Both Ford and Phillips Electric have faced major changes globally in their markets and industry structures with the emergence of new competitors, new markets and new technologies. Historically both companies pursued a multi-domestic approach to managing their global operations but have had to adapt given new circumstances. Compare the two companies responses to these developments and why one seems to be more successful in making the transition to a transnational approach.
Solution
Increase in globalization and industrialization has created an intense competition at the marketplace. In order to sustain and grow in such environment companies require continuous adaptation of new strategies.
Companies utilizing a transnational approach possess well-coordinated business activities between their head office and local and international operational divisions. It helps them to utilize various benefits including centralization of business activities and increasing the local responsiveness.
Ford is one of the largest producers of automobiles across the globe. Its major production facilities are located in Europe, America, Australia and South Africa. Besides this it has established affiliates in more than 95 countries.
Initially the company was utilizing decentralized strategy . Its operational business units in different nations used to have different decision making units in different countries. Later on, the company restructured its business model to become centralized. Besides this, it has stated acquiring different companies. This strategy has helped the company to increase its market share and growth. It also increased the productivity and sales revenue of the company. Ford could successfully utilize this structure due to its flexible business operations and ability to handle the structural change .
Contrary to this, Philips could not utilize this approach as they lacked the flexibility to successfully operate in global environment . Major reason behind this failure was larger dependency of the company in its centralized operations .
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Both Ford and Phillips Electric have faced major changes globally in t.docx
1. Both Ford and Phillips Electric have faced major changes globally in their markets and industry
structures with the emergence of new competitors, new markets and new technologies.
Historically both companies pursued a multi-domestic approach to managing their global
operations but have had to adapt given new circumstances. Compare the two companies
responses to these developments and why one seems to be more successful in making the
transition to a transnational approach.
Solution
Increase in globalization and industrialization has created an intense competition at the
marketplace. In order to sustain and grow in such environment companies require continuous
adaptation of new strategies.
Companies utilizing a transnational approach possess well-coordinated business activities
between their head office and local and international operational divisions. It helps them to
utilize various benefits including centralization of business activities and increasing the local
responsiveness.
Ford is one of the largest producers of automobiles across the globe. Its major production
facilities are located in Europe, America, Australia and South Africa. Besides this it has
established affiliates in more than 95 countries.
Initially the company was utilizing decentralized strategy . Its operational business units in
different nations used to have different decision making units in different countries. Later on, the
company restructured its business model to become centralized. Besides this, it has stated
acquiring different companies. This strategy has helped the company to increase its market share
and growth. It also increased the productivity and sales revenue of the company. Ford could
successfully utilize this structure due to its flexible business operations and ability to handle the
structural change .
Contrary to this, Philips could not utilize this approach as they lacked the flexibility to
successfully operate in global environment . Major reason behind this failure was larger
dependency of the company in its centralized operations .
