Business Strategy in the Age of Globalization Part 1
The industrial climate and opportunities for commerce today are akin to those, which prevailed, in the early days of the Industrial Revolution (Hamel, and Prahalad, 1994). Fundamental changes in the nature of opportunities and in the intensity of competition as well, call for new approaches to the formulation and execution of business strategy.
Some sectors of the industry are more affected than others, but basic changes in the ways of conducting business abound everywhere (Hamel, and Prahalad, 1994). Fields such as nanotechnology, new materials, and genetics, have created entirely new opportunities, but some traditional sources of revenue are threatened by obsolescence as well.
Globalization pervades the modern business strategy scene (Hamel, and Prahalad, 1994). Few organizations can remain isolated and plan to do business exclusively in their own backyards. Their fortresses are under attacks from foreign entities, but there are also many new fields to be conquered afar. Certainly, the modern business cycle must involve nations other than the traditional ones in which wealth was built over the past century.
Opportunities have replaced entrenched market shares as new markers for success (Hamel, and Prahalad, 1994). Executive teams have to develop new competencies and structures to retain their business strategy directions. New templates of business success wait in the wings, and it is time to discard old notions, which are like cobwebs of the mind.
Business Strategy Options in China
One would expect that location should not matter in a global market place with Internet connectivity: strangely, this has not happened, and location continues to occupy a vantage point in the business strategy domain (Krugman, 1994). A major if not a main base in China is now virtually a norm for the most successful enterprises of this millennium (Krugman, 1994).
Labor productivity is at the heart of the business strategy process of all modern and progressive corporations: China is the first name, which comes to executive minds when discussions and thoughts turn to labor productivity. The third world has other options for low labor rates, but China stands head and shoulders above the rest when it comes to a reliable source for mass production.
Abundant natural resources are other reasons for business strategy exercises to gravitate towards China (Krugman, 1994). The subterranean wealth of this vast country and its territorial waters is not entirely known, but certainly the country is blessed with vast reserves of deposits of great industrial values.
It is not as though China is a mere sourcing base. It is also a massive market for both manufactured goods and sophisticated services of all kinds. Though some social activists raise vocal concerns related to environmental conservation and human rights, the indigenous demand of China, in pure business terms, is worthy of sustained marketing investments. No corporation can hope to sustain an important worldwide presence any longer without a substantial role for China.