Unit 1 Discussion Board Post
Defining Global Strategy
Global strategy refers to the standardization of products, business operations, and marketing in multiple countries. The intention should be to enhance economies of scale and enhance the visibility of the global market share. The most important thing is to ensure a consistent brand image at the worldwide level (Grøgaard, Ryg, & Benito, 2019). Apart from standardization, the organization can implement international and multinational strategies to increase sales globally. The critical assumption is that the firm must contain a unified marketing approach to integrate with the local culture. Preserving the core message is also a vital assumption to keep the essence of global strategy (Grøgaard, Ryg, & Benito, 2019).
Possible Countries for Globalization
There are three possible countries regarding globalization, especially when it comes to the furniture industry. China is one of the potential countries because it always contains an enormous market potential. In this massive consumer market, the middle class is rapidly growing, which explains the excessive demand for high-quality furniture items. China is a good option for the organization as far as cost-effectiveness and cost-efficiency are concerned. Low production cost is one of the best advantages. Critically, the organization can face intense competition in this country due to the emergence of local manufacturers in the furniture industry. Germany is also a potential country. "Made in Germany" is a global perception that convinces the global audience. The firm can enter this country to improve its brand image. Good design heritage is also a positive aspect that can help the organization set the foundation for differentiation. The organization will also have access to other European countries. Critically, the production cost will remain higher in this country, thus reducing cost-effectiveness. Germany also has stringent regulations, and practical compliance has become mandatory. Brazil is the third potential country for globalization. It is one of the emerging markets in the world. The growing middle class is an opportunity as far as the demands and sales of furniture products are concerned. Appreciation for craftsmanship and design has been a cultural value, and it aligns with the firm's goals. Critically, there has been economic volatility, creating some risks and barriers for global companies. The organization can also stumble due to excessive infrastructure challenges. Many regions or areas still need to be developed, and this may create some supply chain or logistics challenges for the organization (Kunc, 2018).
Choosing a Country for Globalization
Selecting a suitable country for globalization depends on multiple aspects. China is an eligible country for the furniture company, and it is based on the pertinent rationale. For instance, Chin contains more market potential. In this massive consumer market, the firm can experience more sales due to the demand for high-quality and luxury furniture items. Low labor cost is also one of the significant benefits. The firm can have access to low-cost manufacturing options along with a well-established supply chain. China has become one of the best manufacturing hubs in the world due to related infrastructure and flexible regulations for manufacturers. A presence in China can enhance the firm's competence at the global level. It is all about enhancing brand visibility globally (Kunc, 2018).
This selection of the country is based on the advantages or benefits that the company can gain. However, the global business climate is dynamic, and a strategic shift is mandatory to move forward. So far, China is the best option compared to Brazil and Germany, and it is the best time for the organization to move forward with the appropriate market entry strategy.
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.
MGMT690 Scenario for Discussion
Company Biography
John Ferrer and his wife Deborah started their own corporation, a large custom furniture manufacturer located in Boston, MA. Their initial accounts were in the Northeastern region of the United States, and they annually observed a constant profit increase. They were able to grow the company enough to go from five distribution and manufacturing plants to 10 to allow shipping to 48 states. Although they have two retail stores, one located in Phoenix and one in Boston, their primary source of revenue is online catalog sales. They have 10 manufacturing plants and distribution centers throughout the country.
John and Deborah’s corporation is known throughout the industry for its exceptional customer service and superior quality. The contemporary designs lend themselves to a younger market, and the customer base is predominantly upper-middle class because it is one of the highest priced furniture companies in the market. Part of the appeal of John and Deborah’s brand is their consistent involvement with the local communities to create green gardens. They have also been a major contributor to organizations that build houses for people in need.
One of their primary strengths is their vertical integration. They have a team of in-house designers saving the company design costs and allowing the flexibility to rapidly change designs as the market changes. Their products have been featured on several prominent home design and gardening shows and have been endorsed by several well-known designers.
Because of a recent housing market sales decline, home renovations have slowed significantly. This has impacted the amount of furniture and fixture sales and continues to impact revenue. Furniture sales in the United States have decreased significantly, and John and Deborah have recently been discussing the possibility of global expansion.
Another potential threat to their company is that many higher-end brands have been marketing aggressively and creating lines for popular retail stores. These allow the lower-income consumers to have access to high-end brands at a much lower price point. So far, these lines have been incredibly successful and have significantly increased profits for competitors. Many of these competitors have also had great success in the global marketplace with these lower cost replicas.
John and Deborah know that it is time to seriously consider expanding their business. They want to be able to be sustainable and find other ways to increase sales and business. They are open to looking into the global market, but they want to be sure that it is the right move for the business. They have requested an advisory board meeting next month in which you will present the global marketing strategy. As the market strategist, you will play a key role in helping the board decide if this is the right move for the company.
The Problem
You are sitting in Deborah Ferrer’s office. After the customary small talk, Deborah sits forward and states, “I am very impressed with the work that you have done as the strategic marketing manager. Since John and I started this company in Boston, we have seen continuous growth, but nothing like what we have seen since you started. However, the housing market is really starting to impact our profits. This last quarter’s numbers were not looking good.”
You reply, “We have some stiff competition, too, with the other brands creating retail knock-offs.”
She counters, “We’ve had great success with your strategies in the domestic markets, but we do need to think of a new approach and strategy. I have complete faith in your abilities to take this company exactly where it needs to go. I must say that we are really counting on you, and I know that you will follow through.”
“I will make sure that we do well. Do you have any new projects for me?” you ask.
Deborah smiles and says, “You know me well. I do have a new project for you. I sent you an e-mail just before our meeting. I’m curious if expanding in a global market would be a good move for our company. I would like you to look into this for me.”
“Our team is definitely up for the challenge,” you say with enthusiasm.
Deborah shakes hands with you warmly, and you make your way out of the meeting. As you drive out of the parking garage, you think about your success with the company. You cannot wait to get started.
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