RESOURCE CONCERN IN A GLOBAL STRATEGY Rosa Chargois CTU Online MGMT690 Resource Concern in a Global Strategy Phase 1 Individual Project January 11, 2016 1 RESOURCE CONCERN IN A GLOBAL STRATEGY 2 Resource Concern in a Global Strategy Global strategy of an organization for business expansion and operations has become more important in the present scenario because of the motive to increase market share and profits after selling of the products. However, it is not an easy task to enter in global world for business operations because of concern of resources and other factors. The main reason behind concern of resources in a global strategy should be proper utilization to develop any products and avoid legal actions of the law (Frynas & Mellahi, 2015). Further, there are limited resources to develop any type of product, such as clothing products. Therefore, it is necessary to utilize resources in a limited ways to run the business for a long time. At the same time, the resources should also be a concern in a global strategy due to maintaining environmental ethics and respecting the governmental regulations. In most of the situations, resources should also be a concern in a global strategy because of unification across country borders and maintaining a cultural value (Frynas & Mellahi, 2015). Such type of resources' concern in a global strategy not only helps to respect related industry, but also create sustainability in products manufacturing. On the other hand, the resources that may be a concern in the China are the technological advancement, communication, and raw material for the production of the final products. Further, it can also be possible that there must be financial burden, and difficulties in arrangement of experienced and talented employees, as well as cost effective labor cannot be arranged in China (Frynas & Mellahi, 2015). Therefore, these resources can be the main concern in the Republic of China. In most of the situations, availability of water resources in a proper way can also be a concern in the selected country because of scarcity and pollution of rivers. RESOURCE CONCERN IN A GLOBAL STRATEGY 3 Now, these resources would impact the decision to move to the China as the increasing financial burden and expensive products after manufacturing. Further, there must be increasing local taxes because of the harm of the natural resources and probability of pollution, such as air pollution, and water pollution etc. However, the population of this country is beneficial for any industry because it can manage every issue or concern of the resources (Thomas, Smith & Diez, 2013). Apart from this, it can be seen that this concern of the resources would impact the decision to move to the China when challenges would arose effectively. Additionally, the support of the government that can be a resource would be supportive for the decision to move to the China an implement the business. Impact on Competitive Strategy in the Global Market Such type of concern of the resources would impact my competitive strategy in the global market as the increasing business expansion due to quality of the products. The resources are limited, but the product's quality would reduce the impact of competition in this country and costly products can also be sold. Further, these resources would also impact the competitive strategy in the global market through improving market share and sells of the products (Peng, 2013). In most of the situations, the competitive strategy in the global market would increase the brand value of the products due to cultural perspective that always increase the value of the people. It can be seen that the company would achieve a global image in the China when it would help to improve economic condition of this country. Additionally, the resources would also impact my competitive strategy in the global market that how to manage any concern regarding resources basically in China. RESOURCE CONCERN IN A GLOBAL STRATEGY References Frynas, J.G., & Mellahi, K. (2015). Global Strategic Management. USA: Oxford University Press. https://global.oup.com/academic/product/global-strategic-management Peng, M. (2013). Global Strategy. USA: Cengage Learning. http://www.cengage.com/search/productOverview.do;jsessionid Thomas, H., Smith, R., & Diez, F. (2013). Human Capital and Global Business Strategy. USA: Cambridge University Press. http://ink.library.smu.edu.sg/lkcsb_research/3674/ Shenzhen Coco Furniture Co 4 Rosa Chargois CTU Online MGMT690 Phase 2 DB January 13, 2016 Tools to Analyze the Industry and Competitors In the context of business expansion in other countries, it is necessary to move toward a more formal analysis in a global marketing plan. In this consideration, there is required some effective tools to analyze the industry and competitors in a global marketing strategy or plan for suitability of the business. Therefore, the best tools that can be used in this situation by the Shenzhen Coco Furniture Co. in China are the SWOT Analysis, PESTEL analysis, and Porter's five forces theory (Ahlstrom, 2009). These three tools are mostly utilized by the companies to analyze global market conditions of the different countries to enter and start the business. It is also considered that these tools help an organization to make an effective marketing strategy to grab the opportunities of the target market without any risk and challenges. However, there are various adverse situations in Chinese market that can usually inhibit the growth of the Shenzhen Coco Furniture Co. At this stage, one or two of these tools can help the Shenzhen Coco Furniture Co. to prepare to move toward Chinese market. Brief Summary of the Tools PESTEL Analysis: PESTEL analysis is an important aspect for an organization to analyze new market entry opportunity. In this, PESTEL Analysis is typically denoted as Political, Economic, Social, and Technological Analysis, including Environmental and Legal analysis. Political analysis basically provides information about the tax policies, stability of government, entry mode regulations, and social policies, as well as trade regulations of the government (Ahlstrom, 2009). Further, economical environment provides information about the income of buyers, credit accessibility, unemployment rates, and inflation within a country. At the same time, social environment generally consider about the population demographics, distribution of wealth, and changes in lifestyles and trends, as well as educational levels of the people. Further, in technological analysis, discoveries and innovations and R&D considered by the organization to prepare accordingly. Moreover, environmental analysis consider about the waste disposal laws and environmental protection laws within the target countries (Ahlstron, 2009). At last, the legal analysis generally includes employment regulations, patent infringement and others laws to protect entry of the illegal products and services of the business. Porter's Five Forces Theory: The Porter's five forces model is basically represented five major external forces that take part in the competitive business, strategic analysis towards a company's profitability and competitive advantage. Additionally, the Threats of new entry, Substitute products, Powerful suppliers, Powerful buyers, and Competing for position are the five forces that constitute this model (McGuigan, 2010). In this concern, the analysis of these five forces is highly significant in strategic formulation and evaluation of strategic position of the firm. Reason of the Best Ways to Analyze the Market I think these tools are the best ways to analyze the market for the Shenzhen Coco Furniture Co. in the China because of the effectiveness. These tools can explore all aspects of the market in a clear manner for the company. Further, I can also state that these tools are the best ways to analyze the market because Chinese market is filled with competition and challenges regarding government regulations, and policies, as well as changing trends. Ways to Use These Tools in Plan These tools would be used in the plan through conducting market research of the Chinese market. Further, these tools would also be utilized in the plan according to the situations of the market conditions, such as availability of the competitors and changing interest of the people. Further, these tools would also be utilized in the plan on the basis of conducting primary research in the Chinese market for the furniture industry. References: Ahlstrom, D. (2009). International Management: Strategy and Culture in the Emerging World. USA: Cengage Learning. McGuigan, J. (2010).Managerial Economics. USA: Cengage Learning. Running Header: GLOBAL STRATEGY TOOLS Rosa Chargois CTU Online MGMT690 Global Strategy Tools Phase 2 Individual Project January 17, 2016 1 GLOBAL STRATEGY TOOLS 2 Abstract It is the true fact that market of the world is filled with competition that specifically required global strategy for business expansion and getting success. There are various multinational organizations in the world that utilized some global strategic tools to achieve growth in the context of increasing sales, profits, and market share (McGuigan, 2011). In this scenarios, the global strategic tools that generally utilized by these organizations are the SWOT analysis and Porter's five forces theory to fix the positive success rate in the global market. GLOBAL STRATEGY TOOLS 3 Global Strategy Tools The global strategy tools, such as SWOT analysis and Porter's five forces theory are the most important tools to analyze foreign market conditions for the business success. Now, these can be described as below: SWOT Analysis: The SWOT analysis is comprised with the strengths, weaknesses, opportunities, and threats analysis that expressed the present conditions, such as internal and external environment of the company. \"The strengths of an organization are basically concerned with internal resources and capabilities that take part in the development of an organization. The internal resources and capabilities provide the foundation of an organization to take competitive lead in the market to increase market and profit share with an increasing customer base and sales of the products\" (McGuigan, 2011). For example: patents, strong brand name, good reputation among customers and access to high grade natural resources as well as distribution networks access favorably are the strengths of an organization to establish a strong presence in the global market. Further, the weaknesses of an organization also concerned with internally that can be identified as the absence of certain strengths. In this way, lack of patent protection, a weak brand name, less reputation of product among customers and poor quality of product or services can be considered as weaknesses. This situation of a business venture takes towards financial loss and decreasing sales. Further, lack of natural resources and poor distribution channels are also identified as weaknesses of the organization. On the other side, the opportunities are related to the external environment of the organization that realized as profit and growth chances in the global market. At this stage, an unfulfilled customer need, arrival of innovative technologies, weak rules and regulations and GLOBAL STRATEGY TOOLS 4 removal of international trade barriers are the opportunities for an organization to take competitive lead in the market. These opportunities provide several benefits to an organization such as business expansion, increasing new customer base, and protection from ethical issues. Further, threats specifically related to the external environment of the organization that impacts on its business adversely (McGuigan, 2011). When the changes in the external environment do not favor the business, it can be analyzed as threats for the firm. For example, the shifts of consumers away from the firm's products and services, entry of substitute products in the market, implementation of new rules and regulations, and impose of trade barriers. Porter's Five Forces Theory: The Porter's five forces theory is concern with external forces that helps an organization to know about competitive market place. \"These external forces are known as the threats of new entry, threats of substitute products, bargaining power of suppliers, and bargaining power of buyers, as well as intensity of competitive rivalry\" (Ahlstrom, 2009). Thus, the analysis of the competitive market through this theory helps the organizations gain a better understanding, knowledge, and skills of the global strategies in order to achieve goals of the industries. In this, the threat of new entry basically denoted about the entry of new competitors that affect the business of existing companies in the same product line. Therefore, in order to prevent this threat, the companies can make some roadblocks, such as product differentiation in order to formulate its strategies in the global market. These barriers inhibit the effect of entry of new companies up in most of the situation for the business. Further, the bargaining powers of suppliers and buyers also affect the business in terms of sales and profitability that need to be kept in mind while formulating and analyzing various strategies to sustain the business growth. Suppliers try to gain an advantage when they own a unique product or there are fewer companies GLOBAL STRATEGY TOOLS 5 competing with them (Ahlstrom, 2009). On the other side, some special customers as the efficient bargaining skills can lower the profits earned by an organization in the market. This can be possible only in case of purchasing material in large volume or quantity by the customers. Further, the threats of substitute products also affect the industries in achieving competitive advantage and increasing profitability of the competitors. Therefore, the threat of substitute mainly depends on the price change to give an alternative to the customers to choose the products. Further, the intensity of competitive rivalry among existing competitors to get higher position is also a threat for industries. The competitors' growth, product differences, and brand identity, as well as corporate stake are also the elements that raise competitive business strategies in the market. Will The Tools That Were Selected Work Best For A Global Strategy? The tools that were selected to use in global strategy would work best because these can help the organizations to develop best business plan according to the market conditions and internal resources capacity. Further, these tools would also work best for a global strategy because of creating a framework for thinking of strategic planning to acquire profitable technologies (Fleisher, 2016). Additionally, SWOT and Five forces guide the process through forcing managers and other decision makers in order to consider specific aspects of their company as well as the competitive landscape. What Evidence Support My Decision? In the context of selection of SWOT analysis and Porter's five forces theory tools in global strategy, my decision is right because these tools are utilized by most of the successful organizations online (Fleisher, 2016). For example, Under Armour that conduct business in the athletic footwear and apparel industry generally used Porter's Five Forces theory tools to analyze GLOBAL STRATEGY TOOLS 6 competitors' market condition, such as Nike, Adidas and newer players. Here, Under Armour makes the global strategy on the basis of competitors' products and services. How Would You Refute The People Who Chose An Additional Tool Rather Than One Of The Tools That You Selected? In order to refute the people that chose an additional tool rather than one of the selected tools, I would state that they should first conduct research the market regarding these aspects. The people can check the implementation of these tools utilized by the international companies in the world (REIT, 2012). There are few tools that are utilized to analyze the global business environment by the companies, such as SWOT analysis, PESTEL analysis, Porter's five forces, and others, but mostly these two tools are implemented by the organizations to get success, such as PepsiCo, HP, and Microsoft etc. Based On The Tools That Were Selected, Provide A Brief Analysis Of The Market, Using Those Tools. Global market is filled with various challenges and opportunities for a company that can prepare for the business expansion. The challenges within the global market can be seen as competitors, innovative products, and availability of resources. However, the opportunities can be seen as growth of the business and large profits. But, recognition of these aspects is not easy for the companies (REIT, 2012). Therefore, it is necessary to use SWOT analysis and Porter's five forces theory to know the competitive market place for better performance. Conclusions From the above discussion, it can be concluded that global strategy tools, such as SWOT analysis and Porter's five forces theory are effective to analyze market business environment. GLOBAL STRATEGY TOOLS 7 These tools are very helpful for those organizations that are planning to be globalized. These tools can assist the organizations that how to prepare global strategies for better performance. GLOBAL STRATEGY TOOLS 8 References Ahlstrom, David (2009). International Management: Strategy and Culture in the Emerging World. USA: Cengage Learning. http://www.waterstonesmarketplace.com Fleisher, Craig (2016). Business and Competitive Analysis: Effective Application of New and Classic Methods. USA: FT Press. http://www.ftpress.com McGuigan, James (2011).Managerial Economics. USA: Cengage Learning. http://www.cengage.com/search/productOverview. Reit (2012). RESEARCH ANALYSIS. Retrieved from: https://www.jamstockex.com/website/uploads/KPREIT%20ANALYSIS%20Final6.pdf