A globalization strategy is generally developed by first taking into consideration the company’s overall strategy, including its operations at home and abroad. We can consider four aspects of strategy: (1) scope of operations, (2) resource allocation, (3) competitive advantage, and (4) synergy, or in other words we can use Michael Porter’s Diamond Model to evaluate if it is feasible for the company to globalize its operations. The first step in the process is to identify possible geographic locations—countries and regions—of possible operations as well as possible markets or niches in various regions. Since companies have limited resources and since different regions offer different advantages, selecting markets that offer the company the optimal opportunities is a key to the success of a company’s strategy for competing across borders.
A global strategy must also focus on the use of company resources so that the company can compete successfully in its chosen markets. This component of strategy planning also determines the relative importance of various company functions and bases the allocation of resources on the relative importance of each function.
Next, management must identify in which areas the company can achieve competitive advantage over their competitors in their selected markets. Management can identify their competitive advantage by determining what the company does better or can do better than its competitors. Companies may realize this advantage through a host of techniques such as using superior technology, implementing more efficient organizational practices and distribution systems, and cultivating well-known brands. This part of the strategy not only involves the identification of existing or potential areas of competitive advantage but also de ...