Beginning Development of Global Strategies MGMT690 IP1
“Why should resources be a concern in a global strategy?”
Resources are the primary concern in the development of any global strategy. For instance, when a firm goes global, it begins to manufacture its products abroad. The need to evaluate the availability of resources in foreign markets becomes a necessity in this scenario. Resources entail staff, materials, money, and various other assets available to the company. The availability of these resources is essential for the firm to implement a global strategy (Schlegelmilch, 2016). Consider, in this case, a company that is producing fabrics locally. The firm may not find it easy to export its fabrics to other countries due to laws and regulations, barring certain products that do not meet the country’s quality standards or importing products also available locally. In such a case, the company will have to produce fabric in the foreign country of operation using locally available.
“What resources may be a concern in the country you selected?”
The resources of concern in the country selected (China) are labor productivity and cost, technology, and material availability. The development of textile industries is still controlled by labor productivity and costs, alongside technology and availability and quality of materials. The low quality of locally available materials in the foreign market will most likely affect the fabrics’ quality. Likewise, other resources, such as labor and finances, may also affect the fabrics’ quality. For instance, production costs may become high if the local labor’s productivity or competency is low. The cost of making the fabric may increase if the capital needed to set up the plant for local textile production is costly. Other factors such as technology and support resources such as research and development and legal issues are also of concern in global strategy development.
“How will this impact the decision to move to the country that you selected?”
The decision to move the business operations to China will be impacted by factors such as legal issues, bilateral relations between China and my country, the United States, and cost-benefit analysis of the cost of moving and continuing to do business locally. In any case, the managers must understand such factors because they impact the business decision-making directly during the negotiation and secondarily through the foreign country’s trades and policy decisions and other global institutions such as the world trade organization (Lynch, 2014). The impact of government policies such as taxation, trade tariffs, and even the proposed acquisition significantly impact the decision to move business operations to China. Furthermore, fighting between China and the Western world, including the United States, concerning the market interests and quality issues is another factor impacting global strategy, mainly when China is in the picture.
“How will this impact your competitive strategy in your global market?”
A global strategy’s primary goals are to group various advantages emanating out of range, including global-economies of scales, brand building to scat a global vicinity, enhancing product quality, and overcoming country-by-country break (Ghemawat, 2007). China’s textile industry displays cost effects and scale economy in the product quality, labor costs, material supply, and compatibility between up and down streams, hence contributing to a significant competitive advantage in the global market strategy. Moving production to China will help the company address the resource constraints such as labor, material, and production cost provided that the management can effectively maneuver through the policy dynamics. China is considered the world’s fastest-growing and most comprehensive source of business startups. The country is also a host of large companies, local and foreign (Peng, Zhang, Wang, Zeng, Peng, & Yu, 2015). Many foreign investment companies have been established in China, and several firms are still making efforts to tap into the nation’s manufacturing-base and reach their markets.
References
Ghemawat, P. (2007). Redefining global strategy: Crossing borders in a world where differences still matter. Harvard Business Press.
Lynch, R. (2014). Global Strategy. https://www.global-strategy.net/what-is-global-management/
Peng, L., Zhang, Y., Wang, Y., Zeng, X., Peng, N., & Yu, A. (2015). Energy efficiency and influencing factor analysis in the overall Chinese textile industry. Energy, 93, 1222-1229.
Schlegelmilch, B. B. (2016). Global marketing strategy. Cham: Springer Nature.