EXECUTIVE SUMMARY
The purpose of this report is to evaluate the process of the strategic management in the
global competitive environment.
The globalization of the business in our environment has been a source for global
organizations to incorporate the process of a global strategic management.
In this report, we are going to propose three different frameworks from three different
group of authors: Yip, Johnson and Scholes, and Cavusgil and Zou.
However, theses proposed framework would be analysed and compared and we would
give a critical evaluation of theses frameworks.
Through this evaluation we would give some examples about relevant companies in order
to explain the theories, and how does the competitive environment affect managers in their
strategies.
INTRODUCTION
In our actual world economy, characterised with a high level of changes over the past few
years, we can say that the world does not appear anymore like it was in the past.
Indeed so many transformations have been done in terms of government regulations,
business, telecommunications, technology, research and development, customers needs
and tastes, reduction in barriers to free trade and the world with all theses factors have seen
a great convergence.
All theses transformations are leading our national economies into a global system or a
global economy, i.e. an independent, integrated global economic system, ( Hill, 2006),
therefore a process that we can refer to as globalization.
Hence, in the era of the globalization, it has been inevitable for national enterprises to
globalize in order to gain for instance some competitive advantage, economies of scales,
more market shares, better skills.
Indeed, nowadays, wherever a company operates, theses products or services would find
some foreign competitors.
Therefore, in order to compete with foreign companies, theses companies need to develop
a global strategy in order to manage their business the most efficiently.
But what exactly do we mean by global strategy? Or strategic management? And how
companies should develop their strategy?
That is why the aim of this report is to give an overall response to the process of the
strategy.
So, after providing a brief overview of strategy context, we are going to analyze and
compare some relevant frameworks.
Thus, in the one hand, we are going to analyze the Johnson and Scholess framework.
On the second hand we are going to analyze the Yips framework in association wwith the
Porters framework.
And as a final point, after comparing theses frameworks the last part depicts some critical
analysis and recommendations.
I. AN INTRODUCTION TO STRATEGY
The aim of this part is to define the different characteristics of strategic decisions and what
do we mean by strategic management and strategy and to analyse why strategies are
diverse and vary.
1. Definition of strategy
As we can suppose the term of strategy is very complex and presents different aspects in
the literature.
According to Johnson and Scholes strategy is the direction and scope of an organisation
over the long term, which achieves advantage in a changing environment through its
configuration of resources and competences with the aim of fulfilling stakeholder
expectations, (2008).
Thus, according to this first definition, the term strategy there focus on the long term
direction of an organisation
Consequently, when we think about global strategy, it deals with:
1 To produce the same country everywhere in the world
2 Cost reduction in the production
3 Product development
4 on the local level, the decision making progress could be limited
2. Definition of global strategy
Hence, as we noticed previously in the era of the globalization we can refer to the global
strategy context.
Hence, according to Yip, a strategy is global to the extent that it is integrated across
countries. Global strategy should not be equated with any one element- standardized
products or worldwide market coverage or a global manufacturing network. Global
strategy should instead, be a flexible combination of many elements.
Furthermore a distinction between global strategy and multilocal strategy need to be done.
Indeed, as we can suppose a multilocal strategy differs from a global strategy.
The same author, Yip, defines a multilocal strategy treating competition in each country or
region on a stand-alone basis, while global strategy takes an integrated approach across
countries and regions.
To resume, a global strategy could be defined as the way a business competes in a global
market, plays a vital role in determining the performance of a business in the global
market, ( Zou and Cavusgil, 1995).
Define global strategy is seen as a difficult task because our environment is in permanent
change and companies need to these changes the most efficiently possible.
3. Definition of Strategic Management
Initially, Strategic management would involve the degree of implication of people, and
especially managers in order to define, decide and execute a strategy.
so as, Johnson and Scholes, can underlines the term strategic management engross the
importance of managers with regard to strategy, (2008).
And they suppose, strategic management differs from operational management.
Indeed, operational management requires to deal with issues arising in the operational
control, all the operations like the production, the management, the financial performance.
Thus operational control is what managers are involved in most of their time. It is a source
to the success of the strategy but, it does not correspond to the same objective of strategic
management.
In more specific terms strategic management, includes understanding the strategic position
of an organisation, making strategic choices for the future and managing strategy in action,
(Johnson and Scholes, 2008).
Nonetheless, we are not going to describe more this relevant section because it would take
part on the second part of the report, i.e. in the comparison of the different framework
defining the global strategy and strategic management.
Indeed on the one hand we are going to explore one relevant framework from Gerry
