A plan without a viable strategy is like a bicycle without wheels. It may look pretty and shiny, but it certainly won’t go anywhere.
Same holds true for businesses that want to enter into the international market or expand their international efforts. Heading out into the global marketplace isn’t for the faint of heart, so success relies heavily on knowing the market and approaching it with the right strategy.
In short, a global strategy is an organization’s plan that details how it will achieve targeted growth and compete on a global scale.
Get it right and you’re cruising into new markets with confidence. Fail at the strategizing stage and you’re dead in the water. No pressure, right?
Developing a Global Strategy
A company’s global strategy should be carefully crafted to include actions at every stage of their expansion efforts. What does each stage look like? How will you get there? What talent, resources, time, and effort are required to reach your goals? How will you grow your sales, profits, and earnings to achieve your expansion targets?
Global strategy, of course, looks different from one company to the next. While this term is used broadly to describe the process of pursuing foreign markets and expanding internationally, a company’s global strategy is always focused on expanding in one of the following ways:
International companies export to and sell product to foreign markets. However, international companies don’t operate outside of the country, meaning that they don’t have any investments, offices, branches, or factories operating globally. For international companies, the region of origin is usually what makes the product unique. Consider wine, for example, from a specific region. A Napa Valley winery may sell to foreign markets, but all business operations would remain at home.
Multinational companies, unlike their international counterparts, invest in the foreign markets they want to enter. In other words, they set up shop internationally and have teams, offices, operations, and holdings in other countries. By doing so, they have more control over labor, supply, and regulatory issues.
A good example of a multinational company is Amazon, which operates in no less than 58 countries around the world. Their products and brand identity are the same across the world, reaching an estimated one billion people every day.
Like multinational companies, transnational companies operate in different countries by coordinating local subsidiaries with their main business operations. However, unlike multinational companies, transnational companies make decisions on a regional/local level for each foreign market.
Instead of standardizing goods or services, they focus much of their efforts on producing for local markets and adapting their products or services to the foreign markets in which they operate.
Take Dunkin’ Donuts, for example. This transnational company operates more than 3,000 stores in 36 countries around the world. But its offerings differ significantly based on cultures and regional tastes. In America, you may find Boston Crème and pink frosted donuts, while China-based Dunkin’ Donuts sell dried pork and seaweed donuts (really).
Same goes for McDonalds, who have mastered in the art of the regional menu. Head to France and you’ll find macaroons on the menu, while those in the Philippines dine on Mcspaghetti!
Breaking Down the Elements of a Global Strategy
A global strategy should detail how a company will be able to fill a need in the international market and its growth strategy for getting there. How will you build your business to accommodate this overseas market? How will you build market share and brand awareness on an international scale?
Any solid global strategy details both business and marketing strategies:
Global Business Strategy
Consider a global business strategy as a company’s organizational master plan. This strategy focuses on the entire organization and is used by management as an operating guide. All decisions made by business leaders will support the global business strategy.
Some of the considerations covered in the business strategy include:
A global business strategy is best organized by considering the following:
Corporate strategy details the company’s vision, mission, and values. This strategy defines how the business wants to be viewed, the purpose it intends to fill, and the core values it intends to operate under. This strategy defines the organization’s internal environment and trickles down to keep everyone working toward the same goals, under the same principles, and aligning with the same values.
Competitive strategy details how the company will gain a competitive edge in the foreign market. This plan defines how the business will compete and gain market share using sustainable measures. For example, simply cutting profit margins is only a temporary measure and not a sustainable plan for long-term success. The competitive strategy include steps that focus on dominant market share, profitability, and sustainability on a global platform.
Operating strategy focuses on areas like talent acquisition, human resource management, and productivity. It focuses heavily on the day-to-day operations of the business.
Global Marketing Strategy
A global marketing strategy is the blueprint of how a business will look in the international market. A comprehensive global marketing strategy details how the company has established their brand domestically and how they’ll establish their brand abroad. It considers how they’ll adapt their current marketing strategies while still staying true to their brand.
A global marketing strategy therefore focuses on either standardization or localization— how/if the company will adapt its marketing efforts to meet the needs of the foreign market:
Using a consistent brand strategy in foreign markets to maintain uniformity across markets and preserve the brand experience. A good example of standardization is Coca-Cola. Their red and white label and iconic logo remain consistent whether you’re in Mumbai or Iceland, and its 2021 marketing campaign, “Real Magic,” was used throughout the world to emphasize a shared sense of humanity.
Adapting a brand strategy to accommodate different cultural norms. A good example of localization is Oatly, a popular plant-based milk drink that switched up their marketing strategy to accommodate the Chinese market. Their marketing research found that the vast majority of consumers in China didn’t associate plant-based milks with the word “milk” and most wanted more information and education on plant-based milks, including their benefits. Oatly provided educational materials that nurtured interest in the plant-based industry and even created an entirely new Chinese character to describe “the new milk” as part of their marketing strategy.