Questions and sample answers on globalization of firms

Explain U-model as a theory of globalization of firms

According to Hindle and Klyver (2011), this model is referred to as Uppsala framework whose origin is attributed to the Johanson and Vahine. This theory supposes that a company slowly expands its global operations in steps by firstly beginning small and at a relatively low risk, developing experience with time to tackle global market roles (Kuivalainen, Sundqvist, Saarenketo and McNaughton, 2012). However, this theory has a lot of defects due to its incapability to precisely project the globalisation strategy of several companies (Cerrato and Piva, 2012). Several firms enter the global market at their preliminary stages of…

Discuss the I-Model theory for entering global markets

This theory was developed by Cavusgil(1980) as indicated in Cerrato and Piva (2012). I-model utilises the export/sales company ratio. This ratio explains the reliance of firm on the global market as Hindle and Klyver (2011) holds. In most cases, the I-model is regarded as better than U-model since it encourages explicit formulation because of the quantitative data summed up in the export to sales ratio.  However, this theory assumes that the company has already gone global which is contrary to Webhair situation. For this reason, this research discredits the….

Discuss how network theory is applied in globalization

The researchers established that application of network theory to globalisation offers a more comprehensive explanation of the study subjects in comparison to stage theory (Kuivalainen et al., 2012). In particular, network theory suggests that companies utilise their global networks in terms of suppliers, distributors as well as strategic alliances among others to emerge successful in their globalisation process. This tallies with Cavusgil, Knight, Riesenberger,  Rammal and Rose (2014)  perspective as pointed out earlier where firms can increase their probability to achieve success in the international market using strategic alliances with their more established counterparts, believed to….

Identify and explain the factors involved in globalization of firms

Wales, Gupta and Mousa (2011) proposed that firms in most cases are faced with resource limitations and a myriad of challenges in competing successfully with other international firms. On the contrary, Frambach et al.(2012) argued that firms are entrepreneurial, flexible as well as driven by innovations on the product they offer to the market alongside their capacity to grow, therefore the challenges are not material to stifle their prosperity in the global market. To increase the firms’ competitive advantage in the global market, Cavusgil, Knight, Riesenberger, Rammal and Rose (2014) pinpointed that the newly established small firms can merge with large and fairly performing firms. In this case, the smaller firms can undertake the task of….

Discus how entrepreneurs have used technology for value creation to achieve globalization

As Brush, Edelman and Manolova (2015) noted, in the recent past, fast technological change has increased the rate at which new technology is incorporated in firms’ activities and the overall global society. In the business sector, it is believed that firms have to employ advanced technology in their practices to increase their chances value in the market (Abebe, 2014). In a research carried out on 34 firms, Karagozoglu and Lindell(1998) established that new and small firms dealing with technology were entrepreneurial in their globalisation strategy. In other words, these firms were opportunistic as opposed to being passive as well as reactive to tensions elicited by stiff competition. In another study entailing globalisation, Bürgel (2012) established that the majority of the firms that belonged to….

How has the internet influenced globalization of firms?

According to Hutton and Fosdick (2011), reduction in global communication costs as well as growing importance of the communication systems have spectacularly boosted the motives of firms going global. The internet enables investors to enter new markets, carry out new market research as well as enhance global promotion (Hankin, 2016). The network hypothesis depends on the ability to converse with those engaged in the network. Particularly, the internet enhances communication using e-mail, instantaneous messaging, and use of web sites as well as videoconferencing. In addition, through online advertisement, firms can….

How does taking part in CSR contribute to its value creation in pursuing globalization?

In business sector, corporate social responsibility is an activity that involves participation of management in activities that are voluntary in nature whose aim is to serve the interest of the society (Green & Peloza 2011). According to Servaes and Tamayo (2013) CSR recognises the fact that it is the responsibility of the firm to take care of the environment in which it operates in. To this end, firms participate in CSR through provision of scholarships, job opportunities and basic social amenities like clean water among others. In doing this, firms empower the society which in turn promote market for their products. On the other hand, Orlitzky, Siegel and Waldman (2011) contend that the society feel part of the company and commit itself in promoting such firms by consuming their products. For this reason, firms can increase their value through….

Discuss firm value creation in terms of product differentiation, affordability and good brand name and how they all contribute to globalization

Firms can increase their value creation through differentiating their products, building a good brand name and charging lower prices in the market place as noted by Brück, Naudé and Verwimp (2013). High-quality products can be used as bait to address value creation issues issues. High-quality production is related to differentiation which involves offering to the market commodities and services that are dissimilar to the existing products in the market. Peng, Lee and Hong (2014) added that the best way to differentiate products is to make them different in terms of characteristics, performance as well as aesthetics. In implementing this, there is a high likelihood that the new firms would fill the niche that exists in the market. Also, the new firms would evade the price wars through venturing in similar line of products as the most established companies. Kuivalainen et al.(2012) proposed that firms find comfort in…

Discuss the process of strategy development in globalization of a firm

In the process of globalisation strategies development, seeking reliable information from multinational corporations and attending global conferences is an important step towards formulating the most effective strategy (Bass & Dalal-Clayton 2011). From the information gathered, an entrepreneur can evaluate the suitability of the strategies employed in the case in point. On the basis of evaluation outcome, the entrepreneur can make a decision of whether to adopt the strategy or not. In any case strategies under consideration proves irrelevant, an entrepreneur can discard them and focus on…

What is the importance of developing a strategy for globalization to a firm?

Hankin (2016) claimed that in particular unpredictable and critical environments, it is essential that managers develop a bias on strategy formulation to tackle the associated issues. Going global can in fact be viewed as being the environment referred in this case. Baffour Awuah and Amal (2011) pinpoint that going global needs more of an effective market strategy in comparison to others. Arguably, there is a wealth of evidence to substantiate this claim. Based on the study conducted by Knight (2000), the findings from examination of 268 questionnaires on the appropriateness of marketing strategy as far as globalisation is concerned among new firms, it was established that market leadership promotes increased globalisation. In particular, the success towards going global by firms can be facilitated through….

Discuss how entrepreneur enterprises can engage customers in the global markets

Karlan and Valdivia (2011) identify a number of ways in which entrepreneurs can engage with their both potential and existing customers in global market. Customers’ engagement is vital in business as it contributes to customer loyalty which in turn increases customer retention as postulated by Vivek, Beatty & Morgan (2012). To this end, Karlan and Valdivia (2011) propose that entrepreneurs can engage with their customers through product promotions, use of well-known local consultants and firms to assist, through engaging with the…

Describe the competitive patterns or strategies firms should adopt when going global

Going global offers much incentive to firms. Therefore, firms should always focus their attention on globalisation. Kuivalainen, Saarenketo and Puumalainen (2012) provided the competitive aspects those small firms should use to increase their competitive advantage in realising the dream of going global. This includes; competitive pricing, engaging in the production of highly diversified products, incorporating effective and unique technology in firms’ operations and production of top quality goods or services in the market. Notably, Christensen and Raynor (2013) considered the application of new technology and offering high-quality products in the market would be….

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