For this reason, not all business school graduates are welcomed, only those with cross-cultural perspective are In high demand, those that we call “Global elite”. So far. e Global Management course has broadened my awareness of multicultural business contexts. I have gained a great deal of knowledge, skills and abilities about doing business in a multi-context situations, manage a company without forgetting how to manage Its human resources and motivate them to effectively coordinate their efforts and get things done. Also, The most important lessons that learned at this point are: 1. Distance dimensions In evaluating the targeted market. 2. Adapting your business model when penetrating emerging and transitional markets 3.
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The importance of the organizational arrangements in the promotion of the company strategy. Those three lessons made me believe that business and army are two fields that fit perfectly together. As Julius Cesar declared after he won his war “Veni, Vidi, Vici” which Is d Latin expression meaning “l came, saw, I conquered”. In those three lessons, I learned a lot about the VIDI part, where all companies have to be aware of the context they want to penetrate, by analyzing a number out features such as the CAGE where distance matter, elaborating an effective structure and adapting a inning strategy that fit that market.
Four years ago, our company decided to launch Its products such as flour and canned sardines in two new markets; Guinea and Mauritania due to their attractiveness. After nine months of doing business, the outcomes were positive In but not in Guinea where we stopped the activity. The reason that explains this failure must be the lack of evaluating global opportunities In our strategy when choosing prospect markets. If we analyzed: Cultural Distance Administrative and political Distance 1!
Geographic Distance Economic Distance We would know that it is too risky to attempt the Guinean market, and avoid the mistake. The second lesson is more about deciding which strategy to opt for when attempting an emerging market. It is about deciding whether to: Adjust our business model without neglecting our competitive advantage. Avoid investmentin case it is unfeasible. Completely recast the institutional contexts when we have the power to do so. This is a very important component for a successful company.
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In Morocco for example, a lot of multinational companies decided to replicate their business model room developed country, only 26% turn tobe successful, especially French companies, whereas 74% fail by doing so, a case in point, Metro carry & cash, they did not bothered about understanding the local knowledge and tailored a business model that will map institutional voids. In 2010, they sold their business to franchisee Label’ Vie, that developed a different strategy allowing the business to become profitable by increasing it’s revenues by 35% in the first quarter.
Each nation has it’s own institutional voids, so a multinational when deciding to implement its business abroad must make some modification in their business model to fit with the market, the only thing that they must not change is their core business propositions, to keep its competitive advantage and enjoy its global scale and global branding, that is the secret behind the success of Coca-Cola and P&G worldwide. And for this reason defines it, and I argue that it is national, not flat. What Mr Friedman emphasis es, lacks vision and weigh into the factual business world.
He builds one point in his video and book, that nowadays an enormous proportion of international business come cross off shoring. The third lesson, open my eyes to the question of whether strategy follows structure or is it the other way round. I do not need to solve this debate, but what I concluded is the important interconnections between those two notions. 2 The World is Flat. Thomas L. Friedman explains how the flattening of the world happened at the dawn of the. The world is flat: a brief history of the 21 century.
New York, Farra, Straus and Giroux. 2! When a multinational formulate its strategy, they first identify the relative strengths nd weaknesses of the Country-specific advantages and the Firm-specific advantages, to implement their strategy in an effective structure. A company pursuing a cell 1 strategy of economic integration will opt for a centralized and hierarchical structure. In contrast firms pursuing marketing and differentiation strategies, positioned in, will apply a decentralized structure, and giving more autonomy to its subsidiary managers.
In cell 3, a company may combine a centralized and decentralized structure to give a place for a matrix structure, where success depends on three criteria: Clarity, continuity, and consistency. The absence of one criterion, will lead to troubles as happened to Kent Chemical. Part II: This case study examines the possibility for Coe’s, the lease-to-own chain, to expand its activity abroad and to look at potential growth to satisfy its shareholders desire.
Stan Windham, as chief executive officer, finds the Mexican market very appealing, Whereas Carl (CFO) is warning the riskiness of the move, and urge to do it the safe way, and continue to grow through nationwide expansion, pointing to the Puerto Rico venture failure. First, I would like to mention that the failure Coe’s underwent in Puerto Rico must be taken as a positive experience, not an argument to avoid any temptation to expend the business abroad.
Surely the company from this failure has learned the importance to take into consideration different dimensions when penetrating a new market, and to analyze its CAGE distances, also to create a wining strategy that will fit the market and take into consideration all of its characteristic and reflect them on the Coe’s business model used in that market. If we look at the first option, which is to stay in the U. S. Coe’s 1000 stores are nowhere near saturation, since we are talking about the same-targeted customers as Wal-Mart that currently have more than 4700 chain stores in the same market.
Another advantage that Coe’s can use to its favor: Aubrey’s experience in dealing with Coe’s customers and knowing the company culture and the Mexican culture, his ability to speak Spanish and training staff, and his enthusiasm regarding the expansion. In the other hand, different challenges may arise such as culture, language since Spanish is the principal business language, and currency. Other difficulties combine he Mexican bureaucracy and a troublesome tax system. Soliciting expertise will be recommended to avoid disastrous mistakes.
What Coe’s must not forget from its Puerto Rico failure, is to adapt its business model to fit the country specificity. The monthly collecting payment will be a tedious procedure, so the company has to include incentive in its revenue streams to push customers pay items back. And also, Coe’s can negotiate with the local state to compensate the “shrinkage” insurance in return for the tax revenue, with the commitment of adding location within 12 months if defined targets are achieved, ice Mexican citizen lives will improve having that kind of business.
Regarding the structure, Coe’s can opt for a subsidiaries structure in the early days, and then can switch to an international division structure. This movement will be a major learning opportunity and point of change for the firm to become multinational, whether prosperous or not. In fact, a fruitless venture abroad may afford helpful knowledge for the future. Still, if they have positive 3! Source:! data. world bank. org/country/mexico! 5! outcomes it will open the doors for an expansion on the worldwide level, and exceptional growth. 6!See More on Globalization