Global Strategy Essay Example | Topics and Well Written Essays - 2500 words

Global Strategy - Essay ExampleThese are ownership, location and internalization. self-possession is analogous to Porters competitive advantages and is concerned with ownership of such things as proprietary technology, superior marketing skills, economies of human face in production, superior management skills, and other firm-specific capabilities. Location is ability of a follow to use location advantages in reducing manufacturing be. Finally internalisation deals with whether activities are performed in the bon ton or outside the company.This case study done by Liu, H. and Li, K. (2002) discusses Haier, a leading Chinese company specialising in home electronics. This company in its short time has grown from a small enterprise employing 600 people to its present spatial relation as a leading multinational enterprise (MNE) which is in the Fortune 500. Haiers pathway to internationalisation has been anomalous and highly effective.According to Liu, H. and Li, K. (2002) the an alysis of its internationalisation strategy can be viewed in terms of the purlieu - strategy - performance framework. The environment being classified into two classes of positive factors collectively referred to as the trend and the negative factors collectively referred to as constraints.The end of the cold war which came as a result of fragmentise of communism in Europe created an international environment with reduced polarisation. At the same time mainland China was liberalising and opening its market in the 1990s. China has had the longest sustained economic branch since the 1980s. The annual fairish growth rate has been more than 8% for more than 20 years. Haiers history of growth started in 1984 with the participation of current CEO Zhang Rulmin. At that time Chinas economy was drastically changing. Competition among the domestic producers of home appliances was hotting up. relaxation behavior of the economy brought foreign players to debate in an already saturating m arket. The admittance of China into the World trade disposal (WTO) in 2001 opened the floodgates. Many companies from developed countries were rushing to enter the Chinese market. Not willing to compete using a price war Haier was forced to look outside China for further growth in its business.The external constraints on Haier in its internationalisation strategy were lack of financial resources. The company was under-equipped and under-financed. For the company to expand it had to develop innovative strategies for financing its overseas expansion. The Government was supportive of Haier and allowed them to form a cuss and use it as a vehicle of financing its own expansion abroad. The Japanese firms which internationalised followed two generic wine paths as shown in the diagram below. Figure 1 Internationalization paths for Japanese Companies, Liu, H. and Li, K. (2002)The Type I path was popular as it allowed the company to use the ventures in developing countries to acquire skill s for international operation. These skills are employ to enter developed countries. This strategy also favors a low cost strategy where the lower costs of manufacturing in developing countries are used to service the market in developed countries. The Type II strategy which starts with entrance into developed markets and then expansion into