Table of Contents
Reflection on Two Concepts
Global strategy has been an interesting course comprehensively as well as innovatively covering factors that multinational corporations put into considerations when strategizing around the globe. Corporate diversification and attacks in a global multi-market competition are two concepts that had a great impact on my learning throughout the course.
I learned that multinational companies diversify for two main reasons; to spread risks and increase profitability through newly acquired markets. Diversification can be approached from two dimensions: geographical-wise or product-wise. Geographical diversification entails venturing into new markets away from home countries. In this strategy, non-international companies go global, a process referred to as internationalization. The other dimension is the product diversification, firms here venture into new products that may be away from their original industry of specialization. It is potentially very risky to focus on one line of production and hence the need for diversification. While firms are adopting these diversification strategies, they will have with three factors in mind: industry-based considerations, resource based considerations, and institution-based considerations (Peng, 2014).
The course has been instrumental in ensuring that I understand multi-market competition. In this situations, global firms employ three main attacks in their pursuit to gain market share. The first attack is commonly referred to as the gambit in which a firm “sacrifices” a low-value market with an ulterior motive to capture a higher value market. The second type is the thrust in which a company uses resources to bully away weaker firms from a market. Lastly is the feint attack in which a firm intentionally enters a market that it is of no importance or value to it. The firm does this to confuse and keep the rivals busy investigating why it got into that market while in true sense venturing to other markets of real interest. The feint attack is meant to mislead or distract the rivals.
your paper for you
- Hill, C. (2008). International Business: Competing in the global market place. Strategic Direction, 24(9).
- Peng, M. W. (2014). Global Strategy. Mason. OH: South-Western, Cengage Learning.