Competitive Strategy Multinationals and Corporate Social

Question: Discuss about the Competitive Strategy for Multinationals and Corporate Social. Answer: Introduction: Effective strategy plays an undeniably important role in the organizational success of a company. However, while most people confuse the term goal with strategy, it is important to understand the meaning of strategy. Strategy is not merely the goal or the vision of an organization, but rather it implies the effective steps formulated and executed by the organization for the accomplishment of the goals (Slack 2015). The strategy of an organization is critical to its success, and while framing a strategy, an organization will need to ensure that it has sufficient knowledge about who it is competing with, and what unique and innovative product it has to offer. In addition, it must also understand the ways of utilizing the existent resources, so that the organization can be sustained in future(What is Strategy? 2016). KFC has managed to emerge as one of the most recognized organizations in the fast food industry of the world. The key to this success has been its adoption as well as application of the most efficient strategy. The goal of KFC has been to offer superior quality, fresh yet tasty fast food to the consumers, and to materialize this goal, the organization has discreetly selected its strategy. The organization has always been aware of the growing popularity of McDonalds which was established just 10 years after KFC, and hence the management authority of KFC has introduced a variety of innovation in the products offered. As opposed to a limited number of tasty and healthy food items offered by McDonalds, KFC offers a variety of tasty, spicy food products, starting with burgers and Crispy Chicken, it offers Krushers and dainty desserts as well. By allowing this much variety in the products offered, KFC has succeeded in enjoying competitive advantage over the rival organizations, like McDona lds. Further, through the introduction of innovative food items, like Chizza and Popcorn Chicken, KFC has managed to carve out a distinct position for itself in the fast food industry of the world. KFC also enjoys a larger market, as the products offered intends to cater to the needs of a 6 year boy to a 65 year old man. In order to sustain itself in future amidst a tough competition from rival fast food selling organizations, KFC has been adopting a policy of market segmentation. Accordingly the organization is targeting at drawing the attention of consumers from various parts as well as sections of the society. An effective strategy in a competitive market, is only possible when an organization is aware of the position of its competitors and manages to adopt the best strategy accordingly. The chief competitor of KFC has been McDonalds, the target market of which has been the kids. Hence, KFC has strategically introduced products such as Chicken bucker for the youths, Chizza and Krushers for the kids, as well as the rice bowls and salads for the elderly consumers. Again, though KFC primarily served the upper class consumers, presently it has been offering tempting offers and discounts on specific days of the week, so that every class of people can take delight in tasting their service. Consequently, the adoption of an effective strategy has contributed to the creation of a unique position of KFC in the international market of fast food industry (Verbeke 2013). Pankaj Ghemawat: CAGE Framework to Evaluate International Trade Opportunity In the world of globalization, no big organization remains anymore confined to its own region. Rather it extends beyond the confines of a local market, expanding to other spheres of the world. Globalization is adopted as a marketing strategy, as it assists an organization gain greater international recognition, and diversify its market by offering service to a wider mass of people (Collis 2015). However, globalization in itself is not an easy step, as it highlights the necessity for the authority of an organization to comprehend the cultural, administrative, geographic and economic differences that lie between two nations. Thus, the CAGE framework has been suggested by Pankaj Ghemawat which shows the important factors that an organization needs to consider before it dreams of achieving global expansion(Pankaj Ghemawat: CAGE Framework to Evaluate International Trade Opportunity 2016). Two countries are not only physically apart from each other, but each has a set of sharp cultural distinctions from each other. The greater the distance, the harder it is for an organization to establish itself in a foreign country. The Spice Room is an Indian restaurant chain that has expanded its business in Australia. The restaurant offers a variety of tasty, spicy Indian dishes, however it has not gained much popularity among the consumers. This is because of the sharp distinction that lies between the choice of food of the Australians and the Indian citizens. The restaurant could have done great business, had it expanded to Asian countries, such as China or Pakistan, which have an identical cultural preference (Ghemawat 2013). Again, although in terms of the administrative factors, Australian government is less likely to interfere in the business operation of The Spice Room, the Competition Laws, Consumer Laws, and Environmental Legislation create a lot of complications for a sm all scale restaurant like The Spice Room (Hill et al. 2013). Geographically speaking, The Spice sky is located in Australia which is too far from India, and hence due to remoteness in terms of distance, the employees could not be taken to Australia. However, the Australian workforce is not very professionally skilled to serve the needs. Again, climate also plays an important role, and usually the people living in hot and humid zones of the world are likely to consume spicy food (Kotkin, 2015). However, Australia being a pleasantly cool country is not the right place to serve the spicy dishes of India. Economically speaking, although there are a large number of workers in Australia, the labor force is not very skilled and professionally groomed to serve the needs of the organization (Campbell, Eden and Miller, 2011) . Besides, Australia does not have a rich industry of herbs and spices, and hence The Spice Room, needs to incur a good amount of expense for importing spices from India, which in turn increases the cost of production of the restaurant (Gilpin 2016). Hence, any organization needs to carefully consider the CAGE framework before thinking of global expansion. Reference List: Campbell, J., Eden, L. and Miller, S. 2011. Multinationals and corporate social responsibility in host countries: Does distance matter?.Journal of International Business Studies, 43(1), pp.84-106. Collis, D.J., 2015. The Value of Breadth and the Importance of Differences. InEmerging Economies and Multinational Enterprises(pp. 29-33). Emerald Group Publishing Limited. Ghemawat, P., 2013.Redefining global strategy: Crossing borders in a world where differences still matter. Harvard Business Press. Gilpin, R., 2016.The political economy of international relations. Princeton University Press. Hill, C.W., Cronk, T. and Wickramasekera, R., 2013.Global business today. McGraw-Hill Education (Australia). Kotkin, S. 2015.Redefining Global Strategy - Pankaj Ghemawat. [online] Nytimes.com. Available at: https://www.nytimes.com/2007/12/02/business/02shelf.html?_r=0 [Accessed 16 Aug. 2016]. Pankaj Ghemawat: CAGE Framework to Evaluate International Trade Opportunity. (2016). [Video] https://www.youtube.com/watch?v=7FpUJaG7uMk: Carlson School of Management. Slack, N., 2015.Operations strategy. John Wiley Sons, Ltd. Verbeke, A., 2013.International business strategy. Cambridge University Press. What is Strategy? 2016. [video] https://www.youtube.com/watch?v=TD7WSLeQtVw: David Kryscynski.