Can the global strategy be used for service industries?

Essay by Davelawrence2000University, Master'sA+, October 2003

download word file, 4 pages 4.8 1 reviews

Can the global strategy be used for service industries? Yes. A well-designed global strategy can help a service industry type firm to gain a competitive advantage. This advantage can arise from the following sources: Economies of scale from access to more customers and markets, exploitation of another country's resources, such as labor, raw materials, exchange rates, import duties, tariffs and taxes. Strategically, a service industry type firm could also capitalize on being the pioneer or first entrant into a new market. Prior planning and thorough due diligence will identify the macroeconomic risks, as well as potential operational and political risks. Additionally, the firm will acquire learning opportunities that arise due to diversity of operating environments internationally and will also benefit by reputation in that crossover customers between markets, such as business travelers, as well as brand identification and loyalty similar in nature to highly successful existing brands within the market.

Krispy Kreme is planning its initial attempt at global expansion. The company has entered into a partnership to facilitate this quest. The terms of the deal will provide the U.S. based corporation with a thirty-four percent share in Krispy Kreme Doughnuts Eastern Canada, Inc. Scott Livengood, president and chief executive officer said, "Hiring Don Henshall at this early stage gives us the opportunity to refine our global strategy and develop the capabilities and infrastructure to support expansion outside the U.S.". He was additionally quoted as saying "It is also important to point out that we are structuring the organization in a way that ensures no loss of focus on our domestic market opportunities." John Glass, an analyst who tracks the company for Deutsche Bank said "the company would do well as long as Krispy Kreme keeps its focus on North America, where opportunities are best".

This is one example of...