Unit 1 Individual Project
Introduction
Expanding at the global level refers to globalization. Globalization has been good from the organization's perspective. However, it also interrelates with several paradoxes. Of course, resources may be a concern in the global strategy. In the selected country, some resources may become a concern for the organization. It can create an impact on the decision to move to this country. The effect on the firm's competitive strategy is also apparent. This analysis will cover all these aspects with some valuable insights and implications.
Why should Resources be a Concern in a Global Strategy?
Resources have been a concern in global strategy for multiple reasons. The internalization theory stresses that resource utilization and efficiency, instead of depending on external stakeholders or partners in manufacturing, marketing, and distribution, should be internalized. The critical assumption is that the firm must have control over resources. Internalization of resources can give reasonable control in operation. The most important thing is to preserve the core competencies of the organization when emerging at the global level, and adequate resource control is the key driver (Grøgaard, Ryg, & Benito, 2019). Resource is a concern, especially when it comes to the natural resources in the operating country. For instance, in the furniture industry, companies rely on natural resources, such as forests (wood) and water. Thus, the whole supply chain must be stable and consistent to sustain the production function. It is all about enabling natural resource security to have an uninterrupted supply chain function. Global expansion is associated with a dynamic economic and geopolitical climate, and the cost and availability of resources always become a concern. The company must evaluate these possible risks and set the foundation for better business sustainability. Global expansion also accelerates the competition for natural resources. It typically increases costs and creates challenges as far as resource security is concerned. Global demand is dynamic, and strategic allocation of resources is the only way to gain success (Lynch, 2021).
What Resources May Be a Concern in the Country You Selected?
China has been selected as a potential country for global operations. Some resources will become a concern. For instance, labor resources are one of the critical concerns. Despite extensive and low-cost labor in the country, it is essential to have skilled labor and talent in this furniture industry. Access to the right talent at the right time is a significant concern, and the firm must strive for it when operating in China. The raw material is also a resource concern. The most important thing is to ensure the supply chain stability and consistency. The scarcity of natural resources can become apparent, but the firm needs to recognize potential risks. Energy resources may also become a concern in this context (Kunc, 2018). The firm needs consistent and reliable energy resources for production or manufacturing. The stability of the energy infrastructure in China is a positive aspect, and the firm will take advantage of it. In China, there is a robust infrastructure that can support logistics and transportation. It is essential to ensure smooth operation. Therefore, there is a need to navigate the reliability and quality of the network (transportation). Transportation modes become critical, as they are a resource when operating at the international level. Technological resources have become a concern. High-quality and luxury furniture items require advanced technologies, and technology infrastructure is a significant concern. Eventually, access to the capital is also an issue. Typically, there have been funding options in China, but the firm may need help with several paradoxes as far as substantial investments or funding is concerned (Maheshwari & Agarwal, 2020).
How Will this Impact the Decision to Move to the Country That You Selected?
These concerns related to resources can influence the decision to move to China. For instance, it is related to labor resources. Any possible shortage of skilled labor and talent can influence the entry decision. It is essential to navigate possible strategies for talent acquisition and development in the country. If the talent or skilled labor is not available, the decision to enter China cannot be justified. The raw material is interrelated with a stable and consistent supply chain. There may be supply chain disruption due to natural disasters, political unrest, and many other forms of disruption (Lynch, 2021). It can influence the decision. The critical assumption is that the firm must strive for a resilient supply chain function when operating in countries like China. Location strategy becomes essential to China when it comes to energy resources. For instance, if the firm operates at a location where energy resources are not stable, the influence on the decision is evident. Access to natural resources is apparent, but China has regulations related to deforestation and exploitation of natural resources. If the regulations become or remain stringent, the firm may overturn its entry decision. Resource security should also be perceived from the perspective of the government or country. So, a well-balanced approach is needed to emerge as a liable entity. Access to technology and financial resources is evident, and the influence on the entry decision is less probable (Middle East Policy Council, 2022).
How Will this Impact Your Competitive Strategy in Your Global Market?
The link between resource consideration and competitive strategy is in the limelight. If the firm has access to skilled labor with reduced production costs, it can enhance competitiveness. Integrated cost leadership and differentiation can become an appropriate competitive business strategy for the firm, which can lead to a competitive advantage in the competitive business landscape (Taylor, 2012). The firm must strive for effective and efficient resource allocation to set the foundation for competitive pricing in the furniture industry. Access to technology is one of the major concerns. The organization can set the foundation for competitive advantage, as advanced technology can lead to excessive innovation. For instance, a firm with adequate funding can invest in the research and development process. It is all about leveraging the technological capabilities and resources available in China, and it must be reflected in the research and development functions. The firm must strive to become the technology leader in the furniture industry, and it is the best way to gain and sustain a competitive advantage. Aligning with China's natural resource security strategies is also an excellent decision to enable smooth access to the required raw material. This integration will also set the ground for a resilient supply chain, and it is also one of the principal competitive factors (Kunc, 2018).
Conclusion
It concludes that the organization has the potential to enter China by evading concerns related to resources and utilization. This brief analysis streamlined possible resource concerns in China that can influence the decision. Nevertheless, the firm can get a competitive advantage if it evades these concerns and ensures effective resource management. Market entry decisions may become certain due to multiple advantages. Yet, the organization must show some resilience by making some adjustments in the resource strategies. It is all about becoming relevant and competitive in the global furniture industry.
References
Grøgaard, B., Ryg, A., & Benito, G. R. (2019). Bringing corporate governance into internalization theory: State ownership and foreign entry strategies. Journal of International Business Studies, 50(8), 1310–1337. doi:http://dx.doi.org.coloradotech.idm.oclc.org/10.1057/s41267-019-00237-5
Kunc, M. (2018). Strategic Analytics: Integrating Management Science and Strategy. John Wiley & Sons.
Lynch, R. (2021). Strategic Management. SAGE Publications .
Maheshwari, & Agarwal, S. (2020). Strategic Management: A publication of SBPD Publishing House (Sanjay Sahitya Bhawan). SBPD Publishing House.
Middle East Policy Council. (2022, March 10). China and the Global Resource Balance. https://mepc.org/speeches/china-and-global-resource-balance
Taylor, E. C. (2012). Competitive Improvement Planning: Using Ansoff's Matrix With Abell's Model To Inform The Strategic Management Process. Allied Academies International Conference. Academy of Strategic Management. Proceedings, 11(1), 21-27. https://www.proquest.com/scholarly-journals/competitive-improvement-planning-using-ansoff-s/docview/1272101639/se-2?accountid=30552
Assignment Details
Unit 1 – Individual Project (100 points)Description
Mike, one of the marketing strategists on your team, stops at your office door wanting to talk. “We use fabrics that are made domestically; however, there are issues with using these same fabrics globally. There are laws and regulations that prevent us from shipping these fabrics to other countries. This is a huge concern. One of our primary selling points is the consistency of quality of our product.”
You confirm Mike’s concern, “That’s an excellent point,” you say. “Now you’ve just given yourself and our team more work for the presentation. I’m sure that will come up. One of the board members used to run a textile plant in China.”
Mike nods his head in agreement. “I imagine textiles will not be the only resource concern,” he says. Consider the following in your response:
Why should resources be a concern in a global strategy?
What resources may be a concern in the country you selected?
How will this impact the decision to move to the country that you selected?
How will this impact your competitive strategy in your global market?
Review the reference materials on global strategy as there is information that may assist with the assignment
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