Companies look for growth wherever they can find it. Expanding from the local, familiar market to the global marketplace gives a growing company access to more customers, new talent, and greater possibilities. However, there are competitive challenges that companies must be prepared for in order to find success during their global expansion. Show
Here are some ways that a company can gain a competitive edge and find success in the global marketplace. Defining the Global MarketplaceIn most instances, the global marketplace is centered around national or regional competitive spheres. Arthur Thompson, A.J. Strickland, and John Gamble are successful business executives who have co-written over a dozen educational books on business strategies together. According to them, “Global competition exists when competitive conditions across national markets are linked strongly enough to form a true world market and when leading competitors compete head-to-head in many different countries.” Entering A New MarketWhen companies decide to compete internationally, they should not automatically use the same strategies that they used in local markets. Thompson, Strickland, and Gamble suggest that companies should consider:
A company’s approach to strategy is key to gaining a competitive edge. A survey report from Oxford Economics, Manufacturing Transformation, shows that many executives are rethinking their current strategies in order to go beyond operational excellence to gain a competitive edge. As companies explore new markets, knowing how to adopt a strategy to fit new markets is key. Understanding Local Labor LawsCompliance with local labor laws is one of the most important aspects of a company’s global expansion. Every country has slightly different standards for how employers should treat employees. For instance, countries such as Japan, France, and Brazil make it difficult for companies to dismiss a worker. Companies that fail to comply with local labor laws in countries where they have operations may face fines, work stoppages, or lawsuits. One of the best ways to ensure compliance in global markets is to work with a global Employer of Record to help navigate labor laws in new markets. This Employer of Record solution helps your organization avoid needless costs and delays, so you can focus on international success. Speed to MarketIf a company is unable to enter a market quickly, it may not see the success it expects, no matter how innovative its product and service offerings are. A slow speed to market can result in a company’s product or service being considered outdated, especially if their competition was able to enter the market faster. Here are some ways to improve speed to market:
Best Practices for Success in the Global Marketplace1. Scour Emerging MarketsInternational companies based in mature economies can use their relationships in emerging markets to speed along innovation. Whether a company chooses to bring new products from emerging economies into mature ones or is taking current offerings into a developing country, emerging markets are ripe with opportunities. Taking advantage of these growing economies can give a company the competitive edge they are looking for in global markets. Strategically choose an international market tailored towards your company’s global expansion goals. Download “The State of Global Expansion 2019 Report” now. 2. Form Strategic PartnershipsThompson, Strickland, and Gamble write that strategic partnerships can help by “filling gaps in technical expertise and/or knowledge of local markets.” As we mentioned above, partnering with an Employer of Record gives companies access to in-country experts. A global Employer of Record not only provides insight into local labor laws but also helps companies on-board top talent in their desired country, even in countries that might face labor shortages. 3. Innovate EverywhereInnovation should be a part of every aspect of a business. Companies need to innovate at every level, especially when planning for a global expansion. The key to innovation is to develop a strategy that harnesses market trends, as opposed to reacting to them. Companies that are able to do so successfully as they expand into new markets gain the edge over their competition. By employing a strong strategy, understanding local labor laws, focusing on speed to market, and using partnerships to drive efficiency and innovation, companies can gain the competitive edge they are looking for in the global marketplace. With a reach that touches 185 countries and counting, Velocity Global can help your organization realize its global growth objectives no matter where they may lead. Our fully customizable suite of global expansion services that include our global Employer of Record solution can have you up and running in your new international market in as few as 48 hours—with savings up to 60% when compared to entity establishment. Are you ready to go global? Let’s make it happen together. What are the 4 global strategies?Four main global strategies form the basis for global firms' organizational structure. These are domestic exporter, multinational, franchiser, and transnational. Each of these strategies is pursued with a specific business organizational structure (see Table 16-3).
Which would be the appropriate strategy for companies to use to compete in the global marketplace?MNCs can successfully compete globally by aggressively pricing products at the sacrifice of product features. When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market.
What are the different strategies for competing globally?There are three main international strategies available: (1) multidomestic, (2) global, and (3) transnational (Figure 7.23 “International Strategy”).
What are the five strategies a company can use to compete internationally?There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Table 7.11 “Market Entry Options”).
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