Beginning Development of Global Strategies

This report is a global analysis of the company. John & Deborah’s company operates in
the furniture industry and is renowned for its unique customer experience and the high quality of
its products. Currently, the company ships its products to 48 states within the United States,
although its headquarters are in Boston. The company considers several factors to make the
global strategy decision, including competition from other firms, aggressive marketing from
rivals, stagnating sales, and a general increase in market share.
Global strategy is the strategy that companies undertake to expand their operations. There
are four reasons that prompt businesses to consider global strategies which are seeking additional
market, seeking additional resources, seeking efficiency, and seeking strategic assets (Onyusheva
et al., 2018).

John & Deborah’s company is considering 3 countries for expansion. For strategic
expansion, the countries considered are South America, Europe, and Asia. This section analyses
the pros and cons of expanding into each country. In South America, the country is considered
Brazil. The advantages of a strategic geographic expansion include providing access to the larger
South American market, proximity to the United States operations, and availability of materials
and resources for manufacturing furniture. The disadvantages include that Brazil has a lower
economic status than the United States, many competitors, and regulatory and tax barriers
(Sellito & Luchesse, 2018).

The country considered in Europe is France. Advantages of expanding in France include
its strategic location in Europe, high socio-economic standards, and few business restrictions.
The disadvantages include a high taxation rate and an expensive workforce, and a high tax rate

will impact profitability. Additionally, an expansive workforce could force the company to think
of alternative locations for its manufacturing activities, forcing it to incur additional distribution
costs.

The third country considered is China. Expanding into China includes cheap and
available labor, strategic access to Asia, access to raw materials, access to cheap labor, few
barriers to the market, and access to a large target market (DiTommaso & Bain, 2018). The
disadvantages include high competition, a significant distance between operations in the United
States, and cultural differences. From the above analysis, each of the three countries selected has
unique advantages, access to strategic markets, and other features.

Of the three countries, the country with the most tremendous potential is China. China is
strategically placed to allow the company to launch its products in other Asian states such as
Japan, Korea, and India. China is one of the world’s fastest-growing economies, with a stable
currency that is good for business. Thirdly, China has access to technology and machinery to
support manufacturing activities. Materials such as wood, fabric, and tools are in plenty of
supply in China. The Chinese population is the largest in the world and will allow the company
to have a wide array of skills and a large target population for which to focus marketing
activities. A high population is essential for creating demand for the company’s products.

In conclusion, the global strategy can therefore be successful for the country and can help
it become more competitive and boost revenues. Expansion activities into China can help the
company increase its brand value.

References

DiTomaso, N., & Bian, Y. (2018). The structure of labor markets in the US and China: Social
capital and guanxi. Management and Organization Review, 14(1), 5-36.
Onyusheva, I., Ting, Q. Y., Kaewpradit, P., & Changjongpradit, E. E. (2018). KEY REASONS
WHY ORGANIZATIONS ENTER FOREIGN MARKETS. The EUrASEANs: journal
on global socio-economic dynamics, (5 (12)), 07-19.
Sellitto, M. A., & Luchese, J. (2018). Systemic cooperative actions among competitors: the case
of a furniture cluster in Brazil. Journal of Industry, Competition and Trade, 18(4), 513-
528.