Dominic J. Caraccilo
May 19, 2013
Thesis: This paper explores companies that are noted for their best practices in engagement with the global economic environment. I have conducted extensive web research to analyze these companies in some detail. The overview and conclusion have a number of strategic insights. The main body includes a helpful discussion on the practices of the retail giants Walmart and Amazon.com. In this paper the areas I cover include: 1. Best practices areas as they relate to these global economies 2. Similarities that are present for each company as they engage in the global environment 3. What the major differences are for each of these companies
An optimal way to view how companies successfully compete in the global world economy is to use concepts learned in this course from which to view how well they interact and flourish internationally. These concepts include [International Economics]: 1. The fluctuation of currencies 2. Trading agreements and policies to include barriers 3. Macroeconomic systems 4. Exchange rates 5. Environmental requirements 6. Labor rules and outsourcing 7. Supporting Financial Institutes and their impact on companies 8. Economic theories such as OLI and Ricardian model, and their exploration on issues of comparative advantages.
These lessons are important because by reviewing these areas they provide a clear understanding of how to operate in a corporate world. The interconnectivity of the world economy and how it impacts companies will show how well companies may or may not succeed.
Other factors inferred in how companies succeed include: 1. The Enhancement of Competition 2. Use of Technology 3. Management styles 4. Institutional policies
In a world where the internet, cloud and mobile technologies have eliminated the barriers of communication and collaboration across borders, oceans and time zones, project-centric organizations are increasingly mining the world for the best talent to deliver quality goods and services [Stolovitsky]. With this omnipresence and ubiquitous collaboration comes a global reaching capability of some of the largest Multi-national Companies (MNC) in the world. Rank | Company | Revenues
($ millions) | Profits
($ millions) | 1 | Wal-Mart Stores | 421,849 | 16,389 | 2 | Royal Dutch Shell | 378,152 | 20,127 | 3 | Exxon Mobil | 354,674 | 30,460 | 4 | BP | 308,928 | -3,719 | 5 | Sinopec Group | 273,422 | 7,629 | 6 | China National Petroleum | 240,192 | 14,367 | 7 | State Grid | 226,294 | 4,556 | 8 | Toyota Motor | 221,760 | 4,766 | 9 | Japan Post Holdings | 203,958 | 4,891 | 10 | Chevron | 196,337 | 19,024 |
Figure 1: Top Ten Worlds Biggest Companies [Global 500]
Figure 1 show a list of the ten biggest companies in the world. The rise of the United States as the supreme economic power has also seen the rise of American management thinking. A characteristic of American management is its preparedness to put ideas into practice in an effort to improve performance [Best, p.65].
What is interesting is that most issues in competitive strategy that apply to domestic companies apply also to companies that compete internationally. However, the following are the four strategic best practices unique to competing across national boundaries: 1. Customizing the company's offerings in each different country market to match the tastes and preferences of local buyers or offer a mostly standardized product worldwide.
2. Employing essentially the same basic competitive strategy in all countries or modify the strategy country by country to fit the specific market conditions and competitive circumstances it encounters. 3. Deciding if to locate the company's production facilities, distribution centers, and customer service operations so as to realize the