Global Strategy Analysis: Competitive Advantages, Benefits, and Costs

This report delves into the concept of global strategy, providing a comprehensive overview of its definition, benefits, and associated costs. It explores how businesses utilize global strategies to expand their operations internationally, aiming to leverage resources and gain a competitive edge in the worldwide market. The report highlights the importance of global strategy in today's interconnected world, emphasizing the coordination of product, pricing, and other business aspects across international locations. It further discusses the advantages of pursuing a global strategy, such as economies of scale and the ability to produce standardized products, while also acknowledging the need to understand cultural differences at local and national levels. The report also examines the sources of competitive advantages that can be derived from implementing a global strategy.

BLOG: GLOBAL STRATEGY
WHAT IS GLOBAL STRATEGY?

GLOBAL STRATEGY
6th August 2019
In business, global strategy refers to a strategic guide to a business organisation to globalisation.
At the present scenario, the world becomes more connected which allows a company to generate
revenue by utilising the resources prevailing in countries that are located outside the national
border. Global strategy of a business is something that a business uses to apply to reap the
rewards of conducting business in the worldwide market. During the end of the twentieth
century, a number of barriers related to international trade walls due to this, a large wave of
companies started pursuing global strategies with the aim of gaining competitive advantages.
Academic research on global strategy came around 1980s by literary works presented by
Michael Porter, Christopher Bartlett, and Sumantra Ghoshal. Global strategy is associated with
economic systems, and technological change more especially changes in information technology
which facilitated the coordination of a multinational company’s strategy on the worldwide scale.
Definition and Discussion on Global Strategy
A global strategy is one that a company takes when it wants to compete and expand in the global
market. In some other words, a company pursues global strategy when it wishes to expand its
business internationally. A global strategy stands as the plans a business organisation uses to
develop in order to target and ensure its corporate growth beyond its national borders. More
specifically, global strategy is something by which a company aims to enter into foreign markets
to increase the volume of its goods’ sale abroad. Global strategy is a shortened term which
covers three different strategies such as global, international, and multinational. In support of the
definition provided by the Cambridge Dictionary, a global strategy is a detailed plan showing
how a company or product or service could become successful in every country across the world
and the planning process on how a company or product or service could gain success from the
worldwide market.

A global strategy involves integrated thinking about every aspect of the business such as its
production sites, suppliers, markets, investors, and competition. It also involves the assessment
of every single product and service from national and international market standards’
perspective. It means a company needs to embed international perspectives while designing a
product or service for placing it in the global market by applying global strategies. It also means
meeting the world standards before seeking the world markets as well as being a world-class
company also in the domestic market. An efficiently formulated global strategy helps a company
to address the way to enter and build the required global presence, the optimal location or
locations across the world for conducting value chain activities, and the way to continue global
presence for gaining competitive advantage from the global market. Global strategy requires
companies to coordinate their strategies related to product and pricing across international
locations and markets tightly; therefore, companies that pursue global strategy become
highly centralised.
As opposed to a multi-domestic strategy, a global strategy often become appropriate for the
industries which include companies that face strong pressures in relation to cost reduction
whereas the pressures from local responsiveness stand weak. Therefore, global strategy allows
these companies to sell standardised products or services worldwide. Nevertheless, these
companies are capable of taking advantage of economies of scale and the effects of the learning
curve, because of their ability to produce standard quality products in mass that it can export in
the global market. Global strategy assists a company to deepen its understanding of cultural
differences at the local and national level to become a truly global company.
Importance of Global Strategy
Sources of Competitive Advantages from a Global Strategy

Benefits of Global Strategy
Cost of Global Strategy