Global Impact of Crises
SUMMARY
The global impact of the crisis has begun to shape several new aspects of business today,especially the management of international organizations. The article argues that international firms must begin to take a looser approach to global strategy and organization.The diversity must be increased at all the levels of management while maintaining the key goals and values in the corporate culture .The article discusses about the effects of the 2008 crisis and also how it has impacted a companys basic strategic environment. The author speaks about a typical strategy wheel that outlines the steps that a firm should consider for reshaping their business to achieve utmost success.
Strategy and Competition
The global strategy for most firms till now has been blurring the national boundaries and achieving high economies of scale. However, this approach is no longer “the trick” after the crisis of 2008. Companies now need to realize the importance of local resources and there has to be lesser dependence on foreign direct investment in order to create returns. After the 2008 crash, the demand will remain weak which would clearly imply lowering of prices even for the customized goods. The idea is that, where the organizational power at local level will grow, there has to be diverse set of workforce that has to be managed in order to develop a strong corporate identity.
Markets and Products
International firms will need to focus on three main changes in customers and products:
Modification customer targeting away from urban elite only to include more geographies, channels and income levels.
Repositioning will be vital because of pricing pressures that are predicted only to intensify.
They need to develop products and services that are better suitable for the various geographic locations where they are being sold.