On the basis of the analysis of various companies’ efforts to enter the international market and develop in foreign countries, it is possible to identify several essential lessons learned. First of all, the successful performance in other countries is impossible without paying attention to local customer preferences, market conditions and structures, and the competitive environment (Procter & Gamble Europe 4; Begley and Boyd 26). As a company based on strong religious and moral principles, P&G had a respectful administrative heritage with the values of employees’ talents, skills, and competences, market research for meeting consumers’ expectations, and distinct organizational structure. Entering the European market, P&G aimed to create the divisions on the basis of the same management practices and policies that were successful in the United States (Procter & Gamble Europe 4). However, the company faced considerable differences in consumers’ habits and market conditions that were individual in any country. This aspect contributed to the formation of subsidiaries in every country.
In turn, the ignorance of foreign markets’ peculiarities may lead to devastating consequences. For instance, Lincoln Electric has adopted agreeable globalization strategies to ensure that the company can compete fairly in the worldwide arena (O’Connell 18). It used the system of bonuses and incentives for subsidiary managers expecting this strategy to be efficient as it had been efficient in the United States where this system was implemented in the company’s culture (Hastings 4; O’Connell 2). However, this strategy led to failure as Lincoln Electric had not developed another aspects of successful global expansion, such as competitive delivery times, proper distribution, quality manufacturing, employees’ competence and commitment, and strong relationships with suppliers, partners, and customers. The misunderstanding of countries’ cultural peculiarities led to multiple failures of Jollybee as well (Jollybee Food Corporation 3). Appling domestic strategies and the principles of corporate culture, it failed to build relationships with foreign stakeholders that regarded them as inefficient and unacceptable.
Another important lesson learned is the necessity of the creation of organizational structure on the basis of cooperation and common goals for continuous and efficient development. In the United States, the organizational practices of P&G presupposed the absence of lateral cooperation between subsidiaries to prevent competition and well-established vertical communication with top management (Procter & Gamble Europe 4). In Europe, every subsidiary was autonomous in decision-making concerning products on the basis of countries’ preferences. While this strategy allowed to increase sales, it led to insufficient prioritization, focus, and strategic direction for centralized development (Procter & Gamble Europe 6). As a result, P&G reformatted its organizational structure in the European market – several country subsidiaries became responsible for several brands and production lines. In addition, communication between them were improved for time-sensitive and efficient interaction.
The same approach to the international expansion was adopted by ABB which administrative heritage implied the creation of teams responsible for the change process. In order to develop more than 60 business areas, ABB established steering committees for all of its local companies (ABB’s Relays Business 6). These committees aimed to facilitate the change process, articulate the company’s values and missions, and discuss long-term strategies and the ways of development considering consumers’ preferences and the local market environment.
In general, the creation of subsidiaries may be regarded as a common business practice for global expansion. At the same time, not all companies adopted the strategy of subsidiaries and decentralized management practices. Thus, Acer and Matsushima Electic preferred to concentrate their manufacturing in the countries of origin and develop global expansion through partnerships and worldwide distribution (Acer, Inc 1; Philips versus Matsushita 1). However, this strategy along with corporate cultures based on close connection between employees may create barriers in a competitive business environment.
Various business models and standard approaches were applied for the global expansion. The McKinsey company employs a similar strategy of solid goals and aims while incorporating a strong sense of using a knowledge base for its continued practices as this strategy has been successful for the corporation in the past (McKinsey & Company 4). In turn, Philips and Matsushita adapted contemporary technology breakthroughs and successfully expanded into new geographic markets is the foundation of the competition between the two companies (Philips versus Matsushita 4). Both companies had a strict corporate approach having a sharp eye for global mindset due to the huge competition in the market.
Implementing global policies across the organization’s numerous arms and divisions is the driving force behind the worldwide expansion. The entire idea of growing one’s business and gaining competitive advantages through growth highlights how vital it is for companies to conform to a universally accepted model and standard to advance in a progressive direction. They involve achieving a balance in the process activities carried out throughout the various operational sections of the business and streamlining the activities carried out by its personnel base to create a consistent corporate image.
In addition, competitive advantage is integral to ensuring a global mindset and expansion as global competition is genuinely fierce. Owing to the dynamism surrounding the various companies and organizations covered in the articles, there must be proper approaches toward competitive edge shaping. Various companies should adopt diversity by broadening their services and development programs to enhance their competitive edge.
Amazon and Google are examples of companies now active in the international environment. The discord between corporate administrative structures and strategic propositions illustrates essential issues that must be considered to ensure that operations and expansion structures are carried out without a hitch. As a piece of advice, both Amazon and Google should model their operations after successful businesses by implementing industry-standard organizational systems and business models. At each level of growth, there should be some thought about how fundamental components should develop progressively.
Works Cited
ABB’s Relays Business: Building and Managing a Global Matrix. Harvard Business School, 1999.
Acer, Inc.: Taiwan’s Rampaging Dragon. Harvard Business School, 2001.
Begley, Thomas M., and David P. Boyd. “The Need for a Corporate Global Mindset.” MIT Sloan Management Review, 2003, pp. 25-32.
Hastings, Donald F. “Lincoln Electric’s Harsh Lessons from International Expansion.” Harvard Business Review, 1999, pp. 163-164.
Jollibee Foods Corporation (A): International Expansion. Harvard Business School, 2001.
Lincoln Electric: Venturing Abroad. Harvard Business School, 1998.
McKinsey & Company: Managing Knowledge and Learning. Harvard Business School, 2000.
Philips versus Matsushita: The Competitive Battle Continues. Harvard Business School, 2009.
Procter & Gamble Europe: Vizir Launch. Harvard Business School, 1989.