Today we live in a global economy in which the time taken for people to move between continents has been significantly reduced and in which the Internet and other connections make instant connections possible. The business response of large business organisations has to recognise that they now operate in a global market place and develop appropriate strategies. A global strategy is an organisational plan that takes into account these new global realities.
For example, in food manufacturing companies like Nestle, Kellogg’s, and Cadbury Schweppes have developed global distribution and marketing networks, based on powerbrands i.e. market leading brands that are recognisable in nearly every country in the world.
Key aspects of global strategy include:
1. Treating the global market as the domestic market.
2. Creating a global marketing mix, which at the same time recognises regional and national differences, such as differences in language and tastes.
3. Creating global production and distribution systems, e.g. superfactories covering major areas of the world.
4. Concentrating on powerbrands – the most successful brands and products. Because the global market is so large there are substantial benefits to be gained from economies of large scale production, marketing and distribution. Rather than producing thousands of different products, it makes sense to narrow down the range to a much smaller number in order to support these brands across the globe.
PEST analysis
Creating a global strategy involves first carrying out an environmental analysis of political, economic, social, and technological trends that are relevant to operating on a global scale. An organisation’s mission statement should then reflect this global focus.
A mission statement is a relatively short statement outlining the purpose of an organisation. It creates a direction for the organisation.
Having a clear set of objectives enables strategic planners within an organisation to develop the plans – strategies which enable the organisation to focus on global markets.
A key element of this global strategy will be a global marketing plan identifying an appropriate marketing mix, coupled with production and distribution plans.
Large airlines operate in competitive global markets. A key element of the global strategy is to decide on which countries and routes to concentrate activities. The airline will then build a strong global brand image so that it is instantly recognised and valued. Marketing activities will involve building up loyal customer support in targeted markets, and out-competing the competition through superior customer service, reliability and other customer benefits.