Compare & Contract Global Mentality with Transnational Mentality

1. Compare & contract Global Mentality with Transnational Mentality.

The Global Mentality refers to that the companies create products and analyze units standing on the position of world, not just individual national market, as its targets. The transnational mentality is an approach that the companies become more responsive to local needs while capturing the benefits of global efficiency because of the emerging requirement of companies. For global strategic mentality, the companies exploit parent-company knowledge and capabilities through worldwide diffusion and adaptation. And it focuses on adapting their products and service to global market. However, the transnational mentality include characteristics of multinational, global, and international mentalities, so the transnational companies led to organizations flexibility and still retain the competitive effectiveness and economic efficiency simultaneously.

1. Define both scale and scope economies and discuss their impact on a company’s attempts at global integration and coordination.

The cost advantage of the scale economies arises with increased output of a product, which means the more products of one type, the more profit. The cost advantage of scope economies is firms provide a variety of products rather than specializing in the production or delivery of a single output, which means the more kinds of products, the more profit. So, scale economics concentrates on one specific product contrast with the scope economics concentrates on many kinds of products.

Under the impact of global integration, companies have the chance to combine intermediate processes into one specific plant and develop technologies to achieve low-cost volume production. The low-cost products are one of the reasons that a company becomes more competitive. When the output exceeds the countries’ needs, companies will find a new market outside their home to retain competitive. Of course, this action will lead to the global integration and coordination inversely. Therefore, under the influences of the global integration and coordination, some companies will become bigger and may become the monopolistic companies.

1. Identify and describe the 3 strategic tasks involved in gaining worldwide competitive advantage.

Because industry and company’s strategic position are always changing for worldwide companies, there are 3 strategic tasks that are defending worldwide dominance, challenging the global leader, and protecting domestic niches. First, defending worldwide dominance is the core competency of a company which requires them concentrate on defending and reinforcing existing assets and capabilities. When the corporation develop the new things which means they need to give up the old one. Secondly, challenging the global leader is that the company expands their toehold to a foothold through limited and carefully selected expansion along both the product and geographic dimensions and through extending the step-by-step improvement of both cost and quality to this expanded portfolio. At last, in order to protect the domestic niches from worldwide players with manage resources and many sources of competitive advantage, protecting domestic niches is by jointing with a viable global company to defend against, offset and approximate the competitor’s global advantage.