When organisation do any strategic planning then they are considered each and every strategies and segmenting market. There are two approaches of strategies which can be followed by any company. These are differentiation (specialty) and low cost (commodity). In low cost strategy, company provide their products and services to customers (Strategy: Low Cost or Differentiation, 2017). For example, if there are two companies who is providing identical products and selling at same price in market. In this, the one with lower cost will gain advantage for high level of profits from per sale. Other approach is differentiation strategy, in this organisation must understand their customers wants and preferences. Through this, business firm must build their brands in order to maintain their position and visibility in competitive market. Sony is bets example for both strategies and it extremely effect to market also. A years ago, Sony was the leader in selling personal music devices which consists high profitability and volume. Their position was also overcome by using other advanced technologies such as smart phones, MP3 players and so on. Low cost strategy is effective when new firm is entering into market with offering innovative products and services.
Managing of global organisation is become business challenge. Manger of multinational company have to conduct proper market research in order to identify their target customers. While in industry analysis, main problem which is faced by manager is that customer preferences (Qi, Zhao and Sheu, 2011). As there are numerous customers and their preferences are also different from each other. So, it become difficult for company to satisfy their requirements of each and every customer. Another issue is government policies. Every country has different rules and policies regarding operating any business. So, manager can face problem in functioning their business as per requirement of government.
SWOT analysis is an acronym of strength, weaknesses, threats and opportunities. SWOT can be carried out for organisation, person, product etc. SWOT analysis is considered as complex for multinational company than domestic because opportunities and threats are connected with the firm’s external environment. It made more complicated for organisations to carried out business at international level (Reimann, Schilke and Thomas, 2010). For example, small business enterprises cannot operate their business at international level. To carry out their business they need support from governments and funds.
There are many multinational companies which is affecting to local market. The different organisation is trying to differentiate itself from their competitor’s strategy by providing products or services in extra value. Through this, they will attract large number of customers by satisfying their requirements. Local responsive strategies are not limited for multinational companies which can afford to set up their overseas subsidiaries. When multinational company enters into other country with the aim of targeting new customers then it ultimately impacts on domestic organisation ambitions and objectives (Santos-Vijande, López-Sánchez and Trespalacios, 2012). For example, if Walmart company enters into any country with the aim of selling number of products and services at low price to customers then it influences to domestic company in terms of sales and profits.
Functional structure of organisations is best for those companies who are focusing on offering single product or service. Small company can also get benefit from functional structure of product. The advantage of functional structure are specialists. In this, employees are growing in their field which leads into the development of specialists. The company have to crafted performance properly then it will also promote visibility of employee skills. It also maximises performance by sharing valuable expertise with their subordinates. This structure can be adopted when the aim of organisation is to sale single product in market (Teece, 2010). This structure is benefit for those organisation who are only focusing on single product or services. For example, UBER is only focusing on offering single taxies services which is convenient for customers or clients.
- Qi, Y., Zhao, X. and Sheu, C., 2011. The impact of competitive strategy and supply chain strategy on business performance: the role of environmental uncertainty. Decision Sciences. 42(2). pp.371-389.
- Reimann, M., Schilke, O. and Thomas, J. S., 2010. Customer relationship management and firm performance: the mediating role of business strategy. Journal of the Academy of Marketing Science. 38(3). pp.326-346.
- Santos-Vijande, M. L., López-Sánchez, J. Á. and Trespalacios, J. A., 2012. How organizational learning affects a firm's flexibility, competitive strategy, and performance. Journal of Business Research. 65(8). pp.1079-1089.
- Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning. 43(2). pp.172-194.