Evaluating Levitt’s View on Global Strategy (Essay Sample)

Management/Business Evaluating Levitt’s View on Global Strategy By: Instructor’s Name: Course Code: Submission Date: Introduction The global strategy varies with the researcher's views, but the constant view is that globalisation is at hand. Levitt 1983 views that market globalisation is at hand, hence, there is a likelihood for the multinational commercial and corporation to be near the end. According to him, the multinational corporation operates in various countries of the world and tend to expand its products and processes across those countries with what Levitt views to be relatively higher cost. Also, he feels that the global corporations are operating with constancy; selling the same things in the same manner across all the countries that it operates. Levitt’s view has either been justified or denied by other scholars upon their research regarding globalisation strategy. Examining Levitt’s View of Global Strategy Levitt (1983) views seemingly endeavoured to analyse the global markets. However, through the evaluation of other scholar’s provisions, some takeaways can be noted in his analysis. Firstly, according to Levitt (1983), consumers accept the standardisation of products except where they are of low quality with higher costs. Therefore, high-quality products and low costs can exist concurrently, are attuned, and twin identities. However, according to Aragon et al. (2017), the context of high-quality products and services, and costs are inversely proportional implying that the former only exist with high costs. In the real world market, for one to have goods and services of high quality, then they ought to part with high costs. Firms achieve high quality products by investing more in the costs of those products. Aragon et al (2017) suggest that if firms want to improve quality systematically, with time, then they can reduce their manufacturing and recall their warranty costs; therefore, cutting down their overall prices. However, Levitt suggested that quality could only be achieved with a low price through the economies of scale if the emphasis is the products that are globally standardised together with the manner in which they are produced, distributed and their marketing strategies Levitt (1983). Also, the global marketing competition plays a role in determining whether the low costs of the products could imply its high quality. Levitt (1983) states that if the lower prices of goods and services imply high quality, then the global market shall take its advantage and the demand for the standardised products shall increase across the world leading to rising in normalised markets. An example given in this regard is coca cola and Pepsi which standardised their products and got similar means where they could be globally marketed and distributed (Yuvaraju, Subramanyam and Rao, 2014, p. 128). This action led to lower costs of those products and consequently increased their demands. Therefore, the globalisation strategy sought by coca cola and pepsin companies could be attributed to the lower price of their products; hence, higher demand. Technology that backs-up the convergence has normalised across the world. Levitt 1983 provided that global corporations accept the fact that technology has facilitated the manner in which consumers have been driven towards similar demand preference and similar spending culture. Therefore, the economic realities have been enhanced implying that the economies of scale can lead to lower pricing of products and services. Levitt (1983) exemplifies the Intel corporations which are the leading in the market particularly in the microprocessor industry which has a high demand for its products and services attributed to the lower production costs. This corporation believes in a simple concept that when there is a high production volume, then there is much likelihood for the efficiency to increase as well. The overall outcome of such behaviour is having the costs reduced; hence, higher demand for the products and services. Consumer prefers products and services at lower prices to featuring products or huge promotions. According to Levitt 1983, the practice which was done by the multinationals of having their markets preserved while lacking imagination for the future global marketing strategy worked in making them survive but only for a short term. For example, the Red Bull company justified its survival and excellence in the global market strategy (Siminoff, 2017). The company had a competitive means at which pricing could be lowered, and promotions are done on regular basis because of its preserved marketing. However, lack of focus for the future competition and marketing strategy made the Red Bull survive for 25 years only (Siminoff, 2017). Therefore, if a firm need to survive for a long period in the market, market preservation, promotions, and long-term plans ought to be integrated all together. Levitt (1983) suggested that corporations should not assume that customers know all their wishes. Also, provided that customers agree to a given product not because they wished for it but because that product can solve their needs at that particular time and have been friendly priced and promoted in the right manner. Sony Ericson Walkman is an example of firms which faced negative report before it was launched (Levitt, 1983). However, after it was launched, the company acknowledged that there was a need for brand potential and an opportunity to differentiate its products from others’; hence, making its brand a hit among people of all age-groups. Here, the success realised by the company was not based on its marketing strategy but on pure perception and the fact that it realized the opportunity to promote its brand. The perception of Levitt is that the world is congregating to a normalised market whereby the global corporations can have huge markets with suitable homogenous products. His theory of global strategy is that the corporations failing to adapt to the new global-reality could be rendered to suffer global competition (Levitt, 1983). This case is the global competitor will standardise its products with constancy to a point where all possibilities to retain the products are exhausted, reinstated, and all its resources deviated. Therefore, for corporations and multinationals to survive the global market, there is a need for them to normalise their products and always change their global strategies with constancy. Giles (2017) provides that globalisation converging the economy is not in justification to an entirety since other factors such as Brexit hint towards dragging back the roots and shells of protecting the national interests. Counties want to protect and preserve their cultures and resources; hence, other policies are rolled out to facilitate the perseveration of cultures and resources (Giles, 2017). However, Canada ‘post-national’ country approach is in contrary to rolling out those policies because of what the country believes to be an inconsistency with the global marketing strategy which may negatively impact the entire global market. The Trump’s ‘beautiful border wall’ separating Mexico from the US is an example of the effort that countries are seeking to protect their local resources, interests, and local rights (D’souza, 2017). Consequently, with these endeavours from individual countries and states, the idea of the global market is slowly diminishing. In fact, Eliott, (2016) suggests that the global market-economy was just an outcome of the political decisions done in the past and can be moulded by the future ones. Had it been free from political interests and other individual provisions, then the global strategy could be strived by every company. Corporations that held that global approaches could suppress the local differences were likely to be a victim of local competition. For example, Wal-Mart failed in Germany despite sticking to its strategy of having lower prices every day since it decided to overlook its cultural differences with other firms. In the US, the customer notion services differ from those in Germany (Elliott, 2016). Hence, the Wall-Mart company could have believed that the approaches used by the US could easily overpower those in Germany since it was operating in the former country. Operating under the provisions of the current country not only in undertaking the corporations’ operations in a convenient environment but also in developing strategies that could help in winning the local customers. According to Elliott (2016), brands adopting ‘do-not-touch-the brand’ perception face challenges because of the cultural and religious differences. For example, Henkel detergent Company in European nations was clashed with the economies of scale and customer preferences because of its notion of having its brand fixed regardless of the prevailing global market conditions (Levitt, 1983). Another example of such brands on Facebook in Japan which lost much of its market share in its initial stages to the rival mix because of their prevailing cultural differences. However, the Facebook brand is trying to re-possess its market glory by bringing in some modifications and in its strategy like positioning itself as a business-networking site as opposed to being a friendly-networking one (Levitt, 1983). With its new approach, there are timely updates such as declaring the safety of the people when an earthquake occurs. Everything that relates to marketing should be seen from a global perspective. The main objectives of global corporations are to win global corporations is to win everywhere. It is the idea of Levitt that considers standardization of products to fit the global market. However, the local market is inclusive and equally important. There is no reason for winning some markets and leaving some out (Handayati, 2018, p. 491). For this case, the local market is essential in every step. The issue of having a...