Summarise the Global-Local dilemma

Assignment Brief

Implementing Strategy & Change

2018/9

Level 6

Module aims

The module aims to look at the way strategy and change is implemented in a variety of organisations and contexts. As organisations develop they change to meet the needs of their altered environment. Organisations make strategic choices the choices they make will affect the direction the organisation will take. This module helps students to gain an understanding of the strategic decisions that organisations make and their implications.

Module Learning Outcomes

1. Evaluate the key competitive strategies and strategic options/methods open to organisations using a range of strategic choice frameworks and based on effective analysis make proposals for preferred options.
2. Analyse the factors that are required for an organisation to achieve effective strategic implementation, considering the risks and challenges.
3. Compare and critically challenge the paradigms taught within the sphere of strategic
4. Management using traditional and current strategic articles / texts / concepts.

General guidance to students on content and approach

The word limit is 2,000 words (plus or minus ten percent), including any appendix but excluding your table of references.  You should indicate the number of words in your assignment on the cover.   NOTE: The ability to communicate a cogent and coherent argument in a limited number of words is an academic skill required of students at level 6. Therefore anything you write beyond 2200 words will not be read.

Late submission of course work will be dealt with under standard University regulations, which are available through the student portal.

Please ensure all sources and frameworks are referenced within your assignment. APE module will help you answer this question.

Indicate Content.

• Defines the Global-Local Dilemma

• Introduces a range of external and market factors into the debate,

• Look at global drivers and local needs and advantages. Examples would be good.

• Pro`s and Con`s of different market entry strategies evaluated in relation to strategy and context. Examples would be good.

Sample Answer

Understanding the Global-Local Dilemma and Evaluating Entry Strategy Risks and Rewards

Introduction

As businesses increasingly expand beyond national borders, they are faced with the complex challenge of balancing global integration with local responsiveness. This is known as the Global-Local dilemma. While globalisation offers opportunities for economies of scale and market expansion, local responsiveness requires businesses to adapt products, services, and operations to meet the specific needs and preferences of local markets. In this essay, the Global-Local dilemma will be defined and analysed, followed by an evaluation of various international market entry strategies and the potential risks and rewards associated with each.

The Global-Local Dilemma

The Global-Local dilemma refers to the strategic decision organisations must make between standardising operations across international markets (global strategy) or adapting to the unique conditions of each market (local strategy). A global approach allows for consistency, brand integrity, and cost reduction, whereas a local approach can enhance customer satisfaction and competitiveness by aligning more closely with local cultures, regulations, and expectations.

Companies such as McDonald’s and Unilever exemplify this balance. McDonald’s, for instance, maintains a globally consistent brand while customising menus to suit local tastes. Unilever allows for considerable autonomy in its local units to respond effectively to regional differences.

Global Drivers vs Local Needs

To determine the extent of global integration or local adaptation required, companies often assess the following global drivers:

1. Market Drivers: Homogeneous customer needs, global customers, transferable marketing.

2. Cost Drivers: Economies of scale, sourcing efficiencies, learning curve effects.

3. Competitive Drivers: Global competitors, interdependent countries.

4. Government Drivers: Trade policies, regulations, local content laws.

Simultaneously, local needs such as cultural preferences, legal environments, economic conditions, and language differences must also be evaluated. For instance, while tech companies might standardise software products globally, fashion brands may need to adjust styles and sizing based on regional consumer behaviour.

Market Entry Strategies: Risks and Rewards

When entering new international markets, organisations can choose from a variety of entry strategies. Each strategy has unique risks and benefits depending on the company’s resources, objectives, and the nature of the target market.

1. Exporting

   Definition: Selling products produced in the home country to foreign markets.

   Rewards:

   • Low investment and risk.

   • Easier market testing and scale-up.

   • Retain control over production quality.

   Risks:

   • High transportation costs.

   • Trade barriers and tariffs.

   • Limited local responsiveness.

   Example: Many SMEs begin their internationalisation through exporting before committing more resources.

2. Licensing and Franchising

   Definition: Allowing a foreign firm to produce or sell the company’s products under agreed terms.

   Rewards:

   • Low investment and faster market entry.

   • Income from royalties or franchise fees.

   • Limited risk of asset loss.

   Risks:

   • Loss of control over brand and operations.

   • Potential for lower quality.

   • Risk of creating a future competitor.

   Example: McDonald’s uses franchising globally to grow its presence while ensuring some level of consistency.

3. Joint Ventures and Strategic Alliances

   Definition: Partnering with a local firm to share resources and risks.

   Rewards:

   • Access to local market knowledge.

   • Shared investment and risk.

   • Easier navigation of legal and cultural barriers.

   Risks:

   • Potential conflict with partners.

   • Divided control and decision-making.

   • Difficulties in aligning strategic goals.

   Example: Starbucks initially entered China through a joint venture with a local firm to adapt its offerings and understand local consumer behaviour.

Continued...