How Do Companies Use Global Strategies to Gain Competitive Advantage Essay

How Do Companies Use Global Strategies to Gain Competitive Advantage - Essay Example There are various firms which used to operate on local basis and the performance f such firms used to be pretty subdued. But those companies entered the international market only to gain competitive advantage and became major multinational companies. The present study has been conducted in order to analyze how companies use the global strategy to gain competitive advantage. Also the essential success factors of firms to succeed in the international business have been discussed. Add to that it has also been discussed that how companies can fail in the international market due to lack of planning and vision. The firms at the focal point of discussion happen to be the largest retailer in U.K. and the second largest retailer in the world Tesco (Henry, 2008, p. 89). Thesis How companies can use globalization strategy to gain competitive advantage? Analysis Global strategy can be defined as the strategic guide of a company to globalization. On the other competitive advantage can be defined as various ways via which a company can get the extra edge over the competitors. An ideal global strategy of a company should address issues such as the extent of presence in the global market, different strategies that can be adopted to develop strong global presence, the probable barriers to entry into the global markets, different modes of entry into the global market as well as the probable targeted international markets. Academic research on the global strategies came of age during 1980s. This included various research work done by Christopher Bartlett, Michael Porter and Sumantra Ghoshal (Kolb, 2008, p. 92). There are various factors that influence a firm to go global. However, one of the most important of the factors is the drive to get... This paper makes a conclusion that In the modern day business environment globalization is inevitable. Companies look to go beyond the domestic borders to enter new markets and target new customers. There is very little doubt that entering new foreign markets are extremely risky. But with high risks the company gets the opportunity of high return. One of the main objectives of entering the global markets is to gain competitive advantage overt the competitors. This essay stresses that one classic advantage of this has been Tesco as the firm used to be 2nd best retailer in U.K. But as the company decided to enter global markets, Tesco not only became the largest retailer in U.K. but also the third largest retailer in the world. However, there are some issues that a company should keep in mind while entering a global market. One of the major issues is the choice of market entry strategy. While Tesco went for a joint venture which seemed to be quite fruitful for China; the same company d ecided to go alone and use Greenfield strategy to enter U.S. which unlike China happened to be a matured economy. Also it had presence of Wal-Mart. And unlike china Tesco failed to make the same impact. Although there were other external factors but the major issues for failure was internal. Hence to conclude it can be said that despite of all the benefits of globalization a company should concentrate on developing appropriate strategy and execution of it to gain competitive advantages.