Questions and Answers Global Strategy

Global Strategy

Chapter 1 Question

There are several steps the United States can take to ensure that it remains India’s biggest trading partner even with the rapid rise of China as a global player. The first method is that American firms should embrace discipline in their innovativeness in their operations. American companies are known for spearheading innovations and creating quality products. If they follow the same formula, they shall retain India’s talent, as Indian people benefit from the relations with America.

The second way to stay competitive in the global market is investing in innovation decisions instead of focusing on research and development or pushing people to work longer hours. America is known for innovation and smart approach to working instead of long and unproductive hours. By focusing on smart decisions, America can stay ahead of the competitors, who focus more on the quantity rather than the quality of their products (Inkpen and Ramaswamy 78).

The third method that America can employ to beat China to India’s vast talent in information technology is to stop viewing innovation as an expense. Innovation should be treated as an investment. By investing in innovation in the long term, America will secure its future against China and other companies competing for India’s talent pool. When the perception of innovation changes, America will appreciate innovation and stay ahead of any other country in the world. Lastly, America should focus its innovation on delivering value to the customer instead of creating fancy items. India needs strategies that contribute to the welfare of the large population and train the workforce to focus on solutions to social inequalities (Peng 41). If America’s technologies fall in line with the needs of India and the rest of the world, the US will have a talent pool not only in India but in other developing countries. The focus should be on innovation for the US to stay competitive.

Chapter 2 Question

For the American commercial farmers, the rift between producing food to feed the world and producing crops to make profits is a difficult choice. While the farmers have sufficient resources to feed the world, they find it hard to forget the options to make more money producing biofuel crops on the same scale. However, the farmers should not put profits before food security for the entire planet. At the same time, advising the farmers to leave biofuel crops in totality and produce food crops is not feasible. One way to even the odds would be allocating different portions of farmland to the production of biofuel crops and food crops. Thus, the farmers would have a good return, while also producing food to feed the world. It should be known that the number of people, who require biofuels, is around 800 million in the world (the vehicle owners), while the persons at the risk of starvation account for more than 2 billion. Therefore, the preferable option is to feed the hungry rather than power vehicles, which have other sources of power. The second way the United States farmers can ensure the availability of food while having profited from biofuels would be government legislation that focuses on the allocation of crops for food and biofuels. The government should put a ceiling on the percentage of a farmer’s crops that aim to create biofuels. The government understands the plight of the poor. On the other hand, farmers are capitalistic in nature and will produce their crops with a focus on making the highest profits. Without proper legislation, each farmer will put profits before food security. Therefore, the world’s efforts towards food security will face a major threat.

Chapter 3 Question

Multinational enterprises (MNEs) face challenges and opportunities in the recent trends in the world economy. The rise of a multi-polar world, while presenting the challenges of serving very diverse markets that put a strain on the resources of the firms, offers several opportunities to MNEs. The first opportunity for MNEs presented by the multi-polar world is the size of the market for their products and services. Unlike in the previous economic landscape, where nations and regions were differentiated into distinct demand types, tastes, and presences, the current world has an almost homogenous consumer landscape with very few peculiarities. To make the most of the situation, MNEs should remain flexible in their operations so that they can meet the needs of various stakeholders across the globe.

The other way MNEs can ensure that they thrive in the new type of economic conditions is through investment in research and development. The focused research and development introduce the new methods of production and service delivery that will have a place in the future. Research and development will enable the firms to remain relevant in the market. Together with the experience of having delivered products and services in the past, innovation will enable the firms to be dynamic and competitive. Lastly, the MNEs can survive and thrive in the new world economy by integrating information technology into their activities. IT projects, such as cloud services and other forms of automating industrial procedures save the company resources of money and time. The resources saved would be used for further research and development activities to enable the firms to compete favorably with other companies in the new economy.

Chapter 4 Question

The first problem associated with a significant merger is the bureaucratic red tape that often characterizes large firms. The bureaucracy introduces many types of inefficiencies for the corporation with mostly negative results. First of all, making decisions would take a very long time owing to the bigger management team. The decisions are being made by the top management, but the increased number of levels of the executive teams and the factory will take time to effect. Thus, the company would be inflexible to use the opportunities that arise in its line of business. Besides the hierarchy aspect, the other important problem that may arise from a merger of the large size is that it reduces the level of competition in the market owing to the creation of a monopoly by the two companies. Goodyear and SRI are among the biggest firms in the world. Their merger created a corporation that could easily buy other smaller firms. The reduced competition may increase the prices of the products given that the bigger firm will control the tire market. Moreover, the merger could lead to diseconomies of scale, as the motivation of workers is being taken for granted due to the size of the firm. In some cases, large mergers could lead to the loss of jobs in both companies due to a combination of workers with the same skills. The most notable effect of mergers is that consumers would have less choice after the merger. Before the agreement, customers could choose between Goodyear and SRI tires. After the merger, the two firms would most likely produce a single tire brand.

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Chapter 5 Question

Customer knowledge should be treated with the utmost care. First of all, the authorization of the use of customer knowledge is a delicate matter as it often contains information that is unique to the customer and may be personal to some extent. Authorizing the same information should only be focused on learning the needs of customers to serve the customers better. The customer knowledge should only be distributed within the organization that shall use it to deliver better customer services. Data distribution should also be systematic to ensure that the information specific to a customer is aligned with the needs of the company and the customer. As for the localization process, customer knowledge should only be used by the firm in possession of the information and aligned with the specific needs of the firm. Additionally, customer information should not be shared with third parties unless with the consent of the affected customer, or an official requirement by the law for legal proceedings. To maintain customer information, a file ought to be opened for each customer to collect maximum useful data. With each piece of information, the knowledge about the customer adds up. As a result, the firm can deliver better services as per the customer’s needs. Lastly, the management of customer knowledge is the hardest operation. The control over personal data falls upon the CEO of the MNE to ensure that it does not get into the hands of third parties who may misuse it. Besides, customer knowledge should be used for the right purposes such as the delivery of better products and services.

Chapter 6 Question

In my opinion, the use of Knowledge Teams is the best way to manage offshore relationships and multiple locations in large multinational corporations. First of all, Knowledge Teams increase the efficiency and effectiveness of the company. A firm spends little time on collecting customer-specific information given that each department in a firm plays a role in the process. Without the teams, achieving certain goals such as having information to serve customers in a better way becomes challenging. Secondly, Knowledge Teams are also important in focusing on the firm. Once information on the customers has been made available, all resources will be geared toward the specific customer needs identified (Ghemawat 62). Multinational corporations are at the risk of losing their focus because they serve many different customers. In order for the company to stay focused, Knowledge Teams are the solution as they possess the required customer information.

The main advantage of the use of Knowledge Teams is that it allows employees to tap into the expertise of their coworkers. Thus, each employee is improved not only through their efforts, but by the contribution of other employees. The approach has several advantages. For example, the firm saves the costs of retraining its workforce because employees learn from each other while working. Secondly, the process also saves time. The third advantage of learning from each other’s experiences is that it gives the employees diverse skills, which they would not have acquired through formal training as the latter often focuses on adding value to primary knowledge (de Kluyver 13).

Chapter 7 Question

The objectives of a firm when entering a new market determine its level of success. Without proper planning and focus on the needs of the customers in the new market, there is the likelihood to encounter a problem meeting the market expectations. The objectives also determine the competitiveness of the firm in the new location. Entering a market means facing new competitors, who could be established in the region. In order to outdo them, the new entrant requires having the right objectives aimed at serving the customers better than the competition.

The choices of market entry mode require carrying out research about the new market to establish the objectives of the firm. The approach ensures that the company does not blindly venture into the unknown region. The second approach advocates for replicating the success of the firm in the established markets. As a result, the new market entry follows the same strategy except for a few changes in the required areas. The first approach is better as markets often differ in needs and priorities.

Western multinationals have set great examples of how to enter new markets. For example, the soft drinks giant Coca-Cola has a wide network of customers away from home, as it serves the needs of each new customer in a unique way. The brand has a strong base in Africa as it knows what African needs. In fact, learning each new customer’s needs has made the brand a household name in many areas. Other corporations from the West have done the same with their international markets and give the lesson that markets are different from one another and should be treated so.

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Chapter 8 Question

For institutional investors, implementation of The Stewardship Code is a priority that can only bear fruit when completed in the right way. The first step in implementing the code should be planning. It requires the investors to declare their methods for implementing the code publicly after a stated period, for example, at the end of every quarter.

The second step in implementing the code should entail defining the parts of the information to publicize (Tallman 29). The institutional investor will know that only the most relevant parts of information should be disclosed to the public. Disclosing all the information in the investor’s possession has its negative implications.

The third step should be the disclosure of the information required by The Stewardship Code. The investor should ensure that all information relevant to the situation is made public. The aspect increases the company’s credibility in the eyes of the community. It adds many benefits including increased confidence from other investors and company stakeholders. It is also a requirement of The Stewardship Code for the investors to cooperate with other parties with vested interests in the investments. Thus, investors should ensure that they work within the laws of various countries. The laws, for example, may require the institutional investor to report to the local tax authorities (Lamont 91). The investor should follow the requirement from the planning period through to the disclosure period. While the code requires the investor to disclose the intentions of their activities, care should be taken to ensure the steps are not illegal in a new country. There are some regions, in which the code may not apply. The list of requisites should be put into consideration from the beginning.