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Global Strategic Management

The modern economy is globally connected

From a business perspective, the primary incumbent in an international business environment is the multinational enterprise (MNE), which is a company that pursues strategic success in global production and sales (i.e. operating within a number of country borders). The number of examples of this type of firm is constantly growing. From fast food chains like McDonald’s to auto manufacturers like Honda to smartphone designers like Samsung, the number of international players in most markets is constantly on the rise.

Why Expand Globally?

Global expansion is costly and complex. To offset these costs and risks, organizations must have strong reasons for developing a global strategy. These reasons generally fit one (or more) of the following three strategic areas:

  • Global Concentration – Depending upon the competitive concentration of a given industry in a given region, it may make sense to enter a market where competition is relatively scarce (and demand is high).
  • Global Synergies – Some organizations have highly developed competencies that are easily scaled. In these situations, global expansion means natural synergy.
  • Global Strategic Motivations – Other reasons for expansion to a given country may exist strategically, such as developing new sourcing sites for production or acquiring strategic assets in a given region.