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International business strategy and organisation
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Organizing for worldwide Effectiveness: The Transnational solution : Companies with international operations must engender global coordination and flexibility, to be able to remain competitive in increasingly global setting. On the other hand traditional organization practices provides different approach to the problem. The author illustrates this dichotomy in approach through the experience of two prominent electronic market competitors Philips, an example of decentralized federation structure, which is well suited to the promotion of national flexibility and Matsushita, a company with a centralized hub configuration, which ensures high efficiency. Reasons for Philips Success. Philips success can be attributed to making local management effective. 1) Hiring talented individual for the role of Entrepreneurial expatriates and giving them principle autonomy. 2) Integrating diverse functions within subsidiaries by including multi-disciplinary individuals, such as technical, commercial, and financial, in decision-making processes. 3) Creating autonomous overseas business unit subsidiaries, by dispersing responsibilities and decentralizing assets, to improve local responsiveness. Reasons for Matsushita’s Success. 1) Gaining inputs of the subsidiaries into organizational management practices by maintaining strong bi-direction linkages between Subsidiaries and HQ. 2) Substantiate the positive correlation between development efforts and market demand. 3) Suitable navigation of responsibility transfer through various department, from conceptualization to Marketing. Unfortunately, both these strategies have strategic drawbacks. He argues that a successful global entity will maintain, mix of both approaches, a transnational strategy characte...
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...) For fire control products it was recommended that R&D be centralized and product sourced locally, because fire prevention was highly regulated industry and required close association with nation regulatory bodies and control agencies. Additionally, they recommended that the company evolve to a more differentiated organization using decision matrix tool defining core decisions business by business and then creating a process to analyze how to exercise decisions. Localization of marketing programs needed by consumer product line to respond to the consumer needs and varying competition, (2) Global control required by medical plastics business, (3) the fire prevention was a highly regulated industry, which should use both the local way (R&D) and the global (Coordination) way. Use of decision matrix was also emphasized to evolve into a more differentiated organization.
This business uses ANSOFF MATRIX for a growing business in the market and it uses penetration by increasing sales and profits in its stores by competing in the market using its products and services. RSPCA uses this strategy to increase the percent of sales without changing their product or service and it carries this out by improving the quality of its products and services so it meets customers’ needs and wants. It also carries out by attracting competitor’s customers in order to sell its products and services to the existing customers. Product development in this business is when there is a major change in the product or service. This is carried out in order to offer new product or service and to be marketed to existing customers
The next step is the growth stage. In this stage product growth is monitored and big investments are made. Maturity stage the growth of the outputs is significant. For the company to ensure product survival in the market and gain a competitive advantage over competitors it has to incorporate product differentiation. The final stage involves product decline stage. In this juncture product sale goes down and the product identification
Porter (1997) suggests in order to gain competitive advantages in the changing business environment, it is essential to design a generic strategy for the business: product differentiation or cost leadership. The competitive strategy is determined at round 2, when recognised our rivals held whole product profile which was the product differentiation strategy. To differentiate our strategy from rivals for competitive advantages, Digby designed to imply the cost
With a thorough situation analysis of the internal environment versus external environment and a SWOT matrix, a set of organizational objectives is created for the company to retrieve best result in resolving the issues and problems.
An increase of international trade, Due to global competitive environment, organisation addresses the rapid changes and complexity. Expansion in different location, launching new products, entering new market and this enables organizations to respond and
When it comes to doing business internationally the decision making is more complex. There are many interactions between each country that need to be addressed. In order for a business to be successful in the international market they need to examine and analyze all the facets of their company. They need
However, this vision generates an overlapping problem between the marketing department and the product development department. The marketing department, among other duties, is responsible for the identification of new opportunities and also to assure the development of new products. Unless these activities are extremely well coordinated with the product development department, there will be misalignment in the strategy of the EPD. Ultimately, this misalignment will affect a third department, i.e. the manufacturing department, since it is directly involved in the product development process.
Firstly, Philips’ main capability is the decentralised structure with strong local subsdiaries, which is the National Organisations (NOs). Philips established NO after the war to replace the destroyed industrial plant in Netherlands. During this period, electronics was seen as luxury good and trade barrier between nations was high. The decentralised structure supports Philips in competing effectively with local competitors and enables them to adapt with the diverse local market. Each NO had the their strength and resources to sense and perform adaptive marketing as well as develop their product to respond the local differences. It is reflected in its television product. The first color TV is created in Canada, while the first stereo TV is created in Australia and the teletext TV is created in UK (Bartlett, C. A., 2001). The strong independence of these local subsidiaries also reinforced by the communication barriers during that period (Bartlett, C. A., Ghoshal, S., & Birkinshaw, J. M., 1995). The decentralised structure gives high degree of independence in each international unit, including decision-making autonomy (Daft, R. L., 2009). In the case of Philips, NOs as local subsidiaries had more power over the Product Departements (PD), as Philips gave NOs financial autonomy as well as liberty to set their own target. Thus, the NOs ability of autonomous marketing and product development function had become Philips m...
Multinational enterprise (MNE) is “a company that is headquartered in one country but has operations in one or more other countries” (Rugman and Collinson 2012, p.38) that has at least one office in different countries but centralised home office. These offices coordinate global management in the context of international business. MNEs have increasingly essential influence on the development of the global economy and coordinate with other companies in different business environments. However, there are many issues involved with how MNEs operate well overseas, especially in emerging markets (EMs) (Cavusgil et al., 2013, p.5).
The international management structure and an appropriate organizational design for managing people in a cross-cultural environment are made up of an effective scheme. During these activities, companies face the technical, political, economic, linguistic, and cultural differences have to go through practice. For a small business to go after any international activities, even if a couple of these international challenges, or simply to show up in the competition, while active in the local community in their own private market to cooperate with a foreign company.
Managerial decisions are an important component in achieving the objectives of the organization. The success or failure of a business depend upon the decisions made by managers (Jurina, 2011). Today’s increasing complexity in the world of business brought forth greater challenges for both the firm and its managers. The rapid rate of technological and digital advance as well as greater focus product innovation and processes that influence marketing and sales techniques have contributed to the increasing complexity in the business environment.
In modern days, organizational architecture plays a key role in order to allow companies to get success in the market. Organizational architecture, also known as organizational structure, defines as a structure that where the specific company whether works roles, decision making or responsibility are centralized, delegated or coordinated. The organizational structure also identify how the information from level to level within the company. IKEA is one of the international famous firms that designs and produces home furniture such as bed frames and desks. The company also is the leader in retailing furniture and has become the largest furniture retailer over the globe. Therefore the structure of a company is an important factor to achieve a rapidly growth. This paper aimed to describe the IKEA’s organizational architecture and provide analysis that whether any recommendations or changes have to make based on current information.
In 2015, President Barack Obama addressed the United Nations General Assembly and talked about the significance the United Nations has had since its creation in 1945, claiming: “This institution [U.N.] was founded because men and women who came before us had the foresight to know that our nations are more secure when we uphold basic laws and basic norms, and pursue a path of cooperation over conflict. And strong nations, above all, have a responsibility to uphold this international order.” President Obama argues that the U.N. is the glue which holds the international system together and promotes mutually beneficial outcomes for the world. The fact that an international organization (IO) such as the U.N. has endured for over 70 years is some
Nowadays, business is set in a global environment. Companies not only regard their locations or primary market bases, but also consider the rest of the world. In this context, more and more companies start to run multinational business in various parts of the world. In this essay, companies which run multinational business are to be characterized as multinational companies'. By following the globalization campaign, multinational companies' supply chains can be enriched, high costs work force can be transformed and potential markets can be expanded. Consequentially, competitive advantages of companies can be strengthened in a global market. Otherwise, some problems are met in the changed environments in foreign countries at the same time. The changed environments can be divided into four main aspects, namely, cultural environment, legal environment, economic environment and political system problems. All the changed environments make problems to multinational companies. In particular, problems which are caused by changed culture environment are the most serious aspect of running a multinational business. This essay will discuss these problems and give some suggestions to solve them.
Some decisions prove to be vital and any miscalculation that may be involved may prove dire for the individual or the organization. In identifying the criterion to use while evaluating different decisions, many factors pertaining the structure should be considered. The pros and cons of every decision made should be evaluated to ensure that the option chosen has the most positive effect on the individual and the organization. Some of the activities that may require keen decision making include project development, finance and operations. With the knowledge attained it will be easier to cope with tough decisions that may come up in my career. Decision making models may be generated to give an in depth view to the problem and also provide critical analysis ability. It is also vital noting that for those in managerial positions, they face a bigger task in decision making. A good understanding of the business function and structure will provide an in depth knowhow to those that have studied the