Global strategies improve a company’s efficiency, learning, and flexibility capabilities, but must consider national differences. Micro and macro factors influence resource allocation and trading decisions, and a global strategy is essential for effective responses to global competitors.
Companies create and develop strategies so that operational efficiency can be acquired and maintained. For companies that operate or wish to operate internationally, a global strategy is usually developed and implemented. This type of strategy often includes ways to address a company’s learning processes, its efficiency tactics, and its ability to be flexible. There are several factors that affect the creation and implementation of an overall strategy, which is used at the micro and macro levels.
The aim of a global strategy is to improve a business’s efficiency, learning and flexibility capabilities, enabling it to operate effectively on an international level. Many companies find it difficult to deal with all three areas at the same time, making it very important that this type of strategy is as detailed as possible. When a company cannot address these areas effectively, it will often find that it can only survive domestically. When it comes to addressing learning processes, companies find it imperative to create a global strategy that takes national differences into account.
Laws and customs, morals, values and ethics differ from country to country, which means that these factors always influence the global strategy of a company. Employees’ preferred benefits also affect how this type of strategy is developed. Employees in one geographic location often prefer different benefits than employees in another location. With so many factors affecting an overall strategy, it’s easy to understand that developing one often takes a significant amount of time and close attention to detail.
There are two basic levels of economics: micro and macro. An overall strategy is implemented at both levels. When a company develops a global strategy, it doesn’t have to create one for the micro and macro levels. The strategy you develop is simply influenced by factors and elements at both levels.
When strategy is implemented, micro-level factors influence where a company allocates its resources so profit opportunities can be seized outside its home locations. Often, the decision whether or not to trade with certain foreign countries is decided in a company’s global strategy, and this decision is also influenced by micro-level factors. A global strategy is influenced by macro-level factors such as taxes and tariffs imposed on a company by foreign countries.
There are many pressures placed on companies in the 21st century to develop a strategy that can be implemented globally. Companies are able to provide better customer service when they use a strategy that allows them to centralize the development and distribution of their products and/or services, operating globally. Regardless of the type of business that operates internationally, a global strategy is essential so that effective responses to global competitors and their operational tactics can be given.
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