Description[ edit ] A sound global strategy should address these questions: How to build the necessary global presence? What must be AND versus what is the optimal locations around the world for the various value chain activities?
Companies and countries striving to develop a successful global trade or marketing strategy realize, sooner or later, that they should focus their efforts on a small segment of the global market.
For instance, although they contain only 20 percent of the world's population, Japan, Europe, and the United States make up a hefty 75 percent of the global economy. Furthermore, within each of those countries the vast majority of the wealth is controlled by a small, tightening segment of the population.
Therefore, a company can become truly dominant on a global scale by focusing on a few key markets. Conversely, it can easily Global strategy and its impact on by spreading its efforts too thin regionally.
Among the most important considerations for a company selecting regions to consider for trade is the stage of a region's economic development. Aside from political and social risks, countries at relatively mature stages of industrialization are most likely to offer healthy markets for imports.
They generally have a more equitable distribution of buying power and are more amenable to new products and technologies. In addition, industrial and post-industrial nations offer other key benefits, such as a stable fiscal and monetary infrastructure; currency stability, which reduces risks associated with the rapid rise or fall of the value of investments in the host country; communication infrastructure, which eases marketing efforts; and transportation systems necessary for the efficient distribution of goods and services.
Influences ancillary to the economic environment include competitive forces that help to dictate global strategy. Although industrial societies typically offer better opportunities for global marketing, they also usually entail more acute competitive pressures.
For instance, different countries may possess different levels of competition for various products ranging from a monopolistic country or product environment, which would be inaccessible, to pure competition. A company may also be able to compete, and even benefit from, a more oligopolistic environment in which a few major companies dominate the regional market.
Other competitive forces to consider include the threat of new entrants into the market. If barriers to entry are low and a company has few proprietary advantages, competitive risks may be elevated.
The product or service is also vulnerable if it can be easily replaced by a substitute when market conditions change.
For example, buyers might switch from boxed cereal to oatmeal to save money during a recession. Also important is the bargaining power of buyers and suppliers in the host country.
If a company is in a relatively weak bargaining position, particularly in relation to its competitors, its profitability could become overly dependent on supply and distribution channels. Existing competition is also a concern, as established brands and products can wreak havoc on the profitability of a new entrant.
A third-world nation with a history of revolt and instability, for example, would likely make a poor prospect for trade. Even an advanced industrialized nation could be a poor prospect, however, if its legal and political environment is generally hostile toward foreign competitors.
Most governments establish restrictions or trade barriers on foreign competition, most of which are designed to protect domestic industries and companies. These controls often dictate a firm's level of activity in an overseas market. A common control is license requirements, which force importers exporters to obtain a license before they can move the product into or out of a country.
For instance, a country may restrict the exporting of goods deemed to have military value. Or, the host may refuse to license goods for import that compete with a domestic industry that it is trying to support.
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A second type of control is tariffs, or taxes, on imports. Tariffs are often used to protect domestic companies and industries from competition.
However, tariffs may also be used to ensure that the prices of imported goods are equivalent to domestic substitutes, or to gamer revenue for the government.
In addition, tariffs are often used to penalize other countries for trade or political actions. The United States, for instance, may elect to impose a tariff on trucks from Japan to punish it for erecting a large tariff on rice imported from the United States.
A quota is simply a provision that limits the amount of a specific product that can be imported. Like tariffs, quotas may be established for a number of reasons. Finally, "voluntary" quotas, or voluntary export restraints VERsare used to protect domestic companies from a particular competitor or in a special situation in which an industry is trying to regain its ability to compete.
Besides licenses, tariffs, and quotas, other control mechanisms include special taxes, such as excise or processing taxes on certain products; qualitative restrictions, which specify minimum standards of quality or safety that must be achieved before the country will accept it for import or export this is sometimes done for health and safety reasons in addition to economic purposes ; and exchange controls, which effectively limit the amount of foreign currency that an importer can obtain to pay for goods purchased, or that an exporter can hold for goods sold to another country.
Most countries also engage in promotional activities designed to foster foreign exchange. These policies can hurt exporters competing against subsidized products, or help them if their country is doing the promotion. The two principal types of promotions are state trading and subsidies.
State trading entails direct government involvement in buying and selling activities.Global Strategy for Infant and Young Child Feeding. Infant and young child feeding are a cornerstone of care for childhood development. World-wide about 30% of children under five are stunted as a consequence of poor feeding and repeated infections.
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Global strategy involves thinking in an integrated way about all aspects of a business—its suppliers, production sites, markets, and competition.
It involves assessing every product or service from the perspective of both domestic and international market standards.
4 This working document is intended to be the basis for continued collaboration and consultation with Member States during the drafting of the global strategy. Nov 06, · Find new ideas and classic advice for global leaders from the world's best business and management experts.
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