Factors To Consider When Going Global

As globalization increases, a global strategic perspective will be as important for big companies as for those of medium size. The fast flow of information around the world has caused people to be more conscious of the tastes, preferences, and life styles of the citizens in other countries. By means of this flow of information, we are all getting to be - at different speeds and speaking from an economic perspective - global citizens. Nowadays more and more economies have opened their borders to deal and to invest abroad. Specific elements of a strategy, such as market coverage or production specifications can become global. But strategies that are global in all of its aspects are few. To successfully turn a global vision into reality, a company must carefully outline what means for its particular business to go global. This depends on the industry, product, or service, and the extension at which total success requires an internal condition in different parts of the world. So, it is important to recognize that globalization is different for every company or industry. Globalization forces a company to rethink its strategic attempt, global architecture, central competitions, and their complete common product and service mixture. The results can cause dramatic changes in the way the company does business, with who, why and how. So there are five factors that every company needs to be aware of when going global, these are dimensions with the goal of developing and to maintaining a global competitive advantage. In essence, these decisions determine a focus on continuous strategy. These factors are market participation, product/services, intensity and focus of the company's activities, government's role in the country to export, and coordination in the decision making of the market.

When talking about market participation, a key interrogative for many companies is "In how many and what countries or regions we would have to compete?" Few companies can afford to enter all the markets available for them. Even the big companies, such as General Electric, have to execute strategic discipline when choosing the markets that measure the relative advantages of a direct or indirect presence in a particular country. For middle size industries, the choices are smaller. The key to have global competitive advantages lies on creating a global resource network through alliances with suppliers, clients, and even competitors. Going global takes a lot of time and money. According to the economist George Yip, experience suggests that the path to overseas expansion is determined by demand. It could mean though having to expand over a direct opportunity to assure a long-term competitive advantage. This could make difficult the return on investments made. That is why most companies, especially small and medium size, favor strategies that minimize direct investment (Gestiopolis, 4). Strategic alliances turned vertical and horizontal integration less important for the utilization and value of stocks and bonds in many industries. Alliances foment contribution to fixed cost while expanding the global reach of a company. At the same time, they can be very powerful windows of opportunities for technological expansion to create the central competitions necessary to compete world-wide effectively.

Ideally, products and services are adapted to local demand. As tastes, preferences, and norms for a product become more homogeneous, however, many companies look for opportunities to standardize their central products and services. To reduce costs is the main motivation for standardization. A second benefit is a bigger potential for quality improvement. But as we all know, the complete standardization of a product is impossible. Some companies standardize substantial proportions of their products and then adjust the rest according to the norms and regulations of the country to export.

In order to increase the competitiveness, many companies are reevaluating the extension of their participation in the varied passages of a chain of values and looking to reduce costs through initiatives, such as eliminating double operations in different parts of the world and changing the original product in some components while reducing the number of manufacturing sites in others. There are many factors to consider when selecting the correct location for the key activities that add value to the firm. The presence of industrial activity of support, the nature and location of the demand for the product, and the competitors, would have to be all considered. In addition, such problems as different tax regulations, the ability to repatriate the utilities, current currency risk and political risks particular of that country, the ability to administrate and to coordinate different locations, and synergies with other elements of the company's total strategy would have to be factorized. All these are really hard to accomplish and can cause troubles with the company's organizational map, creating personnel problems and increasing development risks.

The other factor to consider is the government's role in the country the company is going to export to. The presence (or the absence) of favorable policies for commerce, technical norms, politics and regulations, and competitors or clients handled or subsidized by the government, affect all the other elements of a global strategy and therefore are important in sketching the global competitive atmosphere of an industry The regulations of the host countries can prevent the globalization in several ways. A country can impose tariffs, put quotas for imports and exports, require foreign companies to enter as joint ventures with local companies, specify a minimum content of local production, prohibit the foreign investment, or suspend the legal infrastructure investment. In fact, the regulatory factors- particularly the efforts of countries to restrict the imports of