Strategy, Organization and Global Firms
Global market is a challenge. Initially powerful tariff and legislative regulation are no longer reality. Most global players, i.e. the companies, which expanded in the 60-s and 70-s, had built up a whole network of activities in the markets they were entering. With the intensification of international business and the development of international alliances and institutions (WTO, IMF) the barriers to international trade fall. The companies face new conditions. The competition on the global market forces the companies going international to adjust their structural organization and architecture to the new circumstances. The complexity of the organizational structure of transnational companies is increasing.
Historically the majority of global companies emerged from the American firms. There might be several reasons, why:
1)The domestic market in the USA is big, sophisticated, with high quality standards.
2)After the World War II European countries had to recover and Americans have played a significant role in this process, i.e. American companies have operated outside US and have acquired experience in international business.
Nowadays international companies emerge on the basis of technological breakthroughs, innovations, which take place in all developed countries. For companies, operating on a global market it is essential to take advantages of all particular markets and realize the location economies. Some markets can offer a leverage for the economies of scale, some – for leveraging valuable skills. The benefits from doing global business are connected also with the time of entry at the national markets. For example, the international companies, entering the Baltic market, as pioneers among other international companies, tended to realize the economies of scale in order to capture a certain market share. Later as the quality standards developed, they had to diversify the offering and in present some of them are not only transferring distinctive skills, but leveraging them as well. …
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- Strategy, Organization and Global Firms
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