The essay is based on an episode of international development of an organization, outlining the international expansion for a given period and the ways in which the workers responded to the motivational approached applied in the company. The chosen company is Apple Inc, which specializes in manufacturing and selling electronics, particularly mobile phones. The essay discusses the specific motivations, which prompted the company to initiate international expansion. It also gives a detailed explanation of the primary strategies, which the company applies in order to succeed in its international expansion.
Motivations for International Expansion
Many attempts to enhance international expansion of an organization depend on the motivation criteria that the company applies in raising the workers’ morale (Nohria, Joyce & Roberson, 2003). Sometimes, the company used financial motivators, while in other cases they use non-monetary forms. For example, increasing the employees’ wages and salaries was the first motivation initiative that the company applied for international expansion strategy (Agarwal & Helfat, 2009). Secondly, the company adopted the new trend of information technology in doing international business transactions, thus improving the efficiency and effectiveness of the service delivery (Dobson, Starkey & Richards, 2004). Third, the company invested heavily on mechanization to make sure that the final products are of high quality that would meet the consumer demands across the globe (Bartlett & Beamish, 2011). The factor really motivated the company to open its branches in other parts of the world.
Strategies that the Organization is Pursuing
The management strategies and decisions on handling the cases of market globalization are very critical in pursuing success. Precisely, the organization has to make choice(s) after carefully examining the internal and external factors, which the management assumes to have significant influence on the business (Agarwal & Helfat, 2009). The extent to which the management understands and harmonizes the interplay between internal and external factors in the organization influences the globalization strategy that they would adopt (Dobson, Starkey & Richards, 2004). In addition, for the organization to compete internationally, there are specific strategies that the management applies during the pursuit. Particularly, the internal factors have a crucial role in establishing the best way, in which the company would carry out their global strategy (Nohria, Joyce & Roberson, 2003). For example, with increased competition and market globalization, it is only through strategic planning and following the plans systematically that might keep the business in the world market (Nonaka, 1991).
Despite the various business challenges, which the organizations fact, they have to make sure that they develop strategies that are more global than their competitors. Some of the globalization strategies, which the organization developed, include expansion to other regions or entering the key markets, standardization or improving on the quality and quantity of the products, Value addition, adopting a market mix and market positioning, and integrating cross-country competitive strategies (Bartlett & Beamish, 2011).
Expansion of the key Global Markets
In business, it is of great importance to formulate and adopt expansion strategies, so that the organization can command a larger market for the volumes of products (Bartlett & Ghoshal, 1998). Concerning the rationale for using the strategy, expansion is important especially when the primary market is already saturated and that, not many people could continue to purchase the goods. At such time, the organization reorganized its intended markets by exploring new opportunities in other countries (Dobson, Starkey & Richards, 2004).
Through expansion of the key global markets, the organization becomes able to learn the business environment in these countries, thereby able to shift their market strategy to suit the status in the country (Nonaka, 1991). The expansion strategy that the business adopted could make it gain a competitive edge between the two, or among the countries of operation, thus enhancing growth and integration (O’Reilly, Harreld & Tushman, 2009).
The company concentrated on activities aimed at adding value to their products in some countries, as a fundamental strategy in enhancing the quality. Value addition is very important in commercial development because the manufactured goods attract higher prices than the semi-processed or raw ones (Dobson, Starkey & Richards, 2004).
The rationale for using this strategy is that, it enables the organization to gain from the high volume of trade resulting from customer preference. In addition, there would be leveraged on the skills and the country’s strength. Important of all, areas with people exhibiting high skills and relatively low wages for the workforce is more attractive to value addition, because this would make the products more competitive in the market (O’Reilly, Harreld & Tushman, 2009).
Adoption of Marketing Mix and Market Positioning
In most business operations, carrying out an analysis of the marketing mix and establishing the market positioning of the company is very significant (Hamel, 2009). This helps in determining the marketing program and strategy that the organization should develop and adopt (Hamel & Valikangas, 2003). Despite the assumed scarcity of good ideas, a uniform, systematic and strategic approach could enable the organization to explore the available ideas of different people in various countries of operation. This would help in making the organization to focus on the best ideology that could propel the country to greater heights of development.
The justification for this strategy is that it increases internal focus on the company in developing a brand that would sell across many countries. This is achievable after trying numerous brands placed and marketing different positions to establish the best place for a particular brand (Dobson, Starkey & Richards, 2004). This marketing strategy is suitable for both single and multiple products.
Integrating Cross-Country Competitive Strategies
This was another important strategy that the organization used so that it could be very competitive in the global market. In this regard, the company could not rely on decisions, which limit it to a particular country, but on the ones that explore other alternatives in other regions globally (Dobson, Starkey & Richards, 2004). This approach enabled the organization to explore the business activities and the environment in other countries so as to take an active role in enhancing competition (Ireland & Hitt, 2005). Due to increased global competition, many companies have adopted business strategies, which are intended to make it command the largest market share so that it could maximize the gain (Peters & Waterman, 1982).
Commanding the largest market is the major aim of a business venture. Therefore, since businesses have gone global, it proved unreliable for the organization to operate within the boarders of a single country, thus its attempt to integrate the business operations in other countries (Dobson, Starkey & Richards, 2004). Using such initiative, the organization is able to establish the most viable place for conducting business, an environment that would increase the profit margin. The organization also realized that operating in a global perception makes it understand that the world is a single business battlefield where investors scramble for the available opportunities.
The justification of this approach is that, integrating the competitive business strategy makes the company to minimize the risks through adopting cross-subsidy (Ireland & Hitt, 2005). Here, cross-subsidy is a business concept that involves using the generated income from a high market share country, and all the profits to venture aggressively in a country of low market share, but strategically positioned. In business, the strategy aims at increasing the world presence and optimizing result that the organization intends to make all its global ventures (Kirby, 2005).
The Organizational Challenges of Expanding Internationally
During this period, some of the challenges, which the organization faced while expanding internationally include undifferentiated marketing strategy, low quality products, internal management conflict, external interference, and change among others (Kirby, 2005).
Undifferentiated Marketing Strategy
Evidently, the company for a long time has practiced the undifferentiated marketing strategy in promoting its business operations (Kotter, 2007). Therefore, it has been unable to reach the global market in the most desirable way. The company has concentrated in the local market, thereby limiting it from the potential global market. This means that the company has found it difficult to identify its primary targeted clients and could not classify the customers according to their economic, social and psychological needs (Gavetti, 2011).
Low Quality Products
Prior to the mechanization, the company produced goods of low quality that could not be attractive to the international market. The low quality of the products has significantly reduced the sales volume and profitability of the company, thus delaying its expansion strategies. The company faced numerous problems with the clients who occasionally complained of the substandard products it manufactured, thereby necessitated prompt action for improvement (Kotter, 2007).
Internal Management Conflict
Internal management conflict is unavoidable, and was one of the challenges that the company faced during its operation (Mintzberg et al., 2003). The company experienced various management wrangle, which threatened the business continuity. The management could not agree on the basic principles of business operations including sales promotions, employees’ promotions, workers’ motivation procurement channels to be used and the suppliers to be contracted (Mintzberg et al., 2003).
The organization experienced some levels of external interference from various influential personalities and the government. This really affected the business operations and prompted the company to alter the administrative system to include the employees who could execute the duties according to the outlined procedure (Pettigrew & Whipp, 1991). The external influence was as a result of personal interest that certain people had in the company (Gavetti, 2011).
In this case, changing from the traditional system of management to the one that was information technology based proved to be a very great challenge to the company (Balogun, 2006, p. 32). There were many workers who initially resisted the changes, which the management tried to implement. The company had to put administrative systems and policy frameworks, which could facilitate the desirable changes (Balogun, 2006).
Addressing the Challenges
The extent to which the organization addressed the challenges determines its level of success. In essence, the business world is increasingly becoming turbulent, thus proves to be a challenge to the managers (Ghemawat, 2001). Therefore, some of the ways in which the organization addresses the challenges include integrating the operations, learning transfers, administrative structures, using information technology and resource deployment (Ghemawat, 2005).
This was one of the ways that the company used in addressing the expansion challenges. For example, as the company expanded its operations in the global market, it had to move beyond the country-centered plans and systems (Ghemawat, 2005). This increased the need to integrate the new branches to embrace the global diversity trend it had taken.
Notably, operating the units in other countries as independent entities would be difficult, thus prompting the need to integrate them and develop a centralized system that outlines the manner in which the branches have to operate (Crossan, Vera & Nanjad, 2008). This intervention would increase the management and operation efficiency. The company was able to exploit the local market in the various countries of operation and realized high sales turnover.
Integration is a sure way of addressing the complexity of the organization that resulted from its bid to promote diversity (Montgomery, 2008). The organization became able to tap the people’s potential for its sustainability (Ghemawat & Hout, 2008).
In reality, learning transfers are perhaps the widely practiced means of addressing challenges that affect the business (Montgomery, 2008). It is through learning the trends in the international market and business activities that could enable the organization to minimize the effects, which arise from the changing developments. As a result, earning enables the business leaders to leverage the potential competencies in the global market, thereby being capable of capturing a sizeable market share (Porter, 1998). Once established, the company was able to learn the preferences and tastes of the local people, then developed the products, which could attract the domestic market in the region and address the challenge of quality (Ghemawat & Hout, 2008).
The leadership structure that the company employs determines its ability to manage change and remain competitive in the market. As a result of global competition pressure, the managed realized the need to formulate strategies that would make sure that the management remains focused and carefully able to analyze the market trend and be able to recommend for the appropriate course of action (Crossan, Vera & Nanjad, 2008). For this reason, the company recruited a lean, knowledgeable and experienced staff to execute the business operations. Through this practice, the company managed to gain a competitive edge over its business rivals in the market (Hamel, 2009). Furthermore, the skilled workers were able to leverage the activities, determine the approaches to be applied and make important decisions after strategic thinking (Bartlett & Ghoshal, 1992). As a result, the management was able to alter the business operations to suit the market trends, thereby being able to maximize profits (Beer & Nohria, 2000).
Using Information Technology
As the world market tends incline towards information technology based, the company decided to transform the business operation to be inclined towards the new communication techniques (Beer & Nohria, 2000). In this case, the company started transforming its business operations to adopt the technological changes, which would enhance efficiency. Apparently, the new information system enabled the company to address the problems resulting from the new competitive business landscape created by adopting technology, which is considered as an emerging trend in competition (Watkins, 2009).
Appropriate use of the company resources is a way of addressing the organizational challenges. Mostly, the industrial activities should be carried out in a way that takes care of the environment (Collins & Porras, 1994). In this context, resource development involves proper product packaging, recycling of the waste materials and using the available materials in a prudent manner. The intervention increases efficiency in using the natural resources, taking care not to emit harmful substances into the environment (Collins & Porras, 1994).
The company did this through intensive consumer and the workers’ education on the importance of using the products prudently (Whittington et al., 1999). In addition, the product development might lead to the production of high quality goods, which have minimal effects on the physical environment.
In conclusion, since the organization would like to outdo their internalization, it has to raise its adaptation to meet the needs of the locals, while similarly using the local resources. In terms of resource and core competence utilization and development, the process of globalization proved effective in a number of ways. First, globalization improves the quality of the products through acquiring and imitating the practices of other companies. Secondly, it enabled the company to explore and exploit the prime business opportunities in other countries, which would otherwise remain idle. Third, globalization enhances the exchange of ideas and new technological advancement in different countries. This aims at improving the service delivery in the company.