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In practice, the business case for a global strategy will vary with the product
category.
Economies of scope: Sometimes its cheaper to produce a range of
products rather than specialize in a handful of products.
Economies of scale: When a higher volume of production is done the per unit cost
of a product is reduced and the same product can be sold at a cheaper rate.
Global brand recognition: The benefit that derives from having a brand that is
recognized throughout the world for example,Apple,Walmart.
Global customer satisfaction: Multinational customers are provided with the best
services at various location throughout the world
Lowest labour and other input costs: These type of situation arise when in some
countries cheap labour are available as compared to other countries. For
example, computer assembly from imported parts in Thailand and Malaysia
where labour wages are lower than in countries making some sophisticated
computer parts (such as high-end computer chips) in countries like the USA.
Recovery of research and development (R&D) costs and other development
costs across the maximum number of countries New models, and new
technique or other forms of research often amounting to billions of US dollars. The
more countries of the world where the goods can be sold means the greater
number of countries that can contribute to such costs.
Emergence of new markets: Sometimes due to the emergence of new market it
may happen that sometimes the sales are increased that means greater sales
from essentially the same products.
Note: Professor George Yip argues that the business case for globalization is
strengthened by competitive pressures: the fear of some companies that they will
be left behind other companies if they fail to globalize.
FROM A TO AA COMBINATION
To manage AA strategy requires considerable organizational
and material innovation.
Companies must do more than just allocate resources and
monitor national operations from headquarters. They need to
deploy a broad array of integrated devices ranging from
structure and system to style and socialization.
ADAPTION AND AGGREGATION
P&G(Proctor & Gamble)