Unit 8 Discussion 1-Global Strategy PDF

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Nike is a company that believes every person is an athlete and they believe in connecting the world, not only to the Nike brand but to other athletes as well. Europe, Middle East, Africa, Asia Pacific, and other global emerging markets make up close to half the total revenue Nike earns (Nike Inc's Business Segments Description, 2018). Branching out to different markets creates an opportunity to participate in these larger markets. Immersing themselves into different markets has allowed Nike to gain and sustain a competitive advantage in athletic footwear and apparel. The AAA triangle is a framework, outlined by Ghemawat (2007), that can help develop an effective global strategy. Nike has multiple retail stores worldwide, and each one has been set up to have the ability to adapt to its specific environment. Aggregation allows a global operation to come to life. Nike has done an excellent job of searching for new target locations that provide the opportunity to grow the brand. Arbitrage divides the supply chain, and this is another aspect Nike has included in their global domination. For example, by separating the factories and the retail stores, Nike can take advantage of different markets. Understanding different markets is vital to long-term success, and using the AAA triangle is a great place to start developing a global strategy (Ghemawat, 2007). Some advantages and disadvantages come with expanding globally. Advantages include entering a larger market base, connecting the Nike brand globally, different costs of production (lower costs in other countries than it is in America), opportunities for growth, securing a competitive advantage. Global expansion also comes with its disadvantages, which a company needs to consider before launching a global initiative. Cultural differences are an example of a disadvantage to going global, and what I mean by this is that products may sell differently in one market than in another market based on the different cultures present. Other disadvantages include product or manufacturing regulations, and additional costs for new staff members and factories (Rothaermel, 2017). Leaders in an organization need to be aware of these global issues first and foremost and develop a plan of attack based on them. Creating a corporate culture that encourages diversity, creativity, and collaboration keeps employees engaged in their work. Corporate culture that is free of toxicity and ensures camaraderie will increase work productivity by employees and advance the company forward. Understand the current issues, develop a plan, involve everyone, and keep the communication barriers open and addressing global issues will become simplified. References: Ghemawat, P. (2007). Managing differences: The central challenge of global strategy. Harvard Business Review, 85(3), 58–68. Nike Inc’s Business Segments Description. (2018). CSIMarket. Retrieved from https://csimarket.com/stocks/segments.php?code=NKE Rothaermel, F. (2017). Strategic management concepts (3rd ed.). New York, NY: McGraw-Hill. Chapter 9, "Corporate Strategy: Strategic Alliances and Mergers and Acquisitions." Chapter 10, "Global Strategy: Competing Around the World."...