What Is a Global Strategy?

Globalization strategy refers to the expansion plans of some superpowers in an attempt to dominate the world, and also refers to the strategic plans of certain multinational corporations trying to monopolize the world economic market. The goal is to consider the company's market and resource distribution from a global perspective in an increasingly complex environment, improve competitiveness, enhance competitive position, and maximize the overall benefits. It can arrange its production and operation facilities in the most favorable countries, coordinate their strategic actions, connect activities located in different countries, transfer the results of technology development, management innovation, and make fuller use of the company. Core competitiveness.

Globalization strategy

Refers to the expansion plans of some superpowers in an attempt to dominate the world. It was also pointed out that some multinational corporations attempted to monopolize the world economic market.

The goals of the global strategy are divided into general goals and sub-goals. The overall goal is to consider the company's market and resource distribution from a global perspective in an increasingly complex environment, improve competitiveness, enhance competitive position, and maximize the overall benefits. The overall goals of this strategy can be broken down into:

Core goal: To compete with strong competitors and make progress in some new areas to the maximum extent, even if these areas are unfamiliar. The core objective determines whether the monopoly advantage can be won.

Basic objective: To make the company's current operating activities effective at the overall level, and to properly manage the operating risks that may result from these benefits. The basic goals determine whether they can survive in a certain period of time, and at the same time they can create the basis for further development.

Develop and equip yourself with the challenges of the future environment. The development goal is the key to the company to maintain and improve its global competitiveness.

Priority target: Based on strategic evaluation, determine the priority order, and give priority to the company's overall concern

There are various means to achieve the company's global strategic goals. Because the global market no longer strictly distinguishes between domestic and foreign markets, it treats markets around the world equally.

There are various means to choose from:

Balance of economies of scale and flexible operations. Economies of scale are very easy for global companies, and only global companies can achieve complete economies of scale, because they face the global market. Large-scale production helps companies gain economies of scale and accumulate production experience, which will greatly reduce costs and allocate such research and development costs, advertising costs, and promotion and management costs as increasing product sales. But a large business is not necessarily a good thing. Because the world economy has undergone tremendous changes, traditional economies of scale are no longer as important as flexibility and agility to compete in rapidly changing markets. Mass production is giving way to flexible manufacturing systems that produce small batches and many varieties of products. Gone are the days when a large company could thrive by producing more low-cost standard products than its competitors. If large companies want to survive, they must combine the best conditions that large companies can provide with the best characteristics of small companies, and become a mixture of large and small enterprises.

Consider both standardized production and differential production. Companies must pay great attention to the different needs of different parts of the global market. The advantages obtained by differential production to meet the market's demand for special products will inevitably be compared with the benefits of greatly reduced unit costs obtained from standardized production. When the local environment is acceptable, the company should try to avoid making fine adjustments to the products to meet the needs of the local market. At the same time, in the business activities, the company should act as an intermediary role for change in order to spread its corporate culture around the world . In fact, the company's

It is often necessary to adjust the production and sales structure to meet the different needs of the ever-changing national markets. The problem is to determine when the difference in demand between the markets is large enough to compensate for the losses caused by abandoning standardized production. Focusing on standardized production or differential production ultimately depends on the impact of these two production methods on benefits and costs. If the cost of adjusting product production to meet special market needs is not high, and the initial design of the product has taken into account the differences in various important markets, then it is easy for companies to switch to differential production.

The relationship between standardized production and differentiated production is actually a question of considering the global distribution of value-added chains, that is, using the input-output differences of countries to implement the so-called "integration"

Adjustment model. However, risks must be considered when weighing the input-output ratio. High efficiency is likely to be always associated with high risk. The company subdivides the value chain from the perspective of cost, which makes some of its Activities such as research and development, manufacturing, etc. are concentrated in one country or region, but sales are oriented to the world. Therefore, for an activity, there may be exchange rate risks between the input of costs and the gain of benefits. In addition, the layout of this value-added chain leads to an increase in the volume of trade within the company and between countries, and it is easy to cause the host country to be vigilant and lead to government intervention and external policy risks.

Collaborative advantages and diversified policies. The cost of jointly manufacturing two or more products may be lower than the cost of manufacturing them individually. This is the economic benefit of collaboration. Multiply

Yuanhua's company has the ability to share investments. Between departments, products and markets, the company can share physical assets and intangible assets, such as manufacturing equipment, cash, and trademarks. Second, it can share knowledge and research and development results. Therefore, the advantage of collaboration can ensure the realization of the company's global strategic goals. For example, Japan's "series structure" or enterprise alliance, named the series after a well-known first-class company. The series internally realizes global unity to achieve control of the global market. However, there is a price to be gained for collaboration. Different market segments, different products, different markets have different environmental requirements.

To this end, companies need to ensure that their business activities are consistent with the external environment, and collaboration seeks internal consistency between corporate activities. While creating such a collaborative advantage, there must be some concessions to externally consistent goals. In addition, this process also exacerbates management

A survey of the current major multinational companies reveals that research and development activities under their global strategy have common ground. Generally speaking, there are the following basic procedures:

(1) Establish a technical steering committee within a multinational company

In order to create a global research and development network, multinational companies often first establish an innovative team. The company's president and senior managers have established a technical steering committee composed of 5-8 people, and its membership composition has shown a "crossover" trend. They often have deep professional technical knowledge and rich management experience, as well as different educational backgrounds.

(2) Select a new research and development institution

As far as the actual operation of major multinational companies is concerned, there are two main types of new research and development institutions:

1. Home-base-augmenting. That is, research and development activities are mainly for obtaining information from company competitors and foreign universities. In this way, research and development information is transmitted from relevant foreign institutions to the home country's research and development headquarters.

2. Home-base-exploiting. That is, the research and development activities are mainly to support overseas manufacturing bases to produce standardized products that can meet local needs. In this way, research and development information is transmitted from the headquarters of the home country's research and development institution to relevant foreign institutions.

A survey shows that approximately 45% of multinational corporations' research and development institutions use home country base expansion, and the remaining 55% use home country base expansion. The average number of people in both types of research and development institutions is about 100. However, these two forms have significant differences in their strategic goals and leadership styles.

(3) Location selection for research and development institutions

1. Location selection of home country base expansion research and development institutions. Home country base expansion research and development institutions are generally set up in areas with relatively advanced science and technology to obtain new research and development information as quickly as possible.

2. Location selection of home country base pioneering research and development institutions. Home country base research and development institutions are set up in larger markets and near manufacturing plants. In this way, their products can be quickly put into foreign markets.

Enterprises must have a global mindset and layout, whether in the entrepreneurial stage or the growth stage,

First, the global economic center is rapidly shifting from developed to developing countries; the development of the Internet has significantly reduced the cost of communications, the world has become flat, and it has become a global village that is closer to the world, and cross-border collaboration is more smooth and efficient; cross-border trade, investment And the acceleration of the pace of technology transfer, more and more local enterprises have the opportunity to enter the international market, at the same time, the local market has also become an important part of the global market.

Second, the homogenized lifestyle spreads around the world, with McDonald's, KFC, and Starbucks stores expanding rapidly around the world; people have never been tolerant and appreciated of different cultures and values, and their loyalty to products of specific origins has become weaker; Intellectual assets such as enterprises, product brands, and knowledge have become the most valuable assets of an enterprise, and their respect for knowledge and people has reached an unprecedented level.

Third, the development of network technology has subverted many traditional thinking and business models. The time for new product development and the life cycle of products have been greatly shortened. At the same time, the colorful virtual world has also created many new business opportunities.

On April 27, 1961, China COSCO COSCO was officially established. In the development of nearly half a century,

The advantage of a global strategy is that it can focus on building a unified competitive advantage for the company:

1. Can arrange their production and operation facilities in the most favorable countries, either centralized or decentralized, and coordinate their strategic actions.

2. It can connect activities located in different countries, transfer the results of technology development and management innovation in a timely manner, make fuller use of the company's core competitiveness, and choose where to challenge competitors. It is convenient for the company. Build lasting competitive advantage.

Disadvantages of global strategy:

It is difficult to adapt to the characteristics of each host country and to the different situations of each country.