Question

Question:

Certain companies based in certain countries are able to overcome the substantial barriers to change and consistent innovation besides aggressively pursuing improvements and seeking competitive advantage.

REQUIRED:

2: Based on the above scenario, suggest and critically discuss 4 kinds of company policies that would support the government endeavors. (500 words)

Answer 1

Four Company Policies that support the government endeavors are:

• Enriched Factors of Production. A country having enriched factors of production like skilled labor, advanced technology, vast land can compete in a given industry. A company enriched with these factors will be able to produce more and sell more both in homeland and also in other countries thus leading to increase in market share and profits. A company having abundant of these resources ha the advantage of using them inefficiently. But if the company is facing scarcity then it should use these resources prudently and innovate and upgrade them to compete.
• Demand Conditions. The nature of home market demand for industry's product or service. Higher the demand the industry will generate large profits and continue to innovate, grow , compete and expand. The vice versa also holds true.Another precondition is company goals that lead to sustained commitment to the industry. Both these conditions will pressurize the company to update and innovate.Home-demand conditions help build competitive advantage when a particular industry segment is larger or more visible in the domestic market than in foreign markets. Fast food and use of credit cards have been very successful in US. The same is spread to other countries and demanded by customers in other countries.
• Presence of Supporting Industries.The presence or absence in the nation of supplier industries and other related industries that are internationally competitive affect the success or the failure of the companies. If the company receives continuous supply of raw material required for the production of goods from the supplier industries then it will able to meet the expectations of demand made by people and can generate huge profits and can fight competition. However, Opposite also holds true. When suppliers are global competitors then it benefits the companies in the nation. Japan is a leader in providing high quality consumer electronics and this has led to Japan gaining dominance in electronic musical keyboards also.
• Firm Strategy, Structure, and Rivalry. This is one of the most important factor that affects the ability of firm to compete.The conditions in the nation governing how companies are created, organized and managed affect the success of the company. Example MacDonald in India received huge resentment in the beginning as it was feared that its burger contains beef which hurt the religious sentiments of Indians as Cow is considered holy in India.The nature of domestic rivalry also affect the success or failure of the company.No managerial system is universally appropriate.In some countries companies tend to be strictly hierarchical in organization and management practices while in other countries competitors may comprise of small or medium-sized companies that are privately owned and operated like extended families.Germany is more famous in technical or engineering based industries and less successful in consumer goods.US is more successful in new industries like software and biotechnology.Israel and Russia are very successful in defense related products.