t'e typology. Second) after assessing resource re0uirements) Aorter predicted t'at effective competitive approac'es s'ould be pure types instead of combinations. 1usinesses t'at attempt to ac'ieve multiple advantages (ill get 6stuc/ in t'e middle and suffer poor performance as a conse0uence. In general) cost leaders'ip strategy re0uires substantial economies of scale) stability of production to facilitate learning) tig't cost:control process and reporting structure) product design for easy manufacturing) and a lo(:cost distribution system. Differentiation strategy) on t'e ot'er 'and) depends on mar/eting ability) product innovation and creativity) coordination among /ey functional areas including %2D) mar/eting) and product development) 'ig'ly s/illed labor) and cooperation from c'annels *"rimm 2 Smit') 1$$#; Aorter) 1$3C) 1$3>-. 1ot' variations of t'e focus strategy (ill depend on t'eir respective resources directed at t'e particular target mar/et. E'ample o$ Competiti e Strategy &o survive in a dynamic and 'ig'ly competitive business environment) different organi7ations 'ave 'ad to engage various strategies to survive. <ne suc' strategy is t'e corporate turnaround strategy. 4 turnaround situation is one of pointing out to a ne( direction. It is a complete c'ange in strategic direction of a firm after it 'as faced a corporate distress. Suc' a situation can easily lead to collapse of a company unless a plan of corporate survival and rene(al is devised successfully e!ecuted. &'e starting point is identification of t'e root cause or causes of t'e crisis. &urnaround strategies are used ('en a business (ort' resuming goes into corporate crisis *Aearce and %obinson1$$#-. 1oseman and A'ata/ *1$3$- argue t'at if a firm (ants to remain vibrant and successful in t'e long run) it must ma/e impact assessment of t'e e!ternal environment) especially suc' relevant groups as customers) competitors) consumers) suppliers) creditors and t'e government and 'o( t'ey impact on its operations success is dependent on productivity) customer satisfaction and competitor strengt'. Critical success factors are crucial to an organi7ation because t'ey ta/e into consideration fundamental c'anges in t'e environment t'us ma/ing firms proactive rat'er t'an >

reactive *1ett) 1$$>-. </utoyi- *1$$2- states t'at strategy 'as an important role in 'elping businesses position t'emselves in an industry. Effective strategy may enable a business to influence t'e environment in its favour and even defend itself against competition *4a/er) 1$$2-. 4a/er also adds t'at given t'e current focus in business) t'ere is need to understand competitor strengt's in t'e mar/et and t'en position oneDs o(n offerings to ta/e advantage of (ea/nesses and avoid 'ead on clas'es against strengt's. Eotler *1$$3- says t'at to adapt to environmental c'anges) firms re0uire effective leaders'ip. ?e furt'er states t'at) ('ile leaders'ip is crucial) most organi7ations are over managed and ot'ers under:led. In t'is regard t'erefore it is necessary to e!amine ('at impacts leaders'ip and strategic management 'ave on an organi7ation in relation to its e!ternal environment. +i ersi$ication Strategy <ne of t'e ma.or topics of strategic management 'as been t'e product:mar/et scope of a corporation and resultant managerial c'allenges *4nsoff) 1$ >; C'andler) 1$ 2; "oold) Campbell) 2 4le!ander) 1$$4; %umelt) 1$#4; %umelt) Sc'endel) 2 &eece) 1$$4-. From a resource development and utili7ation point of vie() competitive advantages are believed to form t'e basis for corporate scope determination *Aorter) 1$3#-. &'is reasoning is consistent (it' t'in/ing on appropriate corporate scope t'at core competences developed in various businesses oug't to be leveraged and utili7ed in a synergistic fas'ion *?amel 2 Ara'alad) 1$$4-. <t'er researc'ers also suggest t'at corporate 'ead0uarters s'ould ma/e a useful contribution For provide parenting advantageF by identifying 'eartland businesses For t'ose critical businesses on ('ic' a corporation truly depends on for its survival and developmentF and guiding core competence development and leveraging on:going businesses *"oold) Campbell) 2 4le!ander) 1$$4-. E'amples o$ +i ersi$ication Strategy 1rand Diversification: In some cases) you can diversify by selling t'e same product) or a similar one) under a different name. 4 (omenDs apparel store t'at adds menDs and c'ildrenDs clot'ing to try to e!pand its business mig't damage its brand among (omen ('o are see/ing a store t'at speciali7es in 'ig':end (omenDs apparel. <pening a second store under name and selling menDs and c'ildrenDs apparel diversifies your business. 4not'er e!ample of diversification by brand

(ould be an upscale (omenDs clot'ing store opening a second (omenDs clot'ing store under anot'er name and selling affordable (omenDs apparel. Global Strategic Gestalts +ost firms competing in todayDs global mar/ets are believed to fit one of t'e t'ree dominant organi7ational forms: global) multi:local) or international *1artlett 2 "'os'al) 1$$3; 1oudreau) =oc') %obey) 2 Straud) 1$$3; =eong 2 &an) 1$$B; %ugman 2 Gerbe/e) 1$$2-. &'e specific form c'osen is believed to be a function of t'e critical strategic c'allenge eac' firm faces: t'e need to globali7e *products-) t'e need to locali7e *mar/ets-) or t'e need to speciali7e *functionst'roug' innovation and learning. Firms pursuing global strategies aim at ac'ieving greater economies of scale and global efficiency by producing standardi7ed products for (orld(ide mar/ets. In t'e early years of its international operations) ?onda (as a good illustration of t'is approac'. Firms emp'asi7ing local responsiveness follo( a multi:local strategy t'at see/s to be sensitive to variations in local tastes and preferences. &'ese firms tend to develop complete value creation activities in respective countries and geograp'ic regions; t'ey provide differentiated products and apply differing mar/eting approac'es appropriate for eac' local mar/et. Arocter 2 "amble adopted t'is strategy. Finally) firms pursuing an international strategy transplant t'eir 'ome country innovations and uni0ue s/ills to ne( mar/ets ('ere indigenous competitors lac/ suc' capabilities. Eac' of t'ese approac'es effectively deals (it' one critical strategic c'allenge) ('ic' is) respectively) global efficiency) local responsiveness) and innovation and learning. &odayDs global business environment 'as been described as posing all t'ree c'allenges simultaneously. &'e integrative solution proposed for dealing (it' all t'ree c'allenges is t'e transnational strategy *1artlett 2 "'os'al) 1$$3-. &'e transnational strategy may provide an effective (ay to embed global po(er and efficiency) local responsiveness and differentiation) and speciali7ed (orld(ide innovation and learning (it'in one strategic organi7ational form. +any firms are believed to be evolving into t'e transnational strategic form *1artlett 2 "'os'al) 1$$3; 1oudreau et al.) 1$$3; =eong 2 &an) 1$$B-.

E'amples o$ global strategic gestalts Multi-domestic Strategy 5'en an organi7ation c'ooses a multi:domestic strategy) it means t'at competition in eac' country is 'andled independently of industry competition in ot'er countries. &'us) a multinational company is present in many countries) but it encourages mar/eting) advertising) and product design to be modified and adapted to t'e specific needs of eac' country. +any companies re.ect t'e idea of a single global mar/et. &'ey 'ave found t'at t'e Frenc' do not drin/ orange .uice for brea/fast) t'at laundry detergent is used to (as' dis'es in parts of +e!ico) and t'at people in t'e +iddle East prefer toot'paste t'at tastes spicy. Arocter 2 "amble standardi7ed diaper design across European mar/ets) but discovered t'at Italian mot'ers preferred diapers t'at covered t'e babyDs navel. &'is design feature (as so important to t'e successful sale of diapers in Italy t'at t'e company eventually incorporated it specifically for t'e Italian mar/et. 1as/in: %obbins introduced a green:tea flavored ice cream in Hapan) and ?Iagen:Da7s developed a ne( flavor called dulce de lec'e primarily for sale in 4rgentina. Transnational Strategy 4 transnational strategy see/s to ac'ieve bot' global integration and national responsiveness. 4 true transnational strategy is difficult to ac'ieve) because one goal re0uires close global coordination ('ile t'e ot'er goal re0uires local fle!ibility. ?o(ever) many industries are finding t'at) alt'oug' increased competition means t'ey must ac'ieve global efficiency) gro(ing pressure to meet local needs demands national responsiveness. <ne company t'at effectively uses a transnational strategy is Caterpillar) Inc.) a 'eavy e0uipment manufacturer. Caterpillar ac'ieves global efficiencies by designing its products to use many identical components and centrali7ing manufacturing of components in a fe( large:scale facilities. ?o(ever) assembly plants located in eac' of CaterpillarDs ma.or mar/ets add certain product features tailored to meet local needs. 4lt'oug' most multinational companies (ant to ac'ieve some degree of global integration to 'old costs do(n) even global products may re0uire some customi7ation to meet government regulations in various countries or some tailoring to fit 3

consumer preferences. In addition) some products are better suited for standardi7ation t'an ot'ers. +ost large multinational corporations (it' diverse products (ill attempt to use a partial multi:domestic strategy for some product lines and global strategies for ot'ers. Coordinating global integration (it' a responsiveness to t'e 'eterogeneity of international mar/ets is a difficult balancing act for managers) but an increasingly important one in todayDs global business (orld.

E ol ing Strategies $or Firms in Emerging Economies

Firms may be at a disadvantage (it' respect to resources) tec'nologies and managerial /no(: 'o( ('en compared (it' multinationals. Entrepreneurial actions) based on a /een understanding of local mar/et conditions and an ability to lin/ ot'er(ise common resources to deliver uni0ue products or services *"rimm 2 Smit') 1$$#- may be /ey for domestic firms. &'e success of suc' locali7ation strategy to a large e!tent depends on domestic firmsD ability to create competitive uncertainty and blind spots so as to avoid or delay competitive reactions *"rimm 2 Smit') 1$$#and to implement locali7ation effectively. "iven t'e lac/ of resource advantage) domestic firms (ould be (ell:served to initiate a focus:based competitive approac'. &'e firm scope may be 0uite limited as (ell. 4 /ey factor t'at may influence firm scope decision may be t'e nature of t'e institutional environment *E'anna 2 Aalepu) 1$$#-. Emerging economies may not 'ave developed t'e necessary product) labor) or capital mar/ets) may still lac/ t'e la(s and regulations t'at govern economic activities effectively) and may not be able to enforce contracts consistently. Sc'olars believe t'ese institutional voids may dictate t'at firms perform various functions t'at are ot'er(ise underta/en by t'e institutional environment *E'anna 2 Aalepu) 1$$#; =i) =i) 2 &an) 1$$3-. For a firm to fill in t'e institutional voids) it may (is' to increase its scope. For e!ample) it may develop a brand name) en'ance its reputation) conduct internal certification of product 0uality) and leverage its name across multiple products as a (ay to fill t'e institutional void created by t'e lac/ of a (ell:developed product mar/et. 4not'er alternative may be group companies *E'anna 2 Aalepu) 1$$#; E'anna 2 %iv/in) 2CC1-. 4 firm may c'oose to be affiliated (it' a group company so as to benefit from group advantages. &'e group may t'en 'elp fill institutional voids. For e!ample) t'e ability of a group to raise capital may 'elp elevate t'e problem of a poorly developed capital mar/et) and t'e ability of a $

group to provide managerial training may lessen t'e s'ortage of managerial talent) t'ereby filling t'e institutional void (it'in t'e labor mar/et. Clearly) group benefits may incur group:related costs *E'anna 2 %iv/in) 2CC1-. For e!ample) affiliated companies may be bound by various re0uirements of members'ip (it' t'e group. &'us) firm scope and group members'ip become consideration for firms. 4not'er potential consideration may be t'e scope of group) t'at is) t'e e!tent t'e group is engaged in many unrelated activities. Some group companies are 'ig'ly focused. For e!ample) t'e information tec'nology groups in C'ina *=u) 2CCC- are mostly engaged in information tec'nology activities. <t'ers are diversified into a ('ole range of economic activities. Aotential benefits and costs of group diversification t'erefore (ill be anot'er important consideration. &'e second strategic dimension identified for firms is leveraging. Firms t'at are able to pursue entrepreneurial insig'ts successfully may be able to accumulate resources) and t'erefore be in a position to leverage t'ose resources. <ne important direction for leveraging t'ese resources is to go global. 4 /ey motivation 'ere is for firms to apply t'e resources and s/ills on a greater scale. <ne possible alternative is to pursue a regional strategy *Sc'lie 2 Jip) 2CCC-. 1y identifying a cluster of geograp'ic areas t'at is reasonably 'omogeneous) domestic firms may be able to utili7e t'eir s/ills and resources more efficiently (it'out 'aving to deal (it' added comple!ity. 4not'er direction is to pursue a global:nic'e strategy. Firms in 'ig' tec' and speciali7ed areas 'ave been able to pursue suc' global:nic'e strategy effectively over t'e years *C'ang 2 "rub) 1$$2; Eeeble) =a(son) Smit') +oore) 2 5il/inson) 1$$3-. Domestic firms in emerging economies may be able to pursue t'e same approac' as (ell. Information tec'nology may create ot'er opportunities as it alters p'ysical locations of value:c'ain activities) and t'e manner (it' ('ic' t'ey are performed. 4 t'ird possibility (ould be for firms to pursue globali7ation (it' t'eir respective group companies. &'is mig't be anot'er important consideration ('en domestic firms assess t'eir group affiliation decision and group:scope c'oice as (ell. &'e first t(o c'oices clearly s'ould be tied (it' focus:based competitive approac'es. &'e t'ird one Fgroup approac'F may provide

1C

possible opportunities for firms to pursue ot'er competitive approac'es) but (e believe t'at unnecessarily complicated competitive approac'es may represent a strategic liability. Strategy divergence consideration offers some useful insig'ts as (ell. From a corporate scope consideration) domestic firms s'ould consider t'e need to en'ance t'e set of complementary businesses available in t'e business eco:system or economic cluster *Aorter) 1$$3-. In its global approac' to selecting locations) firms s'ould ta/e into consideration competitive diversity and t'e ability to learn from ot'ers. Collaboration) t'e fourt' strategic dimension) 'as important implications for various strategic elements as (ell. Collaborative partner selection may represent scope consideration. In addition) collaboration mig't represent anot'er significant alternative for domestic firms. Collaborating (it' ot'er companies Fdomestic or multinationalF (ould allo( companies to learn from ot'ers) accumulate e!periences) leverage resources) and s'are ris/s. +any firms pursue collaborations *?amel) Do7) 2 Ara'alad) 1$3$; <'mae) 1$3$-. Firms in emerging economies may (is' to fully utili7e t'is approac' to pursue t'eir global strategies. &'ere are successful e!amples of suc' collaboration among information tec'nology firms in C'ina *=u) 2CCC-. Aursuing collaborative global approac'es (ould probably enable firms to pursue ot'er competitive approac'es as (ell. Implementing Global Strategies &'e difficulty of implementing strategy is greater ('en a company goes global. In t'e international arena) fle!ibility and superb communication emerge as mandatory leaders'ip s/ills. =i/e(ise) structural design must merge successfully (it' foreign cultures as (ell as lin/ foreign operations to t'e 'ome country. +anagers must ma/e decisions about 'o( to structure t'e organi7ation to ac'ieve t'e desired level of global integration and local responsiveness. Information and control systems must fit t'e needs and incentives (it'in local cultures. In a country suc' as Hapan or C'ina) financial bonuses for star performance (ould be 'umiliating to an individual) ('ereas group motivation and re(ard are acceptable. 4s in ,ort' 4merica) control is typically created t'roug' timetables and budgets and by monitoring progress to(ard desired goals. Finally) t'e recruitment) training) transfer) promotion) and layoff of international 'uman resources create an array of problems not confronted in ,ort' 4merica. =abor la(s)

11

guaranteed .obs) and cultural traditions of /eeping unproductive employees on t'e .ob provide special problems for strategy implementation.

Conclusion
&'e e!tant global strategy typologies are only but some of t'e potentially viable c'oices. Firms in emerging economies s'ould also pursue globali7ation. "iven t'eir resource disadvantage ('en compared (it' multinationals) domestic firms may need to start (it' a locali7ation approac' and pursue ot'er alternatives as appropriate. 4fter identifying four strategic dimensions domestic firms need to emp'asi7e and revie(ing core elements of strategy. Four approac'es (ere identified. &'ey are: global nic'e) regional) group based global and collaborative global. From t'e perspective of strategic dimension) t'e lessons for businesses and local governmental agencies are clear. First) t'ese institutions s'ould remove barriers and embrace competition instead of in'ibiting it. Second) businesses s'ould compete creatively instead of imitating one anot'er. &'ird) firms s'ould encourage creative strategy:ma/ing) for it lifts up every participant and t'e ('ole business community. Finally) collaboration (it' competitors (ill en'ance bot' t'e competitiveness of participants and t'e attractiveness for t'e business ecosystem.

,ecommendations
In terms of strategies for domestic firms to evolve into global firms) several c'oices appear to be viable. Eac' 'o(ever 'as its advantages and limitations and eac' 'as its resource and managerial implications. Firms s'ould assess t'eir resource positions) revie( uni0ue industry conditions t'at may place additional constraints) and identify t'eir o(n viable approac'. <f course) it is possible t'at some of t'e approac'es can be combined to form a 'ybrid) for e!ample) a company may be able to pursue a global:nic'e strategy ('ile collaborating (it' ot'er firms at t'e same time. Space constraints dictate brevity. ?o(ever) a number of tas/s remain. 4 critical assessment of t'is t'eoretical frame(or/ is important. Elaborating on t'e interaction among t'e elements and dimensions of t'e strategies identified 'ere (ould be anot'er useful study. Furt'ermore)

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empirical studies) eit'er t'roug' e!tensive case studies or surveys to test t'ese predictions against business practices (ill yield more insig'ts.

1B

,e$erences
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