Challenges for Companies Competing Globally

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Table of Contents

Introduction
Discussion
Conclusion
Reference

Introduction

Companies are increasingly operating in a complex environment shaped by national borders, government policies, and cultural norms. This type of environment is not only felt at the national but also at the global level. Therefore, companies encounter a myriad of challenges including the liability of operating in a foreign country and the paradox of being consistent or failing to capture the value of their expansion when competing globally.

Discussion

Firstly, the liability of operating in a foreign country essentially implies that companies venturing outside their local territories end up being exposed to issues such as high costs that they do not incur in their home countries. As explicated by Alcer (2015), these costs are associated with regulations that favor domestic competitors and high fees for new patents and trademarks. Similarly, a company may be required to use a lot of resources in an effort to acquire qualified suppliers.

Secondly, the paradox of being consistent revolves around the need for companies to expand in new markets to create and capture value in foreign markets. The problem here is that most of these companies have the greatest advantage at home but may fail to replicate the same at the global level (Alcer, 2015). More specifically, the institutions destined to control the value of capture in relation to patents, trademarks, and copyright laws are completely local. This means that a company whose idea or product is successful in one country may find it already being used by local businesses in another country.

Conclusion

In conclusion, companies often encounter a lot of challenges in an effort to compete globally. As explicated above, some of the most common challenges include the liability of operating in a foreign country and, the paradox of being consistent. It is imperative to note that most companies that are successful in their local market may fail to replicate the same in foreign markets because the institutions meant to control patents and trademarks are predominantly local.

Reference

Alcer, J. (2015). Strategy reading: Competing globally. Harvard Business Publishing

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Challenges for Companies Competing Globally

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