The global business environment is drastically growing with the advance in technology. This dynamic environment calls for diversity and strategic planning by managements of companies that need to operate at the international level. Adoption of the dynamic technology (Information and Communication Technology) is a serious factor influencing success or failure of an organization in the global market. Discussed below are challenges organizations faces when moving international and how they survive the global markets, as presented from various sources.
In modern business environments, management of global companies has become a standard issue worldwide. In their book, Adler and Gundersen (2007) explain how modern international marketplace has become more competitive and how enterprises need to strategize for success in the market. They indicate that “between 1995 and 2020” they will be a significant shift in the economic strength that will be experienced in a century and more as pointed out by “The Economist” (Adler & Gundersen, 2007, p. 6). Adler and Gundersen (2007) also indicate that recently, companies have formed strategic alliances that contribute to increased global operations and better competitive advantages. The two stress on the formulation of comprehensive strategies for corporations to succeed in the international market.
There has been a rapid evolvement in production, research and development, marketing, and finances. With this in place, global organizational management of human resource at the international level has developed substantially (Adler & Gundersen, 2007). In their book, Adler and Gundersen (2007) explain how organizational culture affects a firm’s operations and success in the international environment. The two discuss the phase involved in the global development process, which include domestic, multi-domestic, multinational, and finally the global phase. Firms consider the dynamics of the international business competitiveness and strategies on skipping some of these phases for a rapid positioning for a maximum competitive advantage globally (Adler & Gundersen, 2007). The book also elaborates more on cross-culture management where managers need to be more sophisticated to make significant decisions. It also gives various effects of culture on organizations about global environments.
In the dynamic business environment, firms need to consider five primary strategies if they are to survive. According to Wiere (2013), businesses are designed to be stable, coherent and predictable. However, recent factors such as technological changes have contributed to a dynamic business environment, which can be termed as “unpredictable and unstable.” To this effect, firms need to follow specific strategies that are designed to help them cope with the uncertain external environment. Wiere (2013) provides the five top strategies that can help organizations adapt and survive in the modern dynamic business environment.
The first strategy is acceptance. According to Wiere (2013), enterprises should embrace the diverse and vibrant modern business environment and accept that predicting the future is more complex than it was before. She provides the second strategy as constant innovation, whereby, with the changing environment, it is paramount for firms’ management to focus on innovativeness. The other strategy is redesigning the organization structure to become more of agile as opposed to the traditional bureaucratic ones (Wiere, 2013). She goes ahead to state “Big Data” intelligence or knowledge as a key strategy. This is because information is powerful in any business environment especially in the global market. Lastly, Wiere (2013) explains confrontation of disruptions head on as the fifth strategy. Here she states that companies need to focus more on satisfying their customers by continually researching for new ways to deal with the increasing demand. Adopting the above-discussed strategies, as indicated by Wiere (2013), is a “huge step” towards survival in today’s dynamic organizational environment.
In the course “The Global Context of Business,” University of Southern California (2011) provides descriptions of how learning global business related issues are crucial in equipping future managers with necessary skills. The course is one of the many that are taught in most business faculties, which are paramount in explaining the secret behind success in the global marketplace. According to University of Southern California (2011), the course educates on global economics, global strategies and how to practically them in running international businesses.
The course provides an understanding of globalization and its impacts concerning businesses (University of Southern California, 2011). It also provides strategic views of global business issues that need to be handled. It also provides details on how the government policies affect global operations of businesses and how other countries fair in the international market. Learning the course helps one develop skills to analyze strategic problems as well as opportunities in the world context and the competence in anticipation of such challenges and opportunities (University of Southern California, 2011). The course enables learners to appreciate ethical issues facing firms involved in international business.
A study by Barnett and McKendrick (2004) examines the reasons why some companies are more competitive compared to other enterprises. The two also try to predict how large organizations are likely to become feeble competitors compared to small businesses despite the fact that they perform well technologically. The study was done in both small and large organizations under the “red queen” competition model. There was adequate evidence proving that small firms ended up as strong competitors as opposed to large ones that began as technological “giants” but ended up as weak competitors. It was observed that though the large organization had a better competitive advantage, they become weak competitors in the long term. According to Barnett and McKendrick (2004), various theories hold two main logics, which contribute to different dynamic implications.
From the study, it is evident that the choice of logic to guide an organization in the study of competition is a reason where some organizations are more competitive compared to others. Similarly, organizations were not observed to succeed in the global competition from experience in the domestic competitiveness (Barnett & McKendrick, 2004). According to the researchers, organizations have better chances of survival if they are differentiated in several dimensions. The findings also suggest that with more change facilitated by red-queen evolution, comes more “trade-off between positional advantage that isolates an organization from competition and the benefits that originate from the development of new capabilities” (Barnett & McKendrick, 2004, p. 564). The study clearly explains how large and small organizations acquire competitiveness at a global level.
Publication by Cassidy (2006) on the New York Times, explain on how “dumping” crumples the international market for other countries. Dumping is where some companies or countries sell products and services, internationally, at lower prices than how they cost domestically. The publication talks of furniture market at a global level.
Cassidy (2006) indicates how the Chinese were involved in dumping furniture in European countries. The European Union was pressured by Italian and German furniture manufacturers to put in place anti-dumping measures against China. From the publication, only the reliable products that were able to survive the global marketplace for furniture (Cassidy, 2006). Dumping was termed as to bring forth unfair competition in the international market. According to the publication, producing unique and advanced products is one key way to avoid duplications and dumping. Dumping is facilitated through counterfeiting, and if products cannot be copied, then it will be hard to dump them.
Today’s business environment is evolving more drastically. Firms aiming at operating at a global level need to survey the environments more efficiently to come up with sustainable strategies to help them survive the market. Executives at global companies have the obligations of developing these required strategies for their guaranteed success. There are many strategic challenges associated with going international, which needs proper planning for substantial outcomes. Problems like dumping, weak competitiveness, and lack of critical strategies to deal with the dynamic environment, should be addressed profoundly.
From the summaries discussed above, it is evident that business strategies and competitive advantage are the main factors influencing the success of global organizations. They are the primary forces that companies use to respond to challenges in the international marketplace. Additionally, government policies can help manufacturers secure competitiveness at the world market. This can apply where dumping is involved. Similarly, organizations’ management should take the first step in developing strategies to improve their competitiveness internationally.
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