Global strategy – definition and meaning
A Global Strategy is one that a company takes when it wants to compete and expand in the global market. In other words, a strategy businesses pursue when they wish to expand internationally. A global strategy refers to the plans an organization has developed to target growth beyond its borders. Specifically, it aims to increase the sales of goods or services abroad.
‘Global strategy’ is, in fact, a shortened term that covers three strategies: international, multinational, and global. Companies must pursue strategies in those three areas if they wish to expand internationally.
According to the Cambridge Dictionary, a global strategy is:
“1. A detailed plan for how a business or product can be successful in all parts of the world.”
” 2. The process of planning how a business or product can be successful around the world.”
Global strategy – some confusing terms
When reading about the international marketplace, there are many terms that people initially find confusing. For example, what is the difference between international, multinational, transnational, and global?
An international company is one that imports and exports. In other words, it sells to customers abroad and has foreign suppliers.
However, this type of company does not have any investments, i.e., branches, offices, factories outside its home country, says New Horizons Global Partners.
A multinational company, unlike an international one, has investments in other countries. It has business, staff, and premises in more than one country.
However, it does not have coordinated product offerings. A multinational company focuses more on adapting its products and services to individual local markets.
A global company has investments and is present in several countries. It markets its goods or services through the use of an identical coordinated image/brand in every market.
In most cases, there is one corporate office that is responsible for worldwide strategy. There is also a strong emphasis on cost management, efficiency, and volume.
A transnational company operates in different countries. It has investments in operations both at home and abroad. However, the directors/managers at each individual market are also the decision-makers for their regions.
Additionally, local management decides on R&D and marketing policies and strategies for their territories. R&D stands for Research and Development.
Transnational companies are significantly more complex organizations than the other three types.
Global strategy – a term we commonly misuse
Regarding how people often use the term ‘global strategy,’ Prof. Richard Lynch says the following in global-strategy.net:
“Companies talk about ‘going global’ when what they really mean is that they are moving internationally, outside their home countries.”
“It is important to clarify precisely what is meant by such wording because the strategic implications are completely different.”
Understanding the nuances of a global strategy is crucial for any business looking to optimize its operations and market presence on an international scale.
This strategic clarity is essential for aligning cross-border business activities with the overarching corporate vision and maximizing global market penetration.
The World Health Organization has a Global Strategy for Women’s, Children’s and Adolescent’s Health. It envisions a world in which every adolescent, child, and woman realizes their rights to mental and physical health and well-being. It also aims for better social and economic opportunities.
Global strategy – vocabulary and examples
There are many compound nouns containing the words “global strategy,” such as “global strategy management.” A compound nouns is a term with at least 2 words. Here are seven such compound nouns, their meanings, and how we can use them in a sentence:
Global Strategy Framework
A structured plan that outlines the approaches and methods a company will use to execute its global strategy.
Example: “The company unveiled its new Global Strategy Framework to streamline its international operations.”
Global Strategy Implementation
The process of executing the plans and initiatives identified within a global strategy.
Example: “Effective Global Strategy Implementation has allowed us to expand our reach into emerging markets.”
Global Strategy Management
The ongoing process of managing and adjusting a global strategy to meet market demands and company goals.
Example: “Our Global Strategy Management team meets quarterly to assess progress and make necessary adjustments.”
Global Strategy Development
The process of creating strategies to help a business compete successfully in international markets.
Example: “Global Strategy Development is crucial for our business to adapt to the dynamic global market.”
Global Strategy Consulting
Professional advisory services provided to businesses to help them create and implement global strategies.
Example: “We hired a Global Strategy Consulting firm to assist with our international expansion plans.”
Global Strategy Analysis
The evaluation of a company’s global strategic position to identify strengths, weaknesses, opportunities, and threats.
Example: “Our Global Strategy Analysis revealed untapped potential in several overseas markets.”
Global Strategy Coordination
The harmonization of efforts and resources across different regions to ensure the successful execution of a global strategy.
Example: “Global Strategy Coordination is essential to maintain a unified brand message across all countries.”
Three Educational Videos
These three YouTube videos come from our sister channel, Marketing Business Network. They explain what the terms “Global Strategy,” “Global Marketing,” and “Multinational” mean using easy-to-understand language and examples:
What is Global Strategy?
What is Global Marketing”
What is a Multinational?