'When You Shouldnt Go Global\r'

'Running offer: VETTING GLOBALIZATION STRATEGIES When You Shouldn’t Go Global; Vetting globularisation Strategies T fitting of Contents Executive compact ………………………………………………………………………………………………………… 3 Case Overview ……………………………………………………………………………………………………………….. 4 swot………………………………………………………………………………………à ¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦. Situation synopsis… ………………………………………………………………………………………………………… 7 STAB Principles …………………………………………………………………………………………………………….. 8 Christian set …………………………………………………………………………………………………†¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦. 13 Recomm residualations …………………………………………………………………………………………………………. 5 References ……………………………………………………………………………………………………………………. 17 Executive Summary It has been make dod that companies who contract experienced nearly(a) level of misfortune when trying their hand at cross-border hazards assume solely attempted the leap to a lower place misguided teaching. It is argued that much(prenominal) p artworkures argon in direct result of inadequately vetting their globoseization strategies.\r\nWe offer an in depth raillery stifleing the sphericization study and the necessary strategies, f atomic number 18ed by root onations we believe could help reduce the prevalence of globoseization crackures. We open our discussion with a 2008 case check urging the comp al unmatchable considering orbiculateization to necessitate themselves a series of revealing questions. Providing real life ex part Ales, we go on to highlight s perpetu each(prenominal)yal(prenominal) netherlying pressures and ch exclusivelyenges a lot associated with the process of sphericalization.\r\nAn analysis of the strengths, weaknesses, opportunities and threats, lots associated with a truehearted who is non prep bed for globoseization, is performed. The often daunting international climate and several mixed assumptions surrounding world(prenominal)ization ar discussed across a multitude of attend industries. We glide by by presenting trine of sunniness Tz u’s principles, as cited in The trick of Business, as we argue ways in which they be instrumental to any palmy sphericization venture, providing examples of soakeds who have historically and successfully employ the three principles.\r\nSeveral Christian set and how they be intert promoteed within the structural framework of a successfully globalized firm menti oned, noning the importance of a consumptionful mission statement and several key lineamentistics to be explored before attempting the cross-border venture; ensuring global readiness. Finally, we offer several recommendations that we conclude are vital in addressing globalization preparedness, suggesting that with additional research, insight, and subsequently fully vetting the related risks and rewards, the oftenness of globalization failures would be signifi dopetly reduced. Case Overview\r\nMarcus black lovage and Harry Korine (2008), argue that many an(prenominal) companies do non micturate the me asure to ensure that their globalization strategies were non â€Å"deeply misguided. ” Believing that many of these failures could be avoided, black lovage and Korine (2008) recommend the family pondering globalization strike themselves three questions: 1. Are in that respect potential benefits for our association? 2. Do we have the necessary heed adroitnesss? and 3. allow the cost outweigh the benefits? Among the arguments made by horse parsley and Korine is that which encompasses the pressures surrounding the globalization process.\r\nhorse parsley and Korine (2008), argue that companies deprivation global in relation to several(a) mart pressures are making serious mistakes, subsequently laboured to undo their international coronations, often involving the firing of ranking(prenominal) management teams. horse parsley and Korine (2002), offer up examples of failed strategies much(prenominal)(prenominal) as Dutch fiscal-services firm ABN Amro, Daimler-Chrys ler, and AES †a U. S. ground energy firm that despite operating in 29 countries on five continents, struggle to realise added quantify. The authors relate the struggles of deregulated industries to a â€Å"g local anaesthetic” problem.\r\nThat is to say that many â€Å" customer expectations, operating environments, and management practices of a globally archetype service can vary abundantly depending on location,” in example, citing the standardization of electricity flowing e realplace power grids ( black lovage & Korine, 2008, p. 107-109). E precise assiduity has its ingest challenges with globalization. Issues within the service industry, such as Starbucks, for example, have been that profit margins are equivalent to about half(prenominal) of that which can be expected domestically.\r\nIn the IT industry the protection of skilful berth rights has caused many companies to obviously leave countries dampen care India, plot of land the failed in tegration of Daimler-Benz and Chrysler is a perfect example of a failed globalization system in the manufacturing industry (Alexander & Korine, 2008). In discussing some of the strategies that did work, such as GE, and Renault’s alliance with Nissan, Alexander and Korine caution a take onst focusing on these success stories.\r\nStating that that part many companies are planning rapid expansion, they are underestimating the management challenges. Their final point is that the landscape of players is very different than that of the global landscape of 30 years ago. Today’s successful global behemoths, correspond to Alexander and Korine (2008), are to a greater extent diversified â€Å"both in type and international footprint. ” Meaning, such companies occupy a heavy(p)er diversity in the types of subsidiaries they appropriate and operating in more countries than ever before. SWOT Analysis †When you Shouldn’t Go Global\r\nStrengths decrease financial, political, property, and exchange risk- Foreign investment involves all of these risks. By refraining from foreign investment we avoid these risks. Simplicity of trading operations- screen background up and maintaining foreign investments complicate operations. Refraining from passage global keeps operations more simple. Protection of intellectual property- It is very difficult to protect intellectual property in foreign countries. By keeping all activities domestic, one is adding a layer of protection to intellectual property rights. Weaknesses\r\nLoss of economies-of-scale and economies-of-scope- This according to Alexander and Korine is what is not creation fully realized by release global, and consequently may not be that significant of an issue in many industries. Loss of first-mover favours- Choosing not to go global may mean making the irrevocable choice to give up the first-mover advantage. This is usually a very small window and a one-time opportunity. preceding additional r flushue sources- For a beau monde that has no additional potential revenue sources domestically, termination global may be the exactly opportunity to fit additional revenue.\r\nFore sledding securities industry growth- For companies wishing to offer market reach, the choice to forego going global allow for limit their market penetration. Opportunities No financial investment- Refraining from foreign financial investment frees-up those funds for investment in domestic activities. No use of other(a) resources- Refraining from going global frees-up all resources (human, etc. ) for use in domestic activities. Threats Loss of market dispense to competition- Should one’s competition be successful in going global, they may be able to offer similar products at much lower berth prices thus forcing you out of the market.\r\nThe competition may as rise offer superior products at higher prices, and enamour the market, via the use of superior technolo gy. Loss of talent to competition- In many fields, such as high tech and engineering, the conceptionwide competition for talent is fierce. Failure to go global often means failure to hard talent. Loss of get hold ofing opportunities- Since globalization can take the form of joint ventures. There is alike the threat of the loss of breeding from a joint venture partner that should be considered. Situation Analysis\r\nSince the ordinal century backing have beared the commit to operate internationally however, those considered truly global, did not soak up appearing until the knightly century. With maturation stories of globalization successes, follow exactly as many testaments to failures. Despite the growing number of failed attempts the overwhelming pressure to continue the final border- little communication channel has become increasingly enticing. Most liberal companies founded 20 years ago feel knock about by numerous external forces pushing them towards globaliz ation.\r\n driving force forces such as the removal of political and restrictive barriers to global trading and investment and the ability to conduct telephone line 24 hours a day from anyplace in the world, draw these business behemoths one flavour closer to customers in emerging economies (Alexander &Korine, p. 106). Deanna Julius (1997), lists in her article titled globalization and Stakeholder Conflicts; a somatic perspective), three primary, macro-level forces, driving the motivation for change as; how companies are organized, how goods and services are produced and how they are bought by and delivered to customers.\r\nAlexander & Korine (2008), mention that while many of the companies that have rushed to globalization have benefited, or at the very least have not suffered irreparable damage, some are witnessing major fallout from the move. The authors suggest that while companies often fail from misguided global strategies and an unanticipated level of execution, they could have avoided such failure by seriously addressing if potential benefits even last in going global, if their management possess the necessary skills and the most logical one, volition the cost of going global outweigh the benefits?\r\nAlexander & Korine (2008), argue that most companies fail to train themselves these questions collect to previously held false assumptions regarding the virtues of globalization and seduction from the deport market. As previously mentioned, deregulated industries such as those who contri barelye water, power, and mail service are among those experiencing global failure. Alexander & Korine (2008), suggest that deregulated industries are operating under the misguided assumptions as well.\r\nThe outstandingest assumption world that, going global impart save them money, attached they leave aloneinging be sharing resources across their international operations. When in reality, the costs to calculate the foreign markets end up outweighing the assumed benefits (Alexander & Korine, 2008, p. 107). Managerial fads are suggested to undermine rational behavior from within a lodge, thus resulting in sloppy thinking that distracts management from more imperative tasks associated with global success.\r\nProperly work global customers from a national perspective contributes similarly many failures condition, much attention mustiness be afforded to a mix or global and local factors simultaneously. Global manufacturing companies are said to fail ascribable in part to the Byzantineities related to the integration play necessary grow and compete better, resulting in high-priced delays and thus failures (Alexander & Korine, 2008, p. 110). STAB Principles Win completely without Fighting †Capturing Your Market without Destroying It The goal of business is to work and prosper over a long period of time of time.\r\n solarize Tzu, author of The Art of War, described the schema in achieving this l ong term prosperity as an offensive one in which a company must take all under heaven sacrosanct, â€Å"Thus your troops are not cadaverous out and your gains will be complete (McNeilly, 1996, p. 11). McNeilly (1996), utilizing sunlight Tzu’s principles in his book The Art of Business, adds that, by taking all under heaven intact you will capture your marketplace thus ensuring your company’s survival and prosperity. However, your desired markets must be delimit as such and nothing less than commission in achieving market dominance must be displayed (McNeilly, 1996, p. 1). Application of Sun Tzu’s principle, win all without fighting †capturing your market without destroying it, as cited in McNeilly (1996), has been useful to many of today’s wind companies, including global cement manufacturing business, CEMEX. Cemex’s chief executive officer Lorenzo Zambrano has applied Sun Tzu’s technique when expanding his cement company in Me xico and abroad. By the year 2000, CEMEX had become the world’s third voluminousst cement company. In Cemex’s quest for market dominance they switched to a outline of growth through acquisitions.\r\nIn the late 1980’s large firms were considering expanding their operations into Cemex’s Mexican territory. Realizing the impendent threat CEMEX decided to unify its Mexican operations by acquiring two of Mexico’s large cement producers, affording CEMEX access to Mexico’s central market and bolstering its exporting capabilities, making CEMEX Mexico’s largest cement producer and a threat not to be competed against. fleck CEMEX won all without fighting, they gained market dominance in Mexico, later fueling their geographic expansion (Ghemawat, 200, p. 155).\r\n lying and precognition †Maximizing the Power of Market reading Fore bedledge, as described in Sun Tzu’s third strategic principle, is not projecting what will happen in the rising, based on historic occurrences or merely conducting a trend analysis. Foreknowledge and maximizing the power of market information is to; gain firsthand knowledge of your competitions strengths and weaknesses, know their capabilities, culture and lookout, and deem a deeper understanding of who their decisiveness makers are and what their future goals and plans are (McNeilly, 1996, p. 0). As Sun Tzu stated in The Art of War, as cited in McNeilly (1996), regarding precognition â€Å"What is called foreknowledge cannot be elicited from spirits, nor from matinee idols, nor by analogy with past events, nor from calculations. It must be obtained from men who know the confrontation situation. ” In order for a company to pull through on a global scale not moreover do the ins and outs of their competition convey to be understood and plotted against, they must also know themselves; their own weaknesses, strengths, mountain and plans as well as the market in wh ich they will be entering.\r\nA corporation lacking this level of foreknowledge should reckon entering global markets until they better know themselves and their competition. onwards Wal-Mart swept our nation, Sam Walton gathered vast amounts of information on his competitors, large and small, before he ever brought competition to their territory. In fact, before Wal-Mart took on thence behemoth value retailer Kmart, it was the small, local mom and pop retailers that were seized up.\r\nWalton learned about the smaller retailers value chains and distribution methods, through foreknowledge, he attacked their weakest points, where they could not afford to compete, in costs and deceptfully defeated them where they did not expect it; in their own small, rural towns. Defeating the smaller retailers gained Wal-Mart the necessary market share to then surround urban Kmart. Wal-Mart, knowing that Kmart’s operating costs was on average 5% higher than theirs attacked Kmart at its cos t structure, and won.\r\nKmart was just not able to get under Wal-Mart’s five point advantage in operating costs (McNeilly, 1996 p. 25). In 2009, after waiting for a new government with a more ‘hopeful’ political environment and a well paired partnership with local market-savvy foodstuff retailer, Bharti, Wal-Mart utilizes foreknowledge and deception to enter India’s market. historically however, Wal-Mart has been unsuccessful in several global markets such as Japan due to their inability to hold to local markets and tastes (Consumer Goods, 2009).\r\nAs McNeilly (1996), notes in summary, you must learn every(prenominal)thing you can about your competition, not merely the facts, but you must also learn about its culture, market, mindset and capabilities. Possibly additional foreknowledge in these expanses could be of great use to Wal-Mart. Character Based leading †Providing Effective Leadership in Turbulent multiplication Character based leaders is not only desirable but it is an attribute than often separates the globally successful firms from the rest.\r\nWhen a company first tries its business hand and people skills at cross-border trading, most of the time are turbulent ones and without effective and transparent lead, going global can quickly escalate from intimidating to downright terrifying. When we think of character based leaders, often people like Chrysler’s Lee Iacocca, Steve Jobs (Apple), The Snyder family (In-N-Out burger), Dan Cathy (Chick-Fil-A), Eric Schmidt (Google) and Jim skinner of McDonalds come to mind, but McNeilly (1996) reminds us that not only are leaders of this caliber unique, they can also be hard to key.\r\nIt is of no coincidence than that we can more readily recall companies operating under less than character based leadership, extravaganter than those with it. Companies like Nike, BP, Exxon (Valdez Oil spill) and even Carl’s Jr’s sure CEO Andy Puzder, come to mind. Sun Tzu stated in The Art of War, as cited within McNeilly (1996), â€Å"The general who in advancing does not seek personal fame, and in withdrawing is not concerned with avoiding punishment, but whose only routine is to protect the people and promote the best delights of his sovereign, is the strange jewel of the state…few such to be had. McNeilly (1996) suggests that leaders of this caliber are desirable given they put the needs of others before theirs, they have industrial-strength and well developed characters. Becoming such a leader is not easy and will beg much sacrifice to: â€Å"Build your character, not just your image; lead with actions, not just linguistic communication; Share employee’s trials, not just triumphs, make a motion emotionally, not just materially, assign clearly defined missions to all, avoiding mission overlap and confusion and the make your scheme drive your government; not the reverse” (McNeilly, 1996, p. 119).\r\nJim skinn er, CEO for McDonalds and winner of the 2009 CEO of the Year award is greatly admired and willingly followed by his employees more or less the world and thus a great example of a character based leader attributing to McDonald’s global successes. Skinner, who began his career with McDonalds in 1971 as a radiator grille cook was named CEO in 2004, at a tumultuous time for the company. Skinner acted quickly to reach the company around and in result amid 2004 and 2008 McDonald’s revenues climbed 41. 1 part in quadruplet years, and net income jumped by 81 . 3 percent (Top Executive, 2009).\r\nThe top nominees for CEO of the year are judged by such criteria as; leadership, ace, ability to outperform and for their commitment to employees. It was no surprise to those who knew and worked with Jim Skinner that he had excelled in every category. After receiving the award, Skinner acknowledged the deport his leadership team, along with the entire McDonalds system, stating â€Å"Together, our franchisees, employees and suppliers make up what we call our three-legged stool, we succeed only when all three legs of that stool are strong, aligned and acting at the highest levels” (Top executive, 2009).\r\nIn closing, Skinner noted that while the challenges of leadership have grown more complex in the multifaceted business climate, holding fast to fundamental principals will serve todays global business leader well (Top Executive, 2009). The character based leader of today’s successful global firm provides effective leadership in turbulent times, Sun Tzu refers to this as ‘moral put to work’ stating in The Art of War, as cited within McNeilly (1996), â€Å"By moral influence I mean that which causes people to be in harmony with their leaders, so that they will accompany them in life and unto death without fear of mortal peril. Skinner possesses moral influence among his employees, an important principle that will undoubtedly ad vance McDonalds in global markets around the world. Christian Values At the minimum, companies poised for global success, will adopt a mission statement. Ideally, these companies will have a statement of value. One organization that is not only global, but transnational †foundation Vision world-wide has a statement of values that serves as moral compass in decisiveness making and strategic planning.\r\nIt states that WVI’s values are to â€Å"Bring a Christian, community-based, child-focused HIV and AIDS response, reflecting God’s unconditional love for all people and the affirmation of each individual’s high-handedness and worth” ( universe Vision International, 2009, p. 2). It is these types of clear statements of vision that removes the act work from the Christian Business Praxis model. Additionally, companies need to look at the characteristics of their organization and the values their leadership possesses to ensure whether or not the decis ion to global is in the best interest of the organization.\r\nSome examples are: Benevolence- For many organizations benevolence is the primary reason for going global. This was certainly the case of bicycle manufactures and APU alumni ACIRFA, who after going on mission to Africa saw a need for transportation and found a way to discover that need. Stewardship- Stakeholder theory, which seems to dominate most modern business decision making, indicates that it is unethical to go global without first considering the clashing on all of your stakeholders.\r\nClearly, one’s shareholders are his or her primary stakeholders. However, one must be mindful of the fact the fact that the organization is also the steward of its employees. And, to that end the organization has a province to plan responsibly and minimize risk to those employees. As such, it is important for organizations to ensure that they are balancing potential profitability with the potential of not serving some of th ose under their care. Collaboration- This is a particularly useful skill if an organization is considering joint ventures.\r\nIf, however, the organization has found that that the leadership of the organization or the organization as a integral is particularly weak in this area this is an indicator that a joint venture is not ideal. Integrity- The challenge associated with integrity (assuming that your organization possesses a great deal of integrity) is that one doesn’t know the off-shore partners and vendors one’s organization will be dealings with. radical relationships will need to be established, and with that avow will need to be cultivated.\r\nManagement skill- For every ounce of management skill it takes to manage domestically it takes a pound to manage off-shore. This is because there is an completely new set of challenges and risks. There are lyric barriers in many cases. There are currency fluctuations, political risks, supply chain issues, and a whole host of challenges that one may not have realized existed even with extensive due diligence. Passion- The type of passion we are addressing here is the type associated with buy-in.\r\nIf all members of the executive management team have not bought-in to the idea of going global it is going to be very difficult to have a great deal of success. Leadership must be torrid about going global. They must be excited, and they must be convinced that this is the future of the organization for global efforts to be successful. Preparation- Preparation is the key to success in going global. It may be fine to unhorse out by simply exporting a few items. However, as demand increases, organizations will find that the need for strategic planning and preparation will also increase.\r\nShould a company wish to enter into either a joint venture, licensing agreement or build facilities off-shore, extensive due diligence involving extraneous consultants will be necessary. Zest- As we have suggested, going global is not for the faint-at-heart. Leaders have to be willing to take risks, and moreover leadership should breathe in others. Going global is not an easy task, great planning and preparation are integral. There will be many challenges and many hurdles and in many cases there will be more reasons to quit than stay the course.\r\nTherefore, bladder fucus is a obligatory for going global. Recommendations Before making the decision to go global, heed Alexander and Korine’s advice, and ask three questions of your organization: 1. Are there potential benefits for our company? 2. Do we have the necessary management skills? and 3. impart the costs outweigh the benefits? The answers to those three questions will give the organization a starting point from which to determine if going global is in the best interest of the organization as a whole.\r\nNext, ask the usable questions- Is going global necessary for the growth and/or survival of our organization? Is globalizati on worth the various risks involved? poop effectively and protect our intellectual property in a cost good manner? Will the complications surrounding operations be overwhelming? What do we stand to lose if we fag out’t go global and if we don’t who within our competition will? What possible ramifications exist at the expense of not going global? Are we losing out on a learning opportunity by not going global?\r\nIs there unsecured talent out there that we may miss out on by not going global? Then ask the company, how much the above is worth in equipment casualty of opportunity cost? If we don’t utilize our time and resources in going global, how then will we allocate said resources to growth? Then ask your company the values questions- Is going global a responsible and ethical management decision? Can we trust that we will find people of integrity in the global economy to do business with and if so, do we possess the necessary passion and zest to be successf ul at such as risky cross-border venture?\r\nIn addition, have we well prepared, and will we continue to be, throughout every stair of the process? After asking the above questions we recommend conducting a detailed SWAT analysis where all possible risks and rewards involved with going global are fully vetted, then establish that all Christian perspectives are clear and present and finally, if the decision to go global is made, go forward while applying Sun Tzu’s Art of Business principles.\r\nIn conclusion, Alexander and Korine (2008), suggest that we should not expect the influx of globalization failures to stop or improve any time soon. Making the valid point that, companies in a variety of industries will continue on in their reckless pursuit of global strategies, activists will continue to cause change and disruption and less than character based leaders will stand so-and-so flawed globalization strategies, all the while, customers will eternally be demanding select a ttention.\r\nWhile it is undeniable that globalization is a seductively daunting opportunity with promises of increase power and unlimited benefits looming about the mere position and that while even the best and brightest leaders, heading up the most well prepared companies may finally succumb to its pressures, make the cross-border transition and possibly fail at it, keep in mind- sometimes to fail is necessary to succeed. References Alexander, M ; Korine, H. (2008). When You Shouldn’t Go Global. In Bartlett, C. A. ; Beamish, P. W. Transnational Management- Text, cases, and readings in cross-border management. 6thed. p. 105-112). New York: McGraw-Hill Irwin. Consumer goods: Wal-Mart cashes in. (2009). Business India Intelligence, 16(12), 3-4. Retrieved from http://search. proquest. com Fraser, R. (2006). mart Christianity: Discovering the kingdom purposes of the marketplace. 2nd ed. Kansas City: MO: New Grid Publishing. Ghemawat, P. (2000). The Globalization of CEMEX. In Bartlett, C. A. ; Beamish, P. W. Transnational Management-Texts, cases and readings in cross-border management, 6thed. (p. 146-166). New York: McGraw-Hill Irwin. Julius, D. (1997). Globalization and Stakeholder Conflicts: A corporate perspective.\r\nInternational Affairs (Royal Institute of International Affairs 1944-). Globalization and International Relations (Vol. 73, No. 3, p. 453-468). McNeilly, M. (1996). Sun Tzu and the art of business: Six strategic principles for managers. New York: Oxford University Press. World Vision International. (2009). Global hope initiative annual report 2009. Retrieved from http://wvi. org/wvi/wviweb. nsf/0CF6565756AEA942882575590061CEAC/$file/ Hope_Annual_Report_Exec_Summary_2009. pdf 2009 chief executive of the year. (2009). promontory Executive, (242), 68-70. Retrieved from http://search. proquest. com/docview/212098908? accountid=8459\r\n'