Within such a vast and broad subject such as Strategic Management, there are numerous links that can be made between the topic and global strategy. But picking up on the basic prescriptive and emergent distinction, there are two particular routes that are worth highlighting:
This distinguishes between what happens inside the company – such as exporting or overseas manufacture – and what happens outside the company’s existing resources – such as the acquisition of a new company or a joint venture. These activities do not necessarily take place outside the company’s home country. But when they do, they are essentially an international or global business strategy.
The full matrix is shown below. Its value lies in helping to structure the prescriptive international and global options. However, it does little to help choose between the options.
From an emergent strategy perspective, many companies will experiment in different countries to see what works. When success has been achieved, companies will then choose to do more of such activities. This is essentially a learning process and is emergent in its development.
In practice, learning processes can take place in two phases. The first phase is called single loop learning . This involves companies testing out new concepts, products and services in an international market to see what appeals to customers and adds value to the company.
The second phase is called double loop learning. After successfully (or otherwise) testing of a product or service, some companies then undertake a more fundamental re-appraisal of the product or service. The aim of this second phase is a to ask more fundamental questions about the nature of the product or service – can we do much better? why are we really doing this? etc. This is the second learning loop.
The whole concept is shown in the diagram below. Both loops have been regularly used in international and global strategy to check out initial progress and then to undertake a more fundamental rethink about an international product or service.
Here is a video about the global market for recorded music. Apple has come to dominate the market over the last few years. But the record companies, Google itself and the mobile phone companies are now challenging Apple’s success.
Who will win? And how?
Emergent strategies are important in this fast-changing global market.