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Strategy

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Strategy; this is the plan of action laid down in order to achieve certain goals. Strategy is concerned with how different activities are linked. There are different strategies in the market that are used to compete globally (Henderson 34). They include;

  1. Multi-domestic strategy;

In this strategy products for each market are customized, there is local decision making that is, there is decentralized control and it is very effective when a large difference exists between countries (Chaffee 13).It is advantageous in that there is product differentiation, minimized political risk, minimal exchange risk and local responsiveness.

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  1. Global strategy;

Products are similar in all the countries, there is centralized that is, there is little decision making on the local level, it is more effective when differences between countries are small. Its advantage is that it has coordinated activities, faster product development.

  1. Global cost structure analysis;

In 1986, Whirlpool Corporation was taking into consideration expanding into Europe by acquiring Philips' Major Domestic Appliance Division. From the framework of customers, osts, competitors, and government, there were several pros and cons to this proposed strategy.

 Pros

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  • Internal components of the appliances could be the same, offering economies of scale.
  • The cost to customize the outer structure of the appliances was relatively low.
  • The appliance industry was mature with low growth. The acquisition would offer an avenue to continue growing.

Cons

  • Fragmented distribution network in Europe.
  • Different consumer needs and preferences. For example, in Europe refrigerators tend to be smaller than in the U.S., have only one outside door, and have standard sizes so they can be built into the kitchen cabinet (Boot 77). In Japan, refrigerators tend to have several doors in order to keep different compartments at different temperatures and to isolate odors. Also, because houses are smaller in Japan, consumers desire quieter appliances.
  • Whirlpool already was the dominant player in a fragmented industry. 

Philips is an example of a company that followed the multi domestic strategy. This resulted to innovation of local R&D, spirit of entrepreneurship, products that were tailored to individual countries and of quality becauuse of backward integration.

Philips was also faced with a number of challenges in that there was duplication across countries due to tailored products, the innovation of R&D resulted to products that ere R&D driven instead of being market driven and the decentralized control meant that national buy in was required before introducing a product hence time to market was slow.

Matsushita followed the global strategy (Henderson 54). It resulted in financial control, more applied R&D, company wide mission statement that was followed closely, strong global distribution network and ability to get market quickly and force standards since individual country buy in was not necessary (Chaffee 33).

The company faced a number of challenges which were loss of non Asian employees because of glass ceilings, too much dependency on one product and the problem of strong yen.

Business ethics are also corporate ethics is a form of professional ethics that examines ethical principle that examine principles that arise in a business environment. It applies all aspects of conduct in a business (Chaffee 43). The conduct of the workers and that of the whole organization is also included in the ethics. There are several ethical issues in business which include.

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