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Does the increasingly global nature or business mean that all organisations need to change their strategies significantly to achieve higher profits?

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Introduction

Exam Question June 2011: The business world is becoming increasingly global. As a result of this, many companies, such as Costa Coffee and Dyson, have changed their strategies in relation to the markets they target or where they produce. Does the increasingly global nature or business mean that all organisations need to change their strategies significantly to achieve higher profits? Justify your answer with reference to Costa Coffee, Dyson and/or other organisations that you know. (40 marks) The world is becoming a smaller place due to globalisation. It has helped communication around the world making everyone more connective. Companies all of a sudden have access to different countries and have more potential to grow and expand as developing countries have recently under gone rapid growth and industrialization causing new emerging market businesses can enter. This has put pressure on Weston business to expand into theses new regains because if they don't expand they would not be able to compete with competitors increase in expansion and corporate power. ...read more.

Middle

However, their overall underlying profit rose by 41.8% to �27.8m showing potential for higher profits in the coming year. In addition, due to the whole global nature of the business this means that the four Ps (Product, Price, Place and Promotion) will have to change to help create a more appropriate strategy to help achieve higher profits. Product: Gap has primarily kept their products the same however a new designer called, Patrick Robinson was brought in to help define a more fashionable image for the all American brand. This strategy did not work in America as Gap could not compete with specialist brands Like Abercrombie and Fitch. Nonetheless, other countries found the tradition preppy American style more exciting and different. This show that a business strategies doesn't need to significantly change to be successful. Price: A business like Dyson that uses a skimming pricing strategy to maximise profits from the early-adopters would have to change their strategy in emerging market as these countries would not be able to afford such a luxury. ...read more.

Conclusion

They also use celebratory endorsement to advertise in the country they are best known in. For example, in America Beyonce is the face of L'Oreal however in the UK Cheryl Cole is. These little changes to their strategies can have a huge impact on sale and profit. In conclusion, I believe that the increasingly global nature of business means that some strategies will need to significantly change whereas some could be only slight altered. For example, Gap ansoft matrix strategy only involved marketing their product to a new audience yet they have to significantly change the marketing strategy to make themselves appear as a more fashionable brand. However, I think a business should constantly be changing and reanalysing their strategies anyway as even if a business does not operate globally or plans on expanding as, external factors will always affect a business (e.g. competition, economy and government laws). Companies therefore, needs adapt their strategies accordingly in order not to miss out on any opportunities (e.g. competitor close down) or ignore potential treats (e.g. sudden change in consumer taste). ...read more.

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