Name:- Mrunal Sunil Kolte.
Subject:- Global Strategic Management, 405.
Roll No.:- 88.
Specialization:- ‘HR’.
[Assignment]
Home Written Assignment
Q1) What do you understand by Glocalization .Explain the Global Integration/Local
Responsiveness Grid.
Ans:- Globalization
Glocalization is a combination of the words "globalization" and "localization." The term is
used to describe a product or service that is developed and distributed globally but is also
adjusted to accommodate the user or consumer in a local market.
A common example would be cars that are sold worldwide but adjusted to meet local
criteria such as emissions standards or what side the steering wheel is located. It could also
focus on more cultural aspects, such as a global fast-food chain offering geographically-
specific menu items that cater to local tastes.
Global integration pressures are the forces that make MNCs exploit worldwide resources
and integrate their activities on a global basis to realize economies of scale and achieve cost
reduction. Bartlett and Ghoshal (1998) summarize that the motivation of Global Integration
is the need of efficiency. More specifically, the developments of advanced technologies
allow companies to expand manufacture globally and achieve economies of scale, resulting
in the more standardized products. Moreover, the tastes of consumers have become
homogeneous worldwide. Besides, MNCs tend to have “global chess” strategy, using the
profit generated in one market to fund operations in another.
Glocalization is a term used in business and economics to describe the process of tailoring
an international product or service to better fit the wants or needs of a local community.
The concept merges two different terms, as in “globalization” and “localization,”
representing the amalgamation of something local and global.
the Global Integration/Local Responsiveness Grid.
Glocalization can allow businesses to connect with people from around the world in a way
that wasn’t achievable before. Glocalization involves incorporating the foreign concept into
the local custom and traditions so that the people can identify and relate with it. Therefore,
Glocalization always comes with efforts to win the approval of local culture.
Local Responsiveness
In contrast, local responsiveness requires MNCs to make strategic decisions based on local
context (Roth and Morrison, 1990). According to Bartlett and Ghoshal (1998) the drivers for
local responsiveness are (i) the differences in consumer tastes in different countries; (ii) the
typical characteristics of the product system in host countries; (iii) the administrative costs
of coordinating manufacture on a global basis; (iv) the improvements in technologies enable
companies to disperse manufacture to smaller local plants with low cost; (v) the trade and
legislative barriers set by local Governments. Similarly, Hill (2001) discusses that the main
pressures for local responsiveness are the differences in consumer tastes and preferences;
differences in infrastructure and traditional practices; in distribution channels; and host
government demands. Such pressures for local responsiveness urge multinational firms to
adjust their products and services to better meet the demand of indigenous people.
The Integration – Responsiveness Framework
The I-R framework, which is initially rationalized by Lawrence and Lorsch (1967) and later
developed by Doz (1980), provides an insight into how MNCs compete internationally
(Johnson and Julius, 1995). Bartlett and Ghoshal (1998), Spender and Grevesen (1999)
mention the I-R framework to explain different ways MNCs respond to global integration
and local responsiveness based on their strategy. As in Figure 1 below, MNCs pursuing a
global strategy often emphasize on global integration and coordination. In contrast,
multidomestic companies (called as multinational companies in Bartlett and Ghoshal
model), with most pressures coming from customizing operation towards local context,
focus on local responsiveness. International companies have an emphasis in knowledge
transfer, because most of value they create is from transferring valuable resources to
foreign markets. For transnational companies, facing equal pressures from both integration
and responsiveness, they adopt a multifocal strategy aiming to achieve both cost efficiency
and responsiveness. However the study of Bartlett and Ghoshal (1998) was restrained at
internal organizational issues.
Q 2) Explain Marketing Intelligence .Explain how to design the global strategy.
Ans:- Marketing Intelligence
Definition: Marketing intelligence is the external data collected by a company about a
specific market which it wishes to enter, to make decisions. It is the first set of data which
the company analyses before making any investment decision.
Description: Marketing intelligence is usually the first data set analysed by a company about
a specific market. It could be related to population age in that area, infrastructure facilities,
spending habits of consumers, state or government regulations etc. Marketing intelligence
is all about gathering information on various data sets, analysing the information, breaking
down the data into small subsets and the distribution of information to the relevant
department of the company.
A purchase department in a company would need a different data set under marketing
intelligence, while a sales department would need something different. There are four main
corner stones of marketing intelligence. The first one is competitor intelligence, the others
are product intelligence, market understanding and customer understanding. Let’s
understand each one of them in detail. Competitor intelligence is a legal method of
obtaining information about products in a competitor’s portfolio. It is about analyzing
strengths and weaknesses of the competitor.
The basic goal of competitive intelligence is to make better business decisions. Product
Intelligence is related to gathering information about your own product. The focus around
product intelligence is on gathering information about the quality and performance of the
product. This is usually an automated process. With the help of this knowledge, the
company tries and makes the user experience better or makes changes in the product itself
to make it safer or add new features. Market Understanding is a concept wherein the
company tries to understand the performance of the product in which it is already operating
as well as looks at other markets where it wants to launch its product thoroughly.
Finally, understanding the customer is the utmost important aspect in the life of any
product. It is key to the success of the product pre- and post-sales.
how to design the global strategy
To develop international, multinational and global business strategies, we’re going to use
the model below which identifies the main issues. We examine each part in more depth.
Essentially, the model begins by analysing the markets in which the company is already
engaged – perhaps only in one country, perhaps in several but without a fully-developed
international strategy. In addition, the company should also begin looking at the prospects
around the world for its products or services – not in detail by individual country, but in
general terms.
As a starting point, it’s worth using some basic international data to analyse different
countries. The type of data is shown in the two graphs – economic data that explores the
total wealth of some selected countries and the wealth per person for the same countries.
There’s not much doubt that the USA is the world’s wealthiest country. However, the
countries of the European Union – for example Germany, the UK and France – are not far
behind individually. Importantly from an international trade perspective, the EU countries
can be grouped together. This means that the European Union as a combined market would
come much closer to the USA in terms of total wealth.
Although China has been catching up over the last few years in terms of total wealth, there
are many more people in China than the USA – hence the wealth per head in China is below
that of that of the USA.
These basic types of comparison are explored in more depth in the country selection film:
The next step is then to identify the company’s resources for international expansion,
especially those that have competitive advantage. For example, the company may have
special patents or brands that can be used in international expansion. Again, we’ll explore
this in a more structured way shortly.
It’s only after this that a company should set its international and global objectives. Some
companies may find this surprising – why shouldn’t a company begin by setting out what it
wants to achieve internationally?
The reason for leaving objective-setting until now is that objectives need to be set in the
realistic context of what opportunities exist in the marketplace and what resources the
company possesses for its international expansion. To take a simple example, there would
be little point in a car company setting a target for major expansion in the US car market in
2009 when that market is under such pressure. Equally, small computer services company
may simply not have the resources for a global product launch, however attractive its
service. It would be better to define its objectives more realistically.
Having defined its objectives, a company can then begin to explore which markets around
the world represent the best opportunities: usually called market entry and mode. At the
same time, it will want to think about how it enters such markets – perhaps a product
launch, perhaps a joint venture and so on. These two aspects are represented by the two
circular arrows in the model above. We’ll look in more depth at these issues later.
Finally, whatever choice is made about market entry and mode, the company will wish to
think about pricing, products, distribution and a whole range of other factors related to its
international objectives. This is called developing the product or service offering and forms
the last part of the model.
Importantly, there is an important aspect missing from the model – innovation and learning.
The reason for leaving this out is to avoid over-complicating the basic international
development process.
Q.3) What do you mean by strategic alliance .How to implement successful alliance.
Ans:- Strategic Alliance
A strategic alliance is an arrangement between two companies to undertake a mutually
beneficial project while each retains its independence. The agreement is less complex and
less binding than a joint venture, in which two businesses pool resources to create a
separate business entity.
A company may enter into a strategic alliance to expand into a new market, improve its
product line, or develop an edge over a competitor. The arrangement allows two businesses
to work toward a common goal that will benefit both.
The relationship may be short- or long-term and the agreement may be formal or informal.
How to implement successful alliance
1) Identify the Need: "First, determine why you would work together," Kaufman points out.
Do your companies have complementary skills or are you adding extra capacity to each
other? Understand the strengths and weaknesses of each firm. Determine how the alliance
fits into your business plan. Be clear with yourself about why you're entering into the
partnership and what you expect to gain.
2) Evaluate Partners: Even when you know someone or get a referral from a trusted
advisor, researching a prospective partner is crucial. It's not just the capabilities the other
company brings to the table. You must feel comfortable with the work style of the potential
alliance. Once you've determined the other firm has complementary skills, it's critical that
you look objectively at management styles, work ethics and values, and identify where
potential clashes could occur.
3) Establish Joint Objectives and Goals: Developing key objectives and goals that reflect
what both parties expect to gain is critical. Be sure that expectations are realistic in light of
the resources both parties are willing to put forth, and make adjustments as needed.
Nothing sours an alliance faster than the notion that one party is giving everything while the
other is getting a free ride. Strategic partnerships have to foster an environment in which
both parties gain something; otherwise, they're not partnerships.
4) Define Roles and Responsibilities: "Many problems can be avoided by setting
expectations upfront," Kaufman advises. Assess each company's strengths, and define
responsibilities accordingly – especially in the area of management. Many alliances fail
because of poor management relationships, so document clearly what's expected. Be
specific: Decide how many people from each company will be involved in the alliance and
what their particular roles will be. Each party has to dedicate resources to the relationship,
and both parties need someone within their organization who will champion the cause.
5) Develop a Good Communications Process: Clear communication is key to creating an
enduring partnership. "This is one of the key pieces that often gets overlooked," said
Kauffman. Disappointments and misunderstandings can be avoided by establishing an
effective process for working with your partner. The relationship must be developed to the
point where both parties can be honest when evaluating progress and offering
recommendations for improvement — both of which should be done on a regular basis. For
example, you might want to exchange weekly sales reports.
6) Develop Conflict-Resolution Systems: An alliance is rarely a match made in heaven.
Misunderstandings, compromises, and disagreements are natural. "Determine how you will
voice them when you feel your partner isn't responsive," said Kaufman. When
misalignments arise, resolve them as quickly as possible. It's best to meet in neutral territory
where both parties can speak openly and honestly. Then, focus on creating solutions rather
than placing blame. Be prepared for the possible break-up of the relationship. "Have an exit
process worked out in advance."
7) Build on Trust: Strategic alliances are built on trust, dedication, and mutual interests.
They require the respect and interaction of people in each organization. And, like good
personal relationships, they require effort to build. Once they're in place, however, you can
count on them.
Each party has to feel that he or she is giving something and getting something in return. If
you haven't taken the time to think through how both sides will benefit, don't pursue an
alliance at this time.
8) Demonstrate Commitment: The alliance needs to assume a position of status and
importance. Both partners must be willing to nurture and care for it. This means that the
top people in both organizations must be supportive. The point of any strategic alliance
should be to make an impact, and you can't do that without active engagement at the top. It
also means giving extra effort to making the venture work, even if that means a willingness
to go beyond contractual obligations. Committed partners dedicate resources and energy,
and face risks to make the venture work.
9) Be Patient: Strategic alliances take time to develop and maintain. When you're starting,
don't make judgments about potential partners if they seem reluctant. Figure out how to
stand out from the crowd.
10) Formalize with an Agreement: A written document formalizes what you have agreed to.
It is an outline of expectations and protects you and your alliance if those expectations
aren't met. If a disagreement arises, there is a document you can refer back to in order to
get the relationship back on track.
Q.4)Explain how to design the global strategic organization
Ans:- Business strategy is the domain of business owners and top-level managers, and
serves as a guideline for all managerial decisions. An effective strategy can help an
entrepreneur to realize short- and long-term business goals, keeping the company at the
top of its industry by continually offering the most valuable customer experience in the
marketplace, or by moving into new markets when the time is right. Knowing how to design
a strategy for an organization is essential to taking the helm of a small business.
1.Determine what industry your company will be in, which markets it will serve, how it will
serve them and what business models it will employ. Determine what kind of player your
company will be in its market—a niche product provider, a market mover, a dominant
market presence or a trend follower.
2.Describe your target customers in detail, taking into consideration their demographic,
psychographic, behavioristic and geographic uniqueness, and determine how your specific
business model will serve them better than your competitors.
3.Craft a strategic vision or mission statement to guide all other strategic decisions. Write
your corporate mission statement in concrete terms, and state where you would like your
company to be in the future.
As an example, a mission statement, such as “We will be Ohio's top ranked provider of
third-party tech support solutions,” clearly states the company's industry, target customers,
business model and goal for market leadership.
4.Perform a strategic analysis of your company and its external environment. Use a SWOT
analysis to uncover your company's weaknesses and strengths while identifying
opportunities and threats in the marketplace. Create plans to reinforce your strengths,
eliminate your weaknesses, take advantage of opportunities and protect your company
against outside threats.
5.Perform a financial analysis of your operations and financial statements. Analyze your
operations in terms of cost efficiency, process redundancy and overall productivity. Use
financial ratios to analyze your financial statements, and compare the results against
competitors and industry averages. Use the results of your ratio analysis to identify areas of
strength and weakness, and to craft strategic initiatives aimed at reducing costs while
maximizing profit margins.
6.Use the information gathered to guide your research and product development initiatives,
making sure that new products and services are in line with your strategic vision. Consider
the value proposition you offer your customers—the sum of all experiences related to your
company, products and services from the customers' point of view—and ensure that it is
also in line with the corporate vision. Design your operational processes, policies and
organizational structure to be in line with your mission as well.
Q.5)What are the challenges to the staregic management.
Ans:- The five most common challenges in executing a strategic plan are:
1. Poor goal setting.
Strategic goals are often large and complex objectives that almost always require many
resources scattered across many departments and locations to accomplish them.
Establishing clear goals across teams will result in more clarity on priorities and
responsibilities.
Recommendation: Ensure that your entire organization has adopted a goal-setting
methodology. The objectives and key results (aka “OKRs") method is emerging as the new
standard, but using SMART (goals— specific, measurable, attainable, relevant and timely) is
better than nothing. Ensure that there are established best practices for writing goals. Each
manager should be responsible for his or her team’s goals. If no best practices are being
followed, use OKRs.
2. Lack of alignment.
Even with proper goal-setting, teams and people can be challenged with a lack of alignment
that typically causes prioritization issues and collaboration conflict that can derail the day-
to-day work to achieve the strategic goal. The biggest cause of strategic misalignment is the
nonstrategic work that people are so used to doing. Often nonstrategic objectives become
the priority, as they are routine and often the most easily attained.
Recommendation: By establishing clear alignment on who is working on which strategic
objective, as well as what each of those objectives are will empower those people to drive
the priority over nonstrategic objectives. This is especially true if you can see the alignment
straight through the hierarchical structure.
3. Inability to track progress.
Many organizations are still using spreadsheets to track objectives. This can work between a
manager and employee, however, these systems do not make it easy to aggregate results or
create transparency. Worse, their use limits the ability to real-time manage the attainment
of strategic goals.
Recommendation: Consider using strategy execution platforms such as Tanics, AchieveIt or
Rhythm Systems to change the way this game is played. Managers and employees,
especially millennials, expect clear direction in real time on why and what is important. By
improving alignment, transparency, collaboration and manageability an organization can
immediately realize higher efficiency as well as more results. Knowing the score lets an
organization and every person connected with that strategic goal adjust their game to
maximize the outcome.
4. People not connected to the strategy.
People in general like order and routine, so we are more likely to fall into an operational
tactical focus where our efforts can result in immediate results. Unfortunately, strategic
goals are rarely this easy and small in scope, so how do we get people working differently?
The best way is to connect people more closely to strategy by aligning professional goals
with personal interests. For example, learning new skills, having more responsibility,
working with different people and teams, working outside their department on what we
refer to as “strategy teams.”
Recommendation: Let people create their own strategic goals initially to capture their
ambition and preference. Managers then work at trying to align that employees’ goal with
the larger strategic plan. Shift the focus from “an employee working inside a department” to
“an employee working towards a company’s strategic goal as part of a strategic team.”
5. No measurements or leading indicators.
The old proverb, “You manage what you measure,” is paramount to strategy execution.
Without measurement, how do you manage the people and issues that can derail a strategic
goal? You must set measurable goals, track them and manage them Having leading
indicators like predictive analytics stimulates the management discussions at all levels.
Recommendation: Start with only the most critical strategic goals, as this will reinforce the
notion that strategy execution is the most critical focus. It will also make it easier to adopt
the goals as it focuses on depth, not breadth. “Focus on less to accomplish more” is the right
motto.
