International Management Review Vol. 8 No. 2 2012 83 Essay: Developing Global Leadership: A review of barriers and adjustments for international expansion David Burkus Oral Roberts University, City and Country, USA Global expansion brings with it many new challenges and opportunities for any organization. This article outlines four barriers to global expansion (language, regulation, culture, and competition) and provides leaders with organizational adjustments: organizations must develop executives with a global mindset and cultural sensitivity; leaders must decide on the level of involvement and decentralize their structure to empower local managers. These adjustments will better prepare an organization for going global. It’s inevitable. Just as a growing hermit crab will eventually look for a new shell to grow into, as organizations grow, many leaders will eventually look to other countries or continents to expand into. However, often the method that brought success at home is not the same route that will ensure success abroad. Fortunately, there’s help for leaders looking to help their organizations go global. This article will outline common barriers to global expansion and suggest organizational adjustments leaders will need to make. Leaders will need to develop an understanding of these barriers and adjustments in order to know what to expect when they’re expanding. Organizations expanding into new countries will likely find that “business as usual” will not operate well in the new culture (McCall & Hollenbeck, 2002). The cultural differences among locals will create several barriers that must be overcome for a successful expansion: Language. McCall & Hollenbeck’s (2002) research on global executives found that learning the language was often the largest barrier to working across cultures. Though English is the unofficial language of international business, critical information can be lost in translation. Similarly, negotiators who do not speak the local language can find themselves at a disadvantage. Regulation. Differences in labor and consumer regulations can make doing business more difficult in foreign countries (Black, Morrison, & Gregersen, 1999). For instance, emission regulations for computer models are stricter in Europe than the United States; as a result, product lines may have to be customized. Awareness of regulatory standards is vital in order to remain competitive with local firms. Culture. The cultural norms of interaction affect the way business transactions are made, even if all parties interact in the same language. In the United States, many executives focus on doing business first and letting personal relationships build as the business relationship does (Black, Morrison, & Gregersen, 1999). In many cultures, this order is reversed. Knowledge of this and oth ...

1. International Management Review
Vol. 8 No. 2 2012
83
Essay: Developing Global Leadership:
A review of barriers and adjustments for international
expansion
David Burkus
Oral Roberts University, City and Country, USA
Global expansion brings with it many new challenges and
opportunities for any organization. This article
outlines four barriers to global expansion (language, regulation,
culture, and competition) and provides
leaders with organizational adjustments: organizations must
develop executives with a global mindset and
cultural sensitivity; leaders must decide on the level of
involvement and decentralize their structure to
empower local managers. These adjustments will better prepare
an organization for going global.

2. It’s inevitable. Just as a growing hermit crab will eventually
look for a new shell to grow into, as
organizations grow, many leaders will eventually look to other
countries or continents to expand into.
However, often the method that brought success at home is not
the same route that will ensure success
abroad. Fortunately, there’s help for leaders looking to help
their organizations go global. This article will
outline common barriers to global expansion and suggest
organizational adjustments leaders will need to
make. Leaders will need to develop an understanding of these
barriers and adjustments in order to know
what to expect when they’re expanding.
Organizations expanding into new countries will likely find that
“business as usual” will not operate
well in the new culture (McCall & Hollenbeck, 2002). The
cultural differences among locals will create
several barriers that must be overcome for a successful
expansion:
Language. McCall & Hollenbeck’s (2002) research on global
executives found that learning the
language was often the largest barrier to working across
cultures. Though English is the unofficial

3. language of international business, critical information can be
lost in translation. Similarly,
negotiators who do not speak the local language can find
themselves at a disadvantage.
Regulation. Differences in labor and consumer regulations can
make doing business more difficult
in foreign countries (Black, Morrison, & Gregersen, 1999). For
instance, emission regulations for
computer models are stricter in Europe than the United States;
as a result, product lines may have to
be customized. Awareness of regulatory standards is vital in
order to remain competitive with local
firms.
Culture. The cultural norms of interaction affect the way
business transactions are made, even if all
parties interact in the same language. In the United States, many
executives focus on doing business
first and letting personal relationships build as the business
relationship does (Black, Morrison, &
Gregersen, 1999). In many cultures, this order is reversed.
Knowledge of this and other cultural
differences can make interactions with local executives
significantly less complicated.
Competitors. As companies enter new markets, they inevitably

4. meet local competitors. These
competitors have knowledge of local markets that foreign
companies may not. For example,
McDonald’s spent 13 months trying to sell beef hamburgers in
India before an understanding of local
beliefs convinced them to use lamb (Rosen, Digh, Singer &
Philips, 2000). Partnering with local
competitors or conducting extensive competitive analysis is
vital for gaining this market knowledge.
These four barriers are not exhaustive, just common. When
crossing cultures, organizational leaders
can expect to encounter barriers similar to the ones listed above
and, in some cases, drastically
different ones.
Whatever barriers these leaders face, their first step is to
prepare. Organizations increase their
chances of successful expansion by adjusting the way they
operate. Several adjustments may need to be
made to prepare an executive or organization for going global:
Develop a global mindset. Executives preparing for expansion
must develop a mindset that is open
and aware of cultural diversity yet can synthesize across this
diversity (Gupta & Givindarajan, 2002).

5. Organizational leaders must be able to synthesize their
companies global strategy with the needs of
the local organization and local market.
MGT/576 v1
Title
ABC/123 vX
Page 2 of 3
Entrepreneurial Strengths and Actions to Increase Value
Creation
Complete the table below, assessing the company’s strengths
and weaknesses and describing the company’s approach to
innovation.
Company name: CVS Health
Company website URL: https://www.cvshealth.com/
3 to 5 entrepreneurial strengths of the company (90 – 175
words)
A significant entrepreneurial characteristic of CVS Health is its
ability to link divisions to increase efficiency. A well -connected
network of efficient divisions makes it much easier for the
company to manage its operations and activities.
A second strength of ours is our ability to penetrate new
markets effectively. As a retailer of pharmaceuticals, the
company has developed a strategic business strategy that allows
it to easily enter new markets and create substantial market
shares. A competitive advantage is gained by the company as a
result of this.
Brand equity, or the ability to sell goods and services that meet
market expectations, is the third advantage (Koh et al, 2019).
Firm expansion into new regional markets is expected due to a

6. strong penetration rate.
Major elements of the company’s approach to entrepreneurship
and value creation (175 words)
Two categories of methods can be used by a firm to engage in
entrepreneurial activities and create value. At CVS Health,
business models such as pharmacy benefit management and
brick-and-mortar are used. As a subsidiary of CVS Health
Corporation, CVS Caremark also uses the PBM business model,
also known as pharmacy benefit management. In Pharmaceutical
Benefits Management (PBM), a company oversees the
distribution of pharmaceuticals to improve supply chain
efficiency and lower costs for their customers. It is a subset of
supply chain managed services. As a result of the American
Society of Health System Pharmacists (ASHP)'s collaborati ve
efforts, this model was created.
In addition to selling products online, CVS Health Corporation
also operates its stores. With its traditional storefronts and
online shop, CVS Pharmacy operates both as a single entity,
which is operated by the same company. With its cost-based
generic strategy for competitive advantage, this business model
maximizes the company's market reach, which suits its
aggressive expansion plans in retail pharmacies and healthcare.
As a business model, Kassler's 2020 model maximi zes market
reach despite the competition (Kassler,2020).
A standard approach is used by the organization regarding its
business strategy, so that entrepreneurial opportunities are
maximized. Continually focusing on cost leadership generic
approaches, CVS maintains its leadership position in retail
pharmacies, formulary management, and healthcare services. It
is essential for the company to establish itself as the lowest-cost

7. supplier of the retail pharmacy industry in order to offer prices
that are competitive. The company's business model is driven by
this objective (Kassler, 2020).
1 action the company could take to increase entrepreneurial
value creation
Increasing marketing efforts on new continents and nations
would be a wise move for the corporation to diversify. This is a
real possibility because the company can keep its manufacturing
costs low, and by extension, its selling prices low. By pricing
its products competitively, the corporation may be able to
quickly capture some of these markets. It is essential for the
corporation to take such measures in order to boost its earnings
in the near future (Kassler, 2020).
References:
Koh, H. K., Singer, S. J., & Edmondson, A. C. (2019). Health as
a way of doing business.
Jama,
321(1), 33-34.
Kassler, W. J. (2020). Turning barriers into benefits to facilitate
public health and business partnership.
American Journal of Public Health,
110(4), 443-445.

8. Copyright 2020 by University of Phoenix. All rights reserved.
Copyright 2019 by University of Phoenix. All rights reserved.
image1.png
cvs
David Leonard
University of Phoenix
MGT/576
17 September 2022
Description of the organization
The CVS pharmacy and CVS Caremark networks of retail
pharmacies are among the health and pharmaceutical companies
owned by CVS.
It has improved the health of whole communities through its
services, and thousands of individuals have benefited from the
firm's services.
In addition to helping consumers understand the health care
system, the business also helps them use it.
The company's ultimate goal is to expand its reach and enhance
the existing health care system.
Since it first opened, the firm has expanded because to its
dedication to its clientele.
Health care solutions offered by CVS Health are unparalleled in

9. the industry. Patients benefit from their assistance in navigating
the health care system and their own treatment since it increases
convenience, decreases expenses, and acts as a reliable
companion. Every day, they give their hearts and souls to this
work.
2
Strengths
It is important to CVS that different parts of its organization
work together to achieve synergy.
Guo et al. (2018) report that both the retail pharmacy sector and
the healthcare business in the U.S. have deep penetration levels.
American healthcare and retail pharmacy sectors highly regard
CVS as a quality brand.
Compared to its primary competitors, the brand is more
competitive because of its strengths and core competencies.
The firm's extensive market reach gives it an advantage over its
smaller rivals, which can't match its economies of scale in the
present day United States
By delivering economies of scale, CVS delivers a high level of
penetration through chain synergy across its interdependent
divisions and subsidiaries (Guo et al., 2018).
3
Weakness
It is difficult for retail healthcare and retail pharmacy
operations to expand beyond their current boundaries.
(Hao et al., 2020) it is possible to replicate the retail pharmacy
model used in the health care industry successfully.
A government regulation can have a significant impact on the
pharmaceutical and healthcare industries.
Business risks have a particularly detrimental effect on the
healthcare and retail industries in the US.
Stores selling the brand's products compete directly with the

10. company.
Despite CVS's somewhat limited retail pharmacy business and
its rather narrow retail breadth, its operations and business
model for healthcare are easily replicable (Hao et al., 2020).
4
External Environment
There are external factors that have led the organization to
gaining some opportunities in the market.
The organization has not hesitated to learn the changes in the
external environment which lead to opportunities.
These factors include changes in the demographics which lead
to changes in the health care system.
There is demand of certain drugs which lead to increased
demand in the organization when exploited it leads added value
in the organization.
These include the demand for antiaging drugs in the market.
There are a lot of external factors which the company can
exploit to get the best value in the market. These factors are
caused by several things and this includes the changes in
demographics. The company can exploit these opportunities to
add value.
5
The population has been using a lot of cosmetics to enhance
and others change their appearances.
In the process there is a demand created for some drugs which
CVS is able to provide.
This include anti aging drugs which the company can provide
in the market to add value.

11. The aging population is also an external market factor that
creates opportunities for the company.
The aging population has increased prescriptive needs which the
company can take as an opportunity and exploit them for their
advantage,.
The aging population comes with needs which can be exploited
by the company for its advantage. Due to aging prescriptive
drugs are demanded more and the company can consider this as
an opportunity to add value.
6
There is also other opportunities which are being brought by the
demand in the market which leads to unsolved needs.
Trends in the society have changed. People are adopting new
lifestyles.
While some are seeking to look certain way, others are looking
for drugs to ensure they are living by certain standards.
Therefore there are unsolved problems in the market which
create a good opportunity for the company.
These unsolved problems include drugs for slimming or adding
weight depending on an individual.
There are unmet needs in the society which have created
unsolved problems. Solving these problems creates
opportunities in for the company which they can exploit hence
adding value.
7
Evaluation of opportunities to add economic value
Through raising prices or selling additional goods and services
to increase its revenue.

12. Through decreasing capital cost by reducing operating expenses
, liquidating capital that does not cover the cost of capital and
increasing marginal expenses.
The company may reach economies of scale in order to improve
its marginal productivity.
Ensuring that the capital invested is generating returns above
the minimum required return therefore a positive economic
value added generated.
Parts of costs invested by the company should include the cost
associated with research and development
CVS raised the prices of goods and services to increase its
revenue , it also decreased the capital cost by reducing
operating expenses and ensured the capital invested is
generating returns above the minimum required return.
8
Evaluation of opportunities to add social value
Establishing a healthy business through promoting equality and
business partners and customers ethnicity.
Creating a healthy community through increasing access to
healthcare , colleague volunteerism and addressing the
disparities that hold people back from better health
Creating a healthy and friendly environment through reduci ng
environmental footprint to create a healthier world.
Buyers are asked to explicitly evaluate social value in exercises
of procurement.
Partnership with trusted non profits which provides increased
access to quality healthcare in the community.
CVS has established a healthy business by promoting equality ,
it has also created a healthy community through increasing

13. access to healthcare , and also partnering with other non profits
to provide increased access to healthcare.
9
Evaluation of opportunities to add environmental value
Valuation method are developed to generate reasonable
estimates of the environmental amenities by the
environmentalists and natural resource economists.
An international effort was launched to identify strategies for
conservation and sustainable use of the environment and
evaluate the current state of earths ecosystems by the united
nation
Dollar values is placed on the elements of the environment that
might be considered priceless (Williams et al., 2020).
A wide range of ecosystem has been provided by scientists and
police makers therefore they have been able to develop a new
framework for thinking about how nature has value.
Fixing common pool resource problems and excessive rates of
resource exploitation therefore giving environmental analyst an
easy time to identify quantity measures,
CVS has made it easy to use valuation method in order to
generate reasonable estimates of the environmental amenities ,
it has also launched an international effort to identify strategies
for conservation and sustainability of the environment
(Williams et al., 2020).
10
Opportunity to pursue first
Management of diabetes. Virta, the virtual diabetes care
company of CVS Health, entered into a strategic alliance with
the insurance division of CVS Health known as Aetna at the
beginning of this year. A joint venture between Banner Health
and this partnership was formed. Virta's diabetic care

14. management program is available to select Aetna members as a
result of this agreement. Monitoring of diet along with remote
monitoring is part of this program.
Clinical profiles of patients are complex. To provide home-
based medical care, Aetna, a subsidiary of CVS Health,
collaborates with Elemy, Landmark Health, and WellBe Senior
Medical. With Elemy, people with mental health disorders can
receive internet treatment at home. Among the Landmark Health
patients with chronic diseases who receive home visits and
virtual doctor visits may be those who suffer from chronic
diseases. Patients with a variety of medical concerns receive
home-based medical treatment from WellBe Senior Medical.
This collaboration, which aims to save costs and improve
patient outcomes, is most applicable to Aetna's Medicare
Advantage plan members because they are clinically
complicated patients.
The company should pursue opportunities with more demand in
the market. The market is dynamic and so should the company.
Understanding the market dynamics will help the company to
meet their customers needs.
11
Guo, K. H., & Eschenbrenner, B. L. (2018). CVS Pharmacy: An
instructional case of internal controls for regulatory compliance
and IT risks. Journal of Accounting Education, 42, 17-26.
Hao, T., Elith, J., Lahoz‐ Monfort, J. J., & Guillera‐ Arroita, G.
(2020). Testing whether ensemble modelling is advantageous
for maximising predictive performance of species distribution
models. Ecography, 43(4), 549-558.
Williams, R. N., Wright, D., Crowther, A., & Denham, T.
(2020). Multidisciplinary evidence for early banana (Musa cvs.)
cultivation on Mabuyag Island, Torres Strait. Nature Ecology &
Evolution, 4(10), 1342-1350.