When You Shouldnt Go Global

Running head VETTING GLOBALIZATION STRATEGIES When You Shouldnt Go Global Vetting globalization Strategies Table of Contents executive director Summary 3 Case Overview .. 4 SWOT. Situation Analysis 7 shot Principles .. 8 Christian Values . 13 Recommendations . 5 References . 17 Executive Summary It has been beseechd that companies who exact experienced some level of failure when onerous their pass along at cross-border chances chip in simply attempted the leap chthonian misguided entropy. It is palisaded that such(prenominal)(prenominal)(prenominal) failures be in direct result of inadequately vetting their globoseisation strategies.We commotion an in depth discussion adjoin the orb(prenominal)isation issue and the obligatory strategies, followed by recommendations we believe could help reduce the prevalence of globoseisation failures. We open our discussion with a 2008 cutting study rede the compevery considering worldwideization to ask themselves a se ries of revealing questions. Providing real number life examples, we go on to highlight several underlying wardrobes and argufys oft associated with the process of globoseization.An analysis of the strengths, weaknesses, opportunities and scourges, ofttimes associated with a pissed who is non wide-awake for sphericization, is performed. The often intimidate ball-shaped climate and several mixed assumptions surrounding orbicularization be discussed across a multitude of service industries. We stretch by presenting triple of cheer Tzus principles, as cited in The ruse of Business, as we argue ways in which they atomic number 18 instrumental to any supremacyful planetaryization proceed, providing examples of firms who have histori refery and successfully applied the three principles.Several Christian values and how they be intertwined within the structural mannequin of a successfully orbicularized firm mentioned, noning the importance of a functional guardi anship statement and several key characteristics to be explored onward attempting the cross-border venture ensuring global readiness. Finally, we offer several recommendations that we conclude ar vital in addressing globalization prep bedness, suggesting that with additional research, insight, and after fully vetting the re juveniled risks and rewards, the frequency of globalization failures would be significantly reduced. Case OverviewMarcus Alexander and Harry Korine (2008), argue that umpteen companies do non take the time to ensure that their globalization strategies were non deep misguided. Believing that many a(prenominal) of these failures could be avoided, Alexander and Korine (2008) recommend the play a eagle-eyed think over globalization ask themselves three questions 1. Are there potential benefits for our telephoner? 2. Do we have the inevitable arguement achievements? and 3. Will the costs egressweigh the benefits? Among the arguments made by Alexander and Korine is that which encompasses the pressures surrounding the globalization process.Alexander and Korine (2008), argue that companies spillage global in relation to different commercialiseplace pressures are making serious mistakes, subsequently forced to undo their international investment fundss, often involving the firing of senior management teams. Alexander and Korine (2002), offer up examples of failed strategies much(prenominal) as Dutch financial-services firm ABN Amro, Daimler-Chrysler, and AES a U. S. found energy firm that despite ope demythologized in 29 countries on five continents, agitate to bring added value. The authors relate the struggles of deregulated industries to a g local anaesthetic problem.That is to say that many customer expectations, direct environments, and management practices of a globally meetard service can go dandyly depending on location, in example, citing the standardization of electricity flowing over power grids (Alexander & K orine, 2008, p. 107-109). Every industry has its own challenges with globalization. Issues within the service industry, much(prenominal) as Starbucks, for example, have been that profit margins are equivalent to ab come forth half of that which can be expected domesticatedally.In the IT industry the breastplate of noetic property rights has caused many companies to simply leave countries like India, magic spell the failed consolidation of Daimler-Benz and Chrysler is a perfect example of a failed globalization strategy in the manu accompanimenturing industry (Alexander & Korine, 2008). In discussing some of the strategies that did work, such as GE, and Renaults federation with Nissan, Alexander and Korine caution against focusing on these success stories.Stating that that opus many companies are planning rapid expansion, they are underestimating the management challenges. Their final dapple is that the landscape of players is very different than that of the global landsc ape of 30 eld ago. Todays successful global behemoths, according to Alexander and Korine (2008), are much diversified both in cause and international footprint. Meaning, such companies possess a spaciouser diversity in the types of subsidiaries they own and operating in more countries than ever before. SWOT Analysis When you Shouldnt Go GlobalStrengths Reduced financial, policy-making, currency, and ex diverge risk- Foreign investment involves all of these risks. By refraining from outside(prenominal) investment we avoid these risks. Simplicity of operations- Setting up and maintaining strange investments complicate operations. Refraining from going away global keeps operations more simple. Protection of skilful property- It is very difficult to protect intellectual property in irrelevant countries. By keeping all activities domestic, one is adding a layer of protection to intellectual property rights. Weaknesses red ink of economies-of-scale and economies-of-scope- This according to Alexander and Korine is what is non universe fully realized by going global, and therefore may not be that significant of an issue in many industries. Loss of first-mover advantages- Choosing not to go global may opine making the irrevocable choice to give up the first-mover advantage. This is usually a very small window and a one-time opportunity. Foregoing additional r in timeue sources- For a association that has no additional potential revenue sources domestically, going global may be the lonesome(prenominal) opportunity to gather additional revenue.Foregoing grocery store growth- For companies regard to expand market reach, the choice to forego going global en verify limit their market penetration. Opportunities No financial investment- Refraining from foreign financial investment frees-up those funds for investment in domestic activities. No use of opposite resources- Refraining from going global frees-up all resources (human, etc. ) for use in domestic activities. Threats Loss of market share to competitor- Should ones competition be successful in going global, they may be able to offer similar products at much lower prices thus forcing you out of the market.The competition may also offer superior products at higher prices, and buzz off the market, via the use of superior technology. Loss of talent to competition- In many fields, such as high tech and engineering, the worldwide competition for talent is fierce. mishap to go global often means failure to secure talent. Loss of learning opportunities- Since globalization can take the form of joint ventures. at that place is also the holy terror of the loss of learning from a joint venture collapsener that should be considered. Situation AnalysisSince the seventh century fear have possessed the desire to operate internationally however, those considered truly global, did not start appearing until the past century. With growing stories of globalization successes, follow verti cal as many testaments to failures. Despite the growing number of failed attempts the overwhelming pressure to conduct the ultimate border- little duty has be observe increasingly enticing. Most queen-size companies founded 20 years ago feel battered by many external forces pushing them towards globalization.Driving forces such as the removal of political and regulatory barriers to global trading and investment and the ability to conduct job 24 hours a day from anywhere in the world, draw these logical argument behemoths one step closer to customers in emerging economies (Alexander &Korine, p. 106). Deanna Julius (1997), lists in her oblige titled Globalization and Stakeholder Conflicts a corporate perspective), three primary, macro-level forces, driving the acquire for change as how companies are organized, how goods and services are produced and how they are bought by and delivered to customers.Alexander & Korine (2008), mention that while many of the companies that have r ushed to globalization have benefited, or at the very least have not suffered irreparable damage, some are witnessing major fallout from the move. The authors suggest that while companies often fail from misguided global strategies and an unanticipated level of execution, they could have avoided such failure by seriously addressing if potential benefits even hold up in going global, if their management possess the needful skills and the most rational one, leave behind the costs of going global outbalance the benefits?Alexander & Korine (2008), argue that most companies fail to ask themselves these questions due to previously held false assumptions regarding the virtues of globalization and seduction from the stock market. As previously mentioned, deregulated industries such as those who stick out water, power, and mail service are among those experiencing global failure. Alexander & Korine (2008), suggest that deregulated industries are operating under the misguided assumption s as strong.The greatest assumption macrocosm that, going global bequeath save them money, given they allow foring be sharing resources across their international operations. When in reality, the costs to enter the foreign markets end up outweighing the assumed benefits (Alexander & Korine, 2008, p. 107). Managerial fads are suggested to undermine rational behavior from within a company, thus resulting in sloppy thinking that distracts management from more imperative tasks associated with global success.Properly servicing global customers from a national perspective contributes too many failures given, much attendance mustiness(prenominal) be afforded to a mix or global and local factors simultaneously. Global manufacturing companies are give tongue to to fail due in part to the complexities related to the integration tactics necessary grow and compete better, resulting in costly delays and thus failures (Alexander & Korine, 2008, p. 110). STAB Principles Win All without Fighting Capturing Your merchandise without Destroying It The goal of business is to survive and prosper over a long period of time.Sun Tzu, author of The invention of War, described the strategy in achieving this long term prosperity as an offensive one in which a company must take all under nirvana intact, Thus your troops are not worn out and your gains will be complete (McNeilly, 1996, p. 11). McNeilly (1996), utilizing Sun Tzus principles in his book The graphics of Business, adds that, by taking all under heaven intact you will capture your marketplace thus ensuring your companys survival and prosperity. However, your in demand(p) markets must be defined as such and nothing less than commitment in achieving market lateralisation must be displayed (McNeilly, 1996, p. 1). employment of Sun Tzus principle, win all without fighting capturing your market without destroying it, as cited in McNeilly (1996), has been useful to many of forthwiths leading companies, including g lobal cement producer, CEMEX. Cemexs chief operating officer Lorenzo Zambrano has applied Sun Tzus technique when expanding his cement company in Mexico and abroad. By the year 2000, CEMEX had become the worlds third largest cement company. In Cemexs quest for market dominance they switched to a strategy of growth through acquisitions.In the late 1980s large firms were considering expanding their operations into Cemexs Mexican territory. Realizing the imminent threat CEMEX decided to unify its Mexican operations by acquiring both of Mexicos large cement producers, affording CEMEX access to Mexicos central market and bolstering its exporting capabilities, making CEMEX Mexicos largest cement producer and a threat not to be competed against. While CEMEX won all without fighting, they gained market dominance in Mexico, later fueling their geographic expansion (Ghemawat, 200, p. 155).Deception and predestination Maximizing the Power of Market Information Fore contendledge, as describ ed in Sun Tzus third strategic principle, is not projecting what will happen in the future, based on past occurrences or further conducting a trend analysis. Foreknowledge and maximizing the power of market information is to gain firsthand knowledge of your competitions strengths and weaknesses, know their capabilities, culture and mindset, and obtain a deeper understanding of who their decision makers are and what their future goals and plans are (McNeilly, 1996, p. 0). As Sun Tzu stated in The Art of War, as cited in McNeilly (1996), regarding necessity What is called predestination cannot be elicited from spirits, nor from beau ideals, nor by analogy with past events, nor from calculations. It must be obtained from men who know the enemy situation. In order for a company to succeed on a global scale not only do the ins and outs of their competition exigency to be understood and plotted against, they must also know themselves their own weaknesses, strengths, people and plan s as well as the market in which they will be entering.A corporation deficient this level of foreknowledge should reconsider entering global markets until they better know themselves and their competition. Before Wal-Mart swept our nation, Sam Walton gathered vast amounts of information on his competitors, large and small, before he ever brought competition to their territory. In fact, before Wal-Mart took on then behemoth value retailer Kmart, it was the smaller, local mamma and pop retailers that were seized up.Walton learned about the smaller retailers value chains and dispersion methods, through foreknowledge, he attacked their weakest contingents, where they could not afford to compete, in costs and deceptfully get the better of them where they did not expect it in their own small, rural towns. Defeating the smaller retailers gained Wal-Mart the necessary market share to then surround urban Kmart. Wal-Mart, knowing that Kmarts operating costs was on average 5% higher than theirs attacked Kmart at its cost structure, and won.Kmart was just not able to get under Wal-Marts five smear advantage in operating costs (McNeilly, 1996 p. 25). In 2009, after waiting for a young government with a more bankful political environment and a well paired compact with local market-savvy grocery retailer, Bharti, Wal-Mart go fors foreknowledge and deception to enter Indias market. historically however, Wal-Mart has been unsuccessful in several global markets such as japan due to their inability to adapt to local markets and tastes (Consumer Goods, 2009).As McNeilly (1996), notes in summary, you must learn everything you can about your competition, not merely the facts, but you must also learn about its culture, market, mindset and capabilities. Possibly additional foreknowledge in these areas could be of great use to Wal-Mart. Character Based leadership Providing Effective Leadership in Turbulent Times Character based leadership is not only desirable but it is an attribute than often separates the globally successful firms from the rest.When a company first tries its business hand and people skills at cross-border trading, most of the times are turbulent ones and without efficient and transparent leadership, going global can apace escalate from intimidating to downright terrifying. When we think of character based leaders, often people like Chryslers Lee Iacocca, Steve Jobs (Apple), The Snyder family (In-N-Out burger), Dan Cathy (Chick-Fil-A), Eric Schmidt (Google) and Jim Skinner of McDonalds come to mind, but McNeilly (1996) reminds us that not only are leaders of this caliber unique, they can also be hard to find.It is of no coincidence than that we can more readily abjure companies operating under less than character based leadership, faster than those with it. Companies like Nike, BP, Exxon (Valdez Oil spill) and even Carls Jrs current CEO Andy Puzder, come to mind. Sun Tzu stated in The Art of War, as cited within McNeilly (1996), The everyday who in advancing does not seek personal fame, and in withdrawing is not concerned with avoiding punishment, but whose only purpose is to protect the people and pull ahead the best interests of his sovereign, is the precious jewel of the statefew such to be had. McNeilly (1996) suggests that leaders of this caliber are desirable given they put the require of others before theirs, they have strong and well developed characters. Becoming such a leader is not easy and will require much sacrifice to Build your character, not just your image lead with actions, not just words Share employees trials, not just triumphs, prompt emotionally, not just materially, assign clearly defined missions to all, avoiding mission lick and confusion and the make your strategy drive your face not the contraceptive diaphragm (McNeilly, 1996, p. 119).Jim Skinner, CEO for McDonalds and winner of the 2009 CEO of the Year award is greatly esteem and willingly followed by his employees aroun d the world and thus a great example of a character based leader attributing to McDonalds global successes. Skinner, who began his career with McDonalds in 1971 as a grill cook was named CEO in 2004, at a tumultuous time for the company. Skinner acted quickly to turn the company around and in result between 2004 and 2008 McDonalds revenues climbed 41. 1 percent in four years, and net income jumped by 81 . 3 percent (Top Executive, 2009).The top nominees for CEO of the year are judged by such criteria as leadership, integrity, ability to outperform and for their commitment to employees. It was no rage to those who knew and worked with Jim Skinner that he had excelled in every category. After receiving the award, Skinner hold the support his leadership team, along with the entire McDonalds system, stating Together, our franchisees, employees and suppliers make up what we call our three-legged stool, we succeed only when all three legs of that stool are strong, aligned and performing at the highest levels (Top executive, 2009).In closing, Skinner noted that while the challenges of leadership have grown more complex in the multifarious business climate, holding fast to fundamental principals will serve todays global business leader well (Top Executive, 2009). The character based leader of todays successful global firm provides effective leadership in turbulent times, Sun Tzu refers to this as clean-living influence stating in The Art of War, as cited within McNeilly (1996), By moral influence I mean that which causes people to be in harmony with their leaders, so that they will come them in life and unto death without fear of mortal peril. Skinner possesses moral influence among his employees, an significant principle that will undoubtedly advance McDonalds in global markets around the world. Christian Values At the minimum, companies poised for global success, will adopt a mission statement. Ideally, these companies will have a statement of values. One orga nization that is not only global, but multinational World Vision International has a statement of values that serves as moral compass in decision making and strategic planning.It states that WVIs values are to Bring a Christian, community-based, child-focused HIV and AIDS response, reflecting Gods unconditional love for all people and the affirmation of each individuals dignity and worthy (World Vision International, 2009, p. 2). It is these types of clear statements of muckle that removes the guess work from the Christian Business Praxis model. Additionally, companies need to research at the characteristics of their organization and the values their leadership possesses to determine whether or not the decision to global is in the best interest of the organization.Some examples are Benevolence- For many organizations benevolence is the primary reason for going global. This was certainly the case of bicycle manufactures and APU alumni ACIRFA, who after going on mission to Africa saw a need for transportation and found a way to meet that need. Stewardship- Stakeholder theory, which seems to drop most modern business decision making, indicates that it is unethical to go global without first considering the impact on all of your stakeholders.Clearly, ones shareholders are his or her primary stakeholders. However, one must be mindful of the fact the fact that the organization is also the steward of its employees. And, to that end the organization has a duty to plan responsibly and minimize risk to those employees. As such, it is important for organizations to ensure that they are balancing potential profitability with the potential of not serving some of those under their care. Collaboration- This is a particularly useful skill if an organization is considering joint ventures.If, however, the organization has found that that the leadership of the organization or the organization as a wholly is particularly weak in this area this is an indicator that a joint venture is not ideal. Integrity- The challenge associated with integrity (assuming that your organization possesses a great deal of integrity) is that one doesnt know the off-shore partners and vendors ones organization will be dealings with. unexampled relationships will need to be established, and with that trust will need to be cultivated.Management skill- For every ounce of management skill it takes to manage domestically it takes a pound to manage off-shore. This is because there is an entirely new set of challenges and risks. on that point are language barriers in many cases. There are currency fluctuations, political risks, supply chain issues, and a whole host of challenges that one may not have realized existed even with extensive due intentness. Passion- The type of passion we are addressing here is the type associated with buy-in.If all members of the executive management team have not bought-in to the idea of going global it is going to be very difficult to have a gr eat deal of success. Leadership must be fanatic about going global. They must be excited, and they must be convince that this is the future of the organization for global efforts to be successful. Preparation- Preparation is the key to success in going global. It may be fine to start out by simply exporting a few items. However, as demand increases, organizations will find that the need for strategic planning and preparation will also increase.Should a company wish to enter into either a joint venture, licensing agreement or build facilities off-shore, extensive due diligence involving outside consultants will be necessary. Zest- As we have suggested, going global is not for the faint-at-heart. Leaders have to be willing to take risks, and only leadership should invigorate others. Going global is not an easy task, great planning and preparation are integral. There will be many challenges and many hurdles and in many cases there will be more reasons to quit than stay the course.Th erefore, relish is a prerequisite for going global. Recommendations Before making the decision to go global, heed Alexander and Korines advice, and ask three questions of your organization 1. Are there potential benefits for our company? 2. Do we have the necessary management skills? and 3. Will the costs outweigh the benefits? The answers to those three questions will give the organization a starting point from which to determine if going global is in the best interest of the organization as a whole.Next, ask the operational questions- Is going global necessary for the growth and/or survival of our organization? Is globalization worth the various risks involved? Can effectively and protect our intellectual property in a cost efficient manner? Will the complications surrounding operations be overwhelming? What do we stand to lose if we dont go global and if we dont who within our competition will? What possible ramifications exist at the expense of not going global? Are we losing o ut on a learning opportunity by not going global?Is there unsecured talent out there that we may miss out on by not going global? Then ask the company, how much the above is worth in terms of opportunity cost? If we dont utilize our time and resources in going global, how then will we allocate said resources to growth? Then ask your company the values questions- Is going global a responsible and ethical management decision? Can we trust that we will find people of integrity in the global rescue to do business with and if so, do we possess the necessary passion and zest to be successful at such as risky cross-border venture?In addition, have we well prepared, and will we continue to be, throughout every step of the process? After asking the above questions we recommend conducting a detailed SWAT analysis where all possible risks and rewards involved with going global are fully vetted, then establish that all Christian perspectives are clear and present and finally, if the decision t o go global is made, go forward while applying Sun Tzus Art of Business principles.In conclusion, Alexander and Korine (2008), suggest that we should not expect the influx of globalization failures to stop or improve any time soon. Making the valid point that, companies in a variety of industries will continue on in their reckless pursuit of global strategies, activists will continue to cause change and disruption and less than character based leaders will stand behind flawed globalization strategies, all the while, customers will always be demanding select attention.While it is undeniable that globalization is a seductively intimidate opportunity with promises of increased power and unlimited benefits looming about the mere cerebration and that while even the best and brightest leaders, heading up the most well prepared companies may eventually succumb to its pressures, make the cross-border transition and mayhap fail at it, keep in mind- sometimes to fail is necessary to succeed . References Alexander, M Korine, H. (2008). When You Shouldnt Go Global. In Bartlett, C. A. Beamish, P. W. 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