The Benefits of Transnational Strategy and Organization of Philips

With the increase in globalization and consequently the expansion of trade among countries, that has been facilitated by technological advancements, there is a need for the adoption of a good business strategy. Various commercial activities take place between different countries and the venture into foreign markets require an appropriate business layout (Bartlet & Beamish, 2018). Most firms that are active in international trade are private and their main aim, unlike government corporations, is to actively participate in the competition and make as much profit as possible.

Q1. Analyze the benefits of the transnational strategy and organization of Philips

Coordination brought forth by application of a stable strategy helps companies amass more profit. This is achieved through the increase in demand for products in foreign markets. The interaction among foreign countries and blurred boundaries increase the access to foreign funds which aid in production and business expansion (Beamish & Bartlet, 2018). By fostering good international relations this strategy, Philip can receive monetary favors like discounts in individual countries.

Q2. Analyze whether electronics should follow a global or a multinational strategy and organization

Electronic companies will have more profitable returns through the global strategy. Manufacture of the main commodity by the parent company ensures that originality is not compromised. By making individual countries adhere to the set standards, manipulation that result in different outcomes can be avoided (Hill, 2017). Furthermore, the company’s identity is maintained and stands out because every practice in individual country’s market is consistent with the main firm. More profit may be realized due to non-interference of the commodity by locals and the reduced expenses of establishing separate firms.

Q3. How does a transnational organization benefit Philips in terms of their organizational resources supporting their competitive and growth strategies?

The transnational organization promotes interdependence between firms of different countries (Beamish & Bartlet, 2018; Hill, 2017). Acquisition of foreign funds makes it possible for Philips to expand its production and businesses.  Capital investments in foreign markets which is made possible by this organization help businesses to expand structurally and economically. The company is able to compete favorably with local firms which shun venturing internationally.

References

Bartlett, C. A., & Beamish, P. W. (2018). Transnational Management: Text and cases in Cross-border Management. Cambridge University Press.

Hill, C. (2017). International Business: Competing in the global marketplace. Strategic Direction, 24(9).