Complexity of the Global Environment:

Complexity of the Global Environment:
Global strategic planning is more complex than such purely domestic planning.

There are at least five factors that contribute to this increase in complexity:

1. Global face multiple political, economic, legal, social and cultural environments as well as various rates of changes within each of them.
2. Interactions between the national and foreign environments are complex because of national sovereignty issues and widely differing economic and social conditions.
3. Geographic separation, cultural and national differences and variations in business practices all tend to make communication and control efforts between headquarters and the overseas affiliates difficult. This will also results in the Complexity of the Global Environment:
4. Global face extreme competition because of differences in industry structures.
5. Global are restricted i their selection of competitive strategies by various regional blocs and economic integrations.

At the Start Of Globalization

At the Start Of Globalization:
External and Internal assessments may be conducted before a firm enters global markets. External assessment involves careful examination of critical features of the global environment. Internal assessment involves identification of the basic strengths of a firm's operations.

• Internal Assessment
• External Assessment

Internal Assessment:

 Internal assessments involve identification on the basic strength of the firm's operation. These strength are particularly important in the global operation, because they are often the characteristics of a firm that the host nation values most and thus offer significant bargaining leverage.

Identification of the firms own strength:

• Managerial skills
• Capital
• Labor
• Raw Material

External Assessment:
External Assessment involves careful examination of critical features of the global environment, particular attention being paid to the status of the host nations in such areas as economic progress Matching host nation's opportunities with own strengths.

• Economic Progress
• Political Control
• Expansion of Industries
• Favorable Balance of Payment.

Globalization Of The Company Mission:

Globalization of the company Mission:

Few strategic decisions bring about a more radical departure from the existing direction and operations of a firm than the decision to expand globally. Globalization subjects a firm to a radically different set of environmentally determined opportunities, constraints and risks. To prevent these external factors from dictating the firm's direction, top management must reassess the firm's fundamental purpose, philosophy and strategic intentions before globalization in order to ensure their continuation as decision criteria in proactive planning.

Components Of The Company Mission.

What are the Components of the company Mission.

There are commonly six most popular Components of the company Mission.
Let us discuss them one by one:

1) Basic product or Services, Primary Market:
What is our basic product or service, mission should give a hint about product or services. Mission should also tell us in which market we want to sell our product or service.

2) Principal Technology:
Mission should tell us about what type of principal technology is being used for production rendering of services by organization.
Three indispensable components of the mission statements are specification of the basic product or services specification of the primary market and specification of the principal technology for production or delivery.

3) Company Goals:
Three economic goals guide the strategic direction of almost every business organization. Whether or not the mission statement explicitly states these goals, it reflects the firms intention to secure survival through growth and profitability.
There are three main types of company goals.

• Survival
• Growth
• Profitability

• Survival

A firm that is unable to survive will be incapable of satisfying the aims of any of its stakeholders. Unfortunately the goal of survival like the goals of growth and profitability, often is taken for granted to such extent that is neglected as a principal criterion strategic decision making.

• Growth

A firms growth is tied inextricably to its survival and profitability. In this context, the meaning of growth must be broadly defined. Although product impact market studies have shown that growth in market share is correlated with profitability other important forms of growth do exist.

• Profitability:

Profitability is the mainstay goal of a business organization. No matter how profit is measured or defined, profit over the long term is the clearest indication of firms ability to satisfy the principal claims and desires of employees and stakeholders.

4) Company Philosophy:
Basic beliefs and values. The statement of company philosophy often called the company creed, usually accompanies or appears within the mission statement. It reflects or specifies the basic beliefs, values, aspirations and philosophical priories to which strategic decision makers are committed in managing the company. Fortunately the philosophy varies little from one firm to another.

5) Public Image:
Both present and potential customers attribute certain qualities to particular business. And Johnson & Johnson make safe product, cross pen makes high quality writing instruments. On the other hand a negative public image often permits firms reemphasize the beneficial aspects of their mission.

6) Company Self Concept:
A major determinant of a firm's success is the extent to which the firm can relate functionally to its external environment. To achieve its proper place in a competitive situation firm realistically must evaluate its competitive strengths and weaknesses. This idea the firm must know itself is the essence of the company self concept. Both individuals and firms have crucial need to know themselves.

Firms Competitive Strategies In Foreign Markets.

Competitive strategies for firms in foreign Markets.
Competitive Strategies for firms that are attempting to move toward globalization can be categorized by degree of complexity of each foreign market being considered and by the diversity in a company product line.

Niche Market Exporting:
The primary niche market approach for the company that wants to export is to modify select product performance or measurement characteristics to meet special foreign demands. Combining product criteria from the both the U.S. and the foreign markets can be slow and tedious.
There are however a number of expansion techniques and Competitive Strategies that provide the US firm with the know how to exploit opportunities in the new environment.
For example copying product innovations in countries where patent protection is not emphasized and utilizing no equity contractual agreements with a foreign partner can assist in rapid product innovation.
Joint venture:
As the multinational Competitive strategies of US firms nature, most will include some from of joint venture with a target nation firms, AT&T followed this option in its strategy to produce its own personal computer by entering into several joint ventures with European producers to acquire the required technology and position itself for European expansion.

• Pool of Capital
• Patent
• Trade mark
• Management
• Production on Marketing Equipment.

Foreign Branch:
This is also include in Competitive Strategies of a firms. A foreign branch is an extension of the company in its foreign market a separately located strategic business unit directly responsible for fulfilling the operational duties assigned to it by corporate management. including sales customers services and physical distribution.

Licensing/ Contract Manufacturing:
When a firm has right to start a specific business and a company sign a contract of manufacturing that product or a service in a foreign national market is called licensing.
Two major problems exist with licensing. One is the possibility that the foreign partner will gain the experience and evolve into major competitors after the contract expires. The experience of the some US electronics firms with Japanese companies shows that licensing gain the potential to become powerful rivals. The other potential problem stems from the control that the licensor forfeits on production, marketing and general distribution of its products.

Franchising:
Outlet controlled by the head office. A special form of licensing is franchising which allow the franchise to all a highly publicized product or services using the parent's brand name or trade mark carefully producers and marketing strategies.

Wholly owned Subsidiaries:
Parent company and Daughter company it require lot of investment parent company do to gain control and management efficiencies.
Wholly owned subsidiaries are considered by companies that are willing and able to make up the highest investment commitment to he foreign market. These companies insist on full ownership for reasons of control and managerial efficiency. Policy decision about local product lines, expansion, profits and dividends typically remain with the U.S senior managers.