- Published: October 31, 2021
- Updated: October 31, 2021
- University / College: New York University (NYU)
- Level: Doctoral Studies
- Language: English
- Downloads: 18
Of Assignment This article depicts the challenges that local companies in emerging markets face as a result of entrance of competing multinational rivals in the market. This form of competition is healthy because it gives customers more option to choose from.
Multinational rivals are superior to local producers because of the following:
Substantial financial resources.
Powerful and well-known brand name
Seasoned management and marketing skills
Managers in these markets act in three ways to protect their market position. These responses include:
Asking the government to setup trade barriers.
Becoming a subordinate parent to the foreign company
Expanding production, selling in other industries, countries, or even market.
Companies in Russia and China are successfully defending their existence in such battle. Others may choose to go international. For example Jollibee Foods in Philippines and Cemex in Mexico have started operating globally.
The article highlight following steps in order to attain success;
Assessment of industry characteristics and becoming familiar with customer needs and wants. These are significant elements for a business to gain success.
Multinational corporations belong to various parts of the world and people in these sections of the world have differing cultural values, lifestyle, interest, income level and education. For example, Honda had to spend aggressively in order to identify customer needs and wants. While the local manufacturer of scooters, Bajaj had a competitive advantage over Honda as the company was aware that consumers in India wanted a low cost, durable and easily accessible and maintainable machines. Bajaj had been around for so many years that it was able to establish and maintain a good relationship with customers and was well aware about society trends. Another distinguishing factor between Bajaj and Honda was the element of supply chain. Bajaj relied on itself to distributing motor scooters while Honda relied on local producer.
Understanding the corporation’s strengths and weaknesses and comparing them with rivals. Identify opportunities and threats and then make the decision based upon potential opportunities.
Corporations sometimes may be forced to go global to cover the huge burden of fixed operating cost through sales.
1) What is strategic intent?
“ Strategic intent is to provide the company a focus for developing strategic plans that allow the firm to move closer to achieving the strategic intent. Strategic plans focus on means to the end, while strategic intent clearly defines the ends and leaves the means unconstrained. Strategic intent leaves room for improvisation and opens innovation opportunities”. These plans have to be understood by every employee in the company to unite than and follow the company’s commander, in order to attain firm’s goals. It also provides an indication of the firm’s techniques which make the firm unique in managing business or outlines an organization’s priorities.
2) How would you distinguish?
It can be distinguished through experience or by knowing how the firm is tending to handle business in comparison to its competitors. For example, Starbucks has realized the importance of high quality of coffee beans that are imported from Brazil and a lovely atmosphere enables a customer to enjoy their coffee. The organization offers a variety of coffee and has employed highly experienced coffee producers while employing specialized equipment’s in order to meet consumer expectations. It even allows consumers to buy their products from anywhere. These are signs of a firm’s tactics in comparison to McDonald’s.
3) How might a company in the West have difficulty to compete in the East?
In the West organizations pay special emphasis on managing its resources as well as attaining operational efficiency in order to perform better than competitors and the Western organizations tend to develop strategy in response to changes in the environment. In the Eastern regions, organizations tend to take a proactive approach to strategy making and implementation. The difference between the two models is that the Western model strategically applies tactics while the Eastern model focuses on application of a strategy in a tactical manner. In the current competitive environment it has become necessary for the managers to develop, attain and sustain competitive advantage, instead of identifying a strategy that has already been adopted and has become successful.