Wednesday, December 9, 2015
The Future consideration for Global Markets
In reading Strategies that fit emerging Markets and Lincoln Electric, I could not help but to think that to "fit in" to an emerging market a company would have to be in the right industry when this change in the market occures, additionally a company would have to consistently thinking about way in which the current state of their industry could change and what that change may cause of the company.
In considering company globalization, I agree with the five strategies as suggested by Khanna, Palepu, and Sinha. Social and political systems in a country should be the most important of these strategies given that it can change with time but is also so specific to a certain country. Being in the right industry but the wrong country would dangerous if consideration for the socioeconomic is lacking. This would influence all avenues of the global venture, including HR, company culture , productivity and the company brand. Case in point is when Ebay executives ignored local employees when there was distrust of running servers out of China.
“The day they switched to the US servers despite our protests, traffic dropped 50 percent because access speeds were too slow. We never recovered. It is a myth that local auction site Taobao won because they don’t charge fees. We lost because headquarters tried to implement what worked in the US, from interface design to customer service help," the executive said. Source: http://www.cnbc.com/id/46009614
In a similar manner, it is important to note that being a part of the right industry is a predictor of future success in the global markets. If there is increase demand from the world's population in a particular service venturing into that market would be feasible risk. For instance, companies that are driving my advances in communication technologies would benefit the best from such globalization efforts.
Along with this, branding of the company has to be consistent in the gobal market. For instance, in the carbon drink industry, Coke and Pepsi are the main players in the market, thus, their globalization strategy relays mostly on their brand. Helpful link here: http://www.saylor.org/site/wp-content/uploads/2013/02/BUS208-2.5.6-Globalization-and-The-Coca-Cola-Company-FINAL.pdf
No matter what country that these companies become a part of, they will also benefit from their brand. Such an approach would be helpful in determining the success of Lincoln Electric in the India market. Will this increase profits when the current sales in India are 3% Does Lincoln Electric have enough brand recognition that they can become a major contributor in the Asia market?