DIRECTIONS : Please reword this and elaborate more on this discussion from my previous post. This is meant to be an update of a weekly learning. So please Phrase it as a learning subject and reword.
What I learned this week companies first need to take the appropriate steps prior to making the move to global expansion. With just a few steps companies can be set up for success to expand globally.
Starting with the strategy diamond this comes into play with international strategy regarding economics. Varying on the scale and scope of the product this may require a huge upfront funding prior to being successful (Carpenter & Sanders, 2008 p 208).
Some of these steps to be taken are the CAGE framework and building alliances. The CAGE framework focuses on how expanding globally can create distance culturally, administratively, geographically and economically and how if not researched closely can put a company at risk (Carpenter & Sanders, 2008 p 210). Building alliances helps companies to ease their way into a market by partnering with alliances that are familiar with the market and government regulations (Carpenter & Sanders, 2008 p 217).
There is also international strategy configurations that add to the complexity of expanding globally. Some things under this umbrella to consider is multinational and international configuration. Multinational configuration requires internal support for these various locations. “Management must also make judgements about the firm’s internal resources and capabilities to support a particular international-strategy configuration” (Carpenter & Sanders, 2008 p 222). International configuration is what made the most sense to me finically for a company especially in the Gymboree examples where we franchise our international stores, it helps with keeping their costs and our costs low. This is known as “centralizing some resources, such as global brand and distribution capabilities, in order to achieve cost savings but decentralizes others” (Carpenter & Sanders, 2008 p 224).
Developing a global mind-set is the basic guide I see as to where companies can begin before deciding to expand globally. This guide is broken out into four sections travel, teams, training and transfers. I can now see why Gymboree has various executive team leaders travel to a specific market to further develop our alliances. Creating the team “composed of members from different cultures. An important by-product of this tactic is that the team members gain experience working with people from countries other than their own” (Carpenter & Sanders, 2008 p 228). Training is one a solid foundation I have learned as necessary to provide clear steps on how to follow suite and operate as one company. Transfers of having people living in a market is ideal and I defiantly saw the need for this when Gymboree owned the Australia locations by having a District Manager overseeing them.
Carpenter, M. and Sanders, Wm. (2008). Strategic Management A Dynamic Perspective. New Jersey: Pearson Education, Inc.