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Chapter 13 globalization and strategy
Reflection: one of the most striking and pervasive changes in business over the past decades has been the internationalization of companies, industries and economics. Increasingly, managers have to operate in diverse cultures, procure materials and components in international markets and face the challenges that new, foreign competitors create. The most effective approach for a firm intent on globalization depend on the strategy it pursues. Manages must recognize that the operating effectively in multiple countries requires them to accommodate variations in the firm’s internal and external context. The managerial challenge that international operations pose, then, is to understand this diversity and exploit the opportunities it presents. The firm’s ability is to meet the challenge effectively will depend on its internal context. Particular on how it organized. Strategy gains from globalization : many firms expand internationally to take advantage in new regions of the globe, of the competitive advantages they already possess in their current market. Sometimes, a firm might choose to expand its operation to create competitive advantage. A firm might also seek competitive advantage from a global presence if it has international customer who prefers to a single supplier. A firm might also create competitive advantage by locating its activities in coutries that give it a cost advantage, sometimes firm move parts of their business to foreign countries to take advantage of differences in public sector policies. Low corporate and personal tax rates generally encourage an inflow of capital. A firm might seek to enter a new market to facilitating learning. The challenge of global efficiency, the challenge of learning, organization to meet the challenge is whether federated vs centralized; building the middle ground, the regional organization, locational advantage and transnational corporation.
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