The paper "International Strategic Management of Multinational Companies Compared to Companies Operation in one State" is a perfect example of a management assignment. First off, the global strategic management is based on the fact that there are different borders and thus customers compared to the one-state strategic management that is localized. This means that when formulating the strategic plans, the wider consumer base is of consideration in global companies whereas in local companies the focus is only on the local consumers. The concept of a broad customer base is very essential when talking of multi-country business being that different countries will have different cultures that would shape consumer behaviours.
So factoring in this in the strategic planning processes will enable to make the business expand and grow all together. The second difference is the extent to which the coordination and involvement of the centre. Coordination in this context refers to how decisions to adopt a given strategy both at the local or global level is made and implemented. The coordination of strategic activities and plans in global strategies for global companies requires more of coordination of activities from a centralized position as well as in subsidiaries.
On the other hand, the strategic management in one company that operates in one state does not require centralized coordination as there is the ease of control and link up between different places in the nation’ s market. This is important in ensuring that there are properly functioning and integration of the practices as well as rolling out plans and executing them independently. The third difference is the degree of product standardization and responsiveness to local markets.
Product standardization refers to the extent to which the products, services and operations are tailor-made for a specific country. The strategic management for a locally based company will come up with more standardized goods for a given market being that the company has a strong grip and understanding of the market niches as well as the target markets. On the other hand, when multinational companies are rolling out their global strategy, there is an assumption that the centre has taken account of standardization that is to work well with the many and different local market niches and target customers which is not the case.
Product standardization improves customer loyalty and also the awareness of the product in the market since it is tailored to meet the demands of the customers. Subsidiaries and joint ventures in the global strategies might offer a chance for the multinational corporations to standardize the goods but it usually takes more time and resources compared to companies based in one nation. The other major difference in global strategic management and the local strategic management is the manner in which there are integration and competitive moves.
Integration and the competitive move may refer to the extent to which the firm in question has independent sources of competitive advantages that are interlinked. In the local strategic management in the firms in one country, the level of strategy integration and competitive moves are independent and solely based on the local rival’ s competitive moves as well. On the other hand, for the global based companies spread across different countries, the strategy is formulated based on the analysis of both local and international firms.
This means that global strategies are more based on rivals in more than one market. This means that global companies take a localized or stand-alone form of approach whereas the global companies take the global strategy that is more of an integrated approach that applies across different countries.