project 1

As a firm contemplates on executing a global strategy, it is important to consider the availability of the resources necessary to operate globally. The primary reason why resource availability should concern a firm is that executing a global strategy requires dedication of a substantial amount of funds to market goods and services globally (Lynch, 2014). A firm, for example, must use a wide range of marketing tools to promote its products and services to the globe. Different countries have different cultures and languages (Hamilton et al, 2012). Therefore, a firm must utilize different mediums to market its products in different countries. This may be a costly endeavor. In addition to advertising costs, a firm may need to make additional investments on establishing subsidiaries in foreign countries. Establishing such subsidiaries requires a firm to have enough finances to buy or lease buildings as well as to pay for the licensing. Expatriation is also a common procedure when firms go global. Expatriation involves deploying employees from the headquarter firm to foreign branches and may cost the firm huge amounts of money (Lynch, 2014). In totality, therefore, executing a global strategy requires firms to have enough resources otherwise the strategy might fail.

Penetrating the Chinese market may be a great idea for the firm because that might lead to maximized profits in the long run. However, the firm needs to consider the resources needed to execute the strategy. One of the resource concerns for the firm would be financial availability. To effectively market the clothes in china, the firm needs to open several production units in china. This would require the firm to purchase land, build houses, and employ additional staffs to run the subsidiary (Lynch, 2014). The listed activities would cost the firm huge amounts of money. In addition to financial resources, the firm would need to consider the availability of quality raw materials in the local market. Being a new market, the firm must struggle to satisfy the needs to the customers to earn their loyalty in the long run. To achieve this objective, the firm must have access to quality raw materials to produce high quality clothes. Labor availability would also be a concern since the firm may need to employ the locals to build positive image to the public (Hamilton et al, 2012).

As indicated in the previous section, the firm needs to consider whether the resources it has will be enough to support its penetration to Chinese market. The firm must specifically assess its financial capability, the availability of raw materials, and the availability of affordable human capital. If the company finds that it has the listed resources, the decision to penetrate the market would be approved. If one or more of the listed resources is missing, however, the strategy might be rejected to avoid frustrations later on. It is important to note that executing the strategy without the previously identified basic resources would lead to losses because the firm may have to make huge initial investments (Hamilton et al, 2012). Such investments would be accounted as losses which would affect its financial stability.

China is one of the countries with the fastest growing economies in the world. The speedy growth of the country’s economy presents an opportunity for the firm to exploit the market (Lynch, 2014). It is important to note that a strong economy implies that the citizens have enough money to spend on luxurious goods, such as, clothes. The population of china is also high which may support the growth of the clothing industry. However, for the firm to realize positive competitive advantage, it has to produce high quality goods and sell them at affordable prices. High quality will differentiate the product from others in the market. The firm will need to satisfy the needs of its consumers and use their unique capabilities to address the needs of its market. The firm must utilize technical expertise and recruit experienced personnel in order to outsmart the rival Chinese firms. Additionally, it has to remain innovative and also invest in research and development to identify the needs that are not satisfied by the existing firms.

Hamilton, S., & Zhang, J. A. (2012). Prologue. In Doing Business with China (pp. 1-5). Palgrave Macmillan UK.

Lynch, R. (2014). Five key resources for building a global strategy. Retrieved 22 February 2017 from http://www.global-strategy.net/five-key-resources-for-building-a-global-strategy/