Industry competitiveness view of global strategy versus the resource-based view
Global strategy refers to the conscious and tactical plans laid by organisations in a bid to fit into worldwide business arena (David, 2012, p. 49). Companies have embraced different methods and views of how to exert authority and gain the upper hand in terms of competitiveness on the global platform. The two commonest approaches are the competitiveness and resource-based views of global strategy. Despite their effectiveness, both differ enormously in terms of foundational principles. More importantly, resources used to help organisations acquire a favourable state as touching global strategy can easily become weakness or liability that propels companies in the unexpected direction (Ghemawat, 2013, p. 80). This paper contrasts the competitiveness view to the resource-based approach and critically assesses the opinion that resources can actually turn into liabilities to pull organisations down, providing examples for both occasions.
While the resource-based view emphasises on the assumption that a firm can only acquire a competitive edge by maximising the resources at its disposal (Ghemawat, 2013, p. 81), scholars backing the competitive view believe that firms have to follow certain principles to achieve the same goal. Scholars from the competitive school of thought emphasise on the need to foster efficiency in terms of economies of scale geared towards access to a wider market and clientele base (Peng, 2013, p. 80). Despite arguments that both schools of thought provide similar results, practical evidence from existing organisations
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So, there should be an efficient and optimum use of resources with the modernised techniques that provide them competitive advantage over the competitors and make them an efficient organization.
How does this case illustrate the threats and opportunities facing global companies in developing their strategies?
Source: Roderick E. White and Thomas A. Poynter, “Organizing for Worldwide Advantage,” Business Quarterly (Summer 1989), 84–89. Adapted by permission of Business Quarterly, published by the Western Business School, the University of Western Ontario, London, Ontario, Canada.
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It is also perhaps not feasible to evaluate the attractiveness of an industry independent of the resources a firm brings to that industry. It is thus argued that this theory be coupled with the Resource-Based View (RBV) in order for the firm to develop a much more sound strategy. It provides a simple perspective for accessing and analysing the competitive strength and position of a corporation, business or organisation.
Our economic development will forever be defined as our ability to succeed internationally. PwC forecasts India’s real annual GDP growth until 2050 at 8.9 percent, Vietnam’s at 8.8 percent, and China’s at 5.9 percent. The list of fast-growing emerging markets goes on and on. The U.S. forecast is a meager 2.4 percent, comparable with most Western economies. The domestic companies that are likely to see incremental growth in the coming decades are those that are not only doing business internationally, but that are developing the strategic skill set to master doing business across cultures. Cross-cultural core competence is at the crux of today’s sustainable competitive advantage. For example, political environment will tell us, as to how and why political leaders control, whether and how of international business. Legal environment, both national and international will tell us about many kinds of laws by which business firms must work. The cultural environment will tell us about attitudes, beliefs and opinions important to business people. Economic environment will tell us about the economic system being followed by the host country, which may or may not be different from home country. It will also explain the variables such as level of development, human resources, Gross Domestic Per Capita and consumption patterns that determine a firm’s ability to do business. Geography will tell us about location, quantity, and quality of the world’s resources.
In week five we learn about the importance of globalization and how it can help your company’s profits grow. There are many things to look at when selling globally as different cultures need to be looked at differently when making a marketing strategy. If you understand how to market your products to different cultures in different countries you can take advantage of the profits that can be made through globalization.
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This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA, 2010).
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