global companies
International competition between global companies takes a lot of hard work from a managerial point of view. Companies have to be careful but at the same time they must be aggressive enough to be able to face competition. A global organization must mobilize all its resources against competitors. Several actions can be taken to compete successfully: lower prices or studying each country's market position. Economies of scale and R&D play a major role in determining whether a company can successfully compete globally, besides companies must be willing to take the risk of going global.Caterpillar became against all odds a world leader in the construction equipment business. One of Caterpillar's competitive advantage is that it adopted from its early days a global distribution system that increased revenues, it also built plants in its major international markets to eliminate high transportation costs. One major threat that Cat has to face is Komatsu, its Japanese rival. To keep world leadership, Cat uses a global strategy that always keeps Komatsu one step behind, it relies heavily on economies of scale, it also invests heavily and in 1963 it formed a joint venture with Komatsu's rival in Japan: Mitsubishi, which decreased Komats
A global company always seeks to improve its position and cut the grass under its competitors' feet. It can do so entering the markets of newly industrialized countries before anyone else, therefore making it difficult if not impossible for competitors to enter these markets. It must also have a strong relationship with its customers to minimize the risk of seeing competitors generating any sales at the companies' expense. BSR applied this strategy against the Japanese in the 1970's, and it proved to be quite effective. The key to optimizing a global competitor's management of its business is to treat this business as a single system. The main problem a global strategy has to face is organization. One solution would be to come up with different organizational reporting lines from country to country. Another way to deal with this problem is to change organizational reporting lines accordingly with the changes in international business. Global strategies are an efficient way to achieve competitive advantage and success internationally in one condition: managers must be opened to new ideas, and adapt themselves to ever-changing rules. Each of Caterpillar, Ericsson and Honda were able to become global companies, and to redefine their respective industries to fit their own view of how things should be. They almost crushed every possible competition, each of them using a different technique but getting to the same result: world leadership. Economies of scale were Caterpillar's key to success; competito
Some common words found in the essay are:
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Approximate Word count = 1018
Approximate Pages = 4 (250 words per page double spaced)
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