Tthe advantages of not being global and having a local approach Essay

Tthe advantages of not being global and having a local approach - Essay Example This paper illustrates that in order to understand the potential disadvantages of global strategy, compared to local strategies, it would be necessary to refer to the characteristics of global strategy, as identified in the key strategic decisions of firms operating in the global market. It seems that global strategy is highly differentiated from local strategies, not only in regard to its role but also in regard to its requirements and effects. In accordance with Tallman the global strategy can be characterized as the strategy, which needs to be established in case that a firm is interested in operating in the global market. It is explained that such strategy helps the organization to align its operational rules and culture with those of the targeted market. Reference is made for example to the case of Haier, a major competitor in the Chinese manufacturing industry. The firm has tried to be established in the USA market using a low-price policy. However, it was soon revealed that th is policy, alone, would not help the organization to develop its presence in the particular market; instead, a brand should be used for attracting the interest of local consumers. In accordance with the above, an effective global strategy offers the basis for the successful development of a firm’s presence in the global market. Thus, a global strategy should be related to specific policies, which are likely to be different compared to those included in local strategies (Lasserre 2007). This fact is made clear if the strategies used by two different firms for entering the global market are reviewed: reference is made in particular to ‘Philips Group of Holland and Japan’s Panasonic’ (Segal-Horn and Faulkner 2010, p.133). Before 1980s, Philips Group tried to develop its presence in the global market by focusing on the needs and the trends of each country; however, up to then, global strategy was characterized by the production of similar products for all coun tries which were promoted in markets globally using similar marketing strategies (Segal-Horn and Faulkner 2010) and only minor changes were made for aligning these strategies with local trends. As a result, Philips Group had to face significant difficulties and delays when trying to expand its operations globally. Panasonic, which aligned its policies with the requirements of