The Importance Of Regional And Global Strategy

It is true that some companies are registered and operating in more than one country at a time—this is, generally, that the company has its headquarters in one country and operates wholly or partially owned subsidiaries in others. In economic terms, establishing a multinational company includes both vertical and horizontal economies of scale and an increased market share. The purpose of this essay is to analyze if multinational companies apply a regional or global strategy on their way of working. For carrying they were taken some relevant cases of two authors. According to Alan Rugman, the world’s largest 500 companies are often called multinational enterprises, producing and/or distributing products and services across national borders. On

A company is “global” when there is a connection between countries, and a strategy is “global” when it is integrated among different countries. It’s important to note that a global strategy should not be standardized products or a global manufacturing, but a flexible combination of many elements. In a global market strategy, a company treats the world as one singular market and one source of supply with barely any local variation.

Recent changes to the way countries handle business open way to more efficient global strategies, and it is expected that more of these changes take place in future years. For example, a growing change has been the way consumers shop—more and more customers among countries demand similar products. Another important change is the country’s willingness to be more open to business—many trade barriers are coming down or being reduces, and many agreements between countries for free trade are being established (Yip, 1995). Thus, a nation must provide favorable conditions for companies to compete internationally (Porter,

Growing integration of international markets leads to growth of competition on a worldwide scale, which implies the adoption of a global perspective in business strategies. Due to this, companies seek a global strategy due to the benefits it provides. The four main benefits Yip mentions in his book are: cost reduction, more quality, more client preference, more competitive effectiveness.

From the information collected about both types of strategies, we can conclude that both strategies are good for a company, and both are used widely. Regional strategies depend much on cultural and contextual factors within a country, while a global strategy does not face such problems since it is especially designed to not face them. A regional strategy may be best when a company works in certain areas, manufactures certain products and operates in a certain way, while global strategies is more homogenized.

The international dimension of business networks has remained relative unexplored, mainly because international business writers focus on multinational enterprises and network writers ignore international issues. it is widely accepted that multinationals drive globalization. Business activity by most large multinationals takes place within any one of the world’s three regional blocks (North America, Europe and