A business strategy is a combination of actions and decisions taken performed by the business to achieve business goals and accomplish a competitive position in the market. The vital components of any business strategy will be core values, vision and business objectives, SWOT analysis, tactics, measurement, and resource allocation plan.
Why is a business strategy needed?
Globalization has changed how businesses are conducted and visualized. More organizations are now connecting with the international market. Slashed tariffs, enhanced capital mobility, and improved communication have made foreign business expansion easier. However, there are various factors involved in global business expansion such as labor laws, foreign employees, stiff competition, and government jurisdiction. Successful and efficient business strategists will embrace a well-planned business strategy that caters the international requirements as well as its abilities. Effective business strategies serve as blueprint for various aspects of running a business from organizational structure to hiring. When organization’s vision and strategy match, it indicates that everyone is working to accomplish the same goals.
What are the top global business management strategies?
Provided below are the strategies that represent a unique approach to globalizing business.
This is also called an export strategy that focuses on exporting services and products to international markets while maintaining the headquarters for production in the home country. This means that the need to invest in staff and facilities overseas is avoided. This business strategy is often followed by local and small businesses who seek to export resources to global markets such as wine companies.
This business strategy invests in building a presence in the global market and tailoring the services or products to the local market. Organizations adapt their offerings and products and also reposition their marketing strategies so that they can engage their foreign audience. The headquarters of the company are often maintained in the home country; however, the company may set up localized headquarters overseas to manage relations with international customers. For instance: – ‘7-Eleven’ uses this strategy and tailors payment methods, marketing and product selections to the regulations and values in each country where it operates.
This global strategy and leadership approaches combine elements of multi-domestic and international strategies. This means that the company is allowed to expand in international markets with full-scale operations with its headquarters based in the home country. However, a transnational strategy used by businesses does not change according to the local preferences. For instance: – Coca-Cola is the same in every country with the same taste, formula, and logo, only the language on the packaging is changed in this case.
What are the benefits of a successful global strategy?
Defining and implementing an international global strategy and leadership is a challenging task, however, the advantages of a successful business strategy outweigh the efforts.
A global business can assign different tasks to different national teams who are efficient to work on those tasks. When a team is assigned the right task by a business strategist, who they are best suited for, there is a possibility for efficiency and reduced costs.
Better brand image
Another key benefit is the ability to increase credibility amongst a global audience. Successful organizations can trace their growth in part to building a trustworthy relationship with a wide audience. For this, businesses need to understand a market intuitively, which will grant unparalleled local knowledge. A marketing strategy must also be created by business strategists to communicate the brand to a new audience for long-term marketing goals. In addition, a strong web presence and good customer service when combined provide a basis for global success.
Using government incentives
Various countries around the world offer incentives for organizations looking to expand their global operations as it brings new business to their countries. One such incentive is lesser taxes after deductions. Due to this, many U.S. businesses take an opportunity to expand their business overseas to reduce their income tax rates.