International Business: Global Standards Strategy

International Business Name Institution International Business Question 2: In this age of globalization, some gurus argue that all industries are becoming global and that all firms need to adopt a global standards strategy. Do you agree? Why or why not? Illustrate your points with relevant examples. In the current world of business, globalization has become a common trend. Industries are increasingly going global with the main aim of benefitting from the many advantages associated with globalization. These include enjoying free trade, availability of labor among many others. The prevalence of this trend has led to a growing debate on whether or not business firms need to adopt a global standards strategy. Generally, all factors are in support of the idea that the firms should adopt global standards strategy. This view is because of the efficiency to the industry when carrying out its operations. In addition, the product life span will be prolonged with the adoption of the global strategy, which will give the firm a competitive advantage over others. Furthermore, this will lead to heightened customer awareness and satisfaction, improved effectiveness of the products and services provide access to new markets as well as ensure cost reduction and savings. For all these reasons, there is indeed a growing need for the global standard strategy to be adopted by all firms in this age of globalization. Concerning efficiency, the economies of scale of a company are leveraged through the global strategy. O’Farrell (2018) notes that: with an access to a wider market, a company’s product can be sold all over the world. In the same way, obtaining raw materials for such a company becomes easier since they can be bought in bulk and due to this, a company may save a lot. The costs in other areas can be reduced too such as in labor, packaging, and even the cost of marketing material. A firm can have access to new markets through the adoption of the global standard strategy. With this access, much can be enjoyed in terms of reduced costs due to the standardization in some of the markets. A company like Coca-Cola is one that has previously enjoyed the benefits associated with cross-border sales at a time when the US market was becoming saturated with its products. As a result of taking its products to outside markets, the company was still able to record a sizeable profit from the same. It is for this reason that firms need to adopt a global standards strategy. All firms need to adopt a global standards strategy because it increases the life span of a product. Concerning this, some company products may become obsolete in one market but they can still be successfully marketed in other markets (Lorette 2018). This ensures continuity of the life cycle of a product in a way that enables the company to produce even more newer and latest versions of a product because of a ready market. Examples of companies that could benefit from this are the Coca-Cola Company and Apple Company given that their products are the same all over the world. In this case, when Apple wishes to launch a new model of one of its products, it can take care of the old unsold stock by selling the same to those markets that are less developed. In doing this, it has to be ensured that the competition in the less-developed market can allow for that older model that is being gotten rid by the developed market. In the end, adopting the global strategy will be beneficial to the firm since it ensures that there is always a market for products and this makes it easier for a company to continue its production process throughout all season. Adopting a global standards strategy gives a firm stronger competitive advantage over other firms that may have not embraced the same. As Delaney (2018) points out, the ability to compete globally, usually places a company at an advantage compared to others that do not. It is a known fact that a good number of companies have no problem with maintaining competition that is done on a local basis. However, adopting strategies that can enable a company compete well on a global basis makes it easy to outshine the local businesses. Furthermore, in case of changes in the demands of the customers or in situations where the global market experiences changes in their trends, it becomes easier for companies to adapt to these changes. With reduced costs through the economies of scale, a company using the global standards strategy will also enjoy making savings. In this case, savings are in form of the global use of the internet in a way that could be advantageous to the company. For instance, a company may establish one point of contact on the internet like a company website, Facebook or Instagram page. By doing this, it becomes easier and convenient for the company to be known and easily found by potential customers from any part of the world (Collins 2015). This ease of access to the company and customer places the former at an advantage because the extra money that could otherwise be used in advertising and marketing will instead be used to offer better services to customers all over the world. In addition, the internet makes conversations easy and this can work positively for a company especially in ensuring collective commitment on the side of the employees. With collective commitment, a company may survive longer in the global market. Access to greater talent is another advantage of adopting the mentioned strategy. Since the business will be operating on a wider scale and people all over the world know about it, it becomes much easier to attract and access uniquely skilled people (Dynamic Language 2014). The home country can be lacking these kind of skills and due to this, such a firm may have a greater advantage over it competitors. This is especially the case when the other firms have not yet adopted the strategy. Still on labor, a country using the above strategy can also be in a better position to access cheap labor from different countries. This will cut down on labor costs particularly in those places where the costs are normally high. A company that has adopted the global standards strategy can have access to many foreign investment opportunities. It is an accepted fact that businesses benefit a lot from foreign investments with all the benefits that come with it (Bah, Kefan and Izuchukwu 2015). A company can only gain exposure to such opportunities and enjoy the benefits when it takes its operations on a global level. Examples of these benefits include the ability to get resources at a cheaper price, easy access to other markets, and in some cases, minimal government regulation. All these are meant to ensure profitability while only spending less. In the case of insurance companies for instance, they could benefit more from investing with Germany or Japan where they are assured that their financial risks will be greatly reduced. It cannot be ignored that businesses...