By: Craig W. Roggow
Best Practice Companies in Global Strategic Management
In the modern day corporate sector, strategic management is among the most significant perspectives for business organizations. Strategic management encompasses the establishment of a plan that serves caters for all operational aspects within an organization. Global strategic management applies to organizations with business interests across the globe. It is considerably complex for a multinational entity to achieve success without implementing an effective framework for global strategic management. As a leading retail chain, Wal-Mart is an excellent example of a best-practice company in global strategic management. This also applies to PepsiCo, a leading beverage firm. The exemplary frameworks for global strategic management have been influential in the success of Wal-Mart and PepsiCo.This article encompasses an evaluation of both firms as best-practice companies in the field of global strategic management.
Objectives of the post
- Identify what these best-practice companies do within global strategic management.
- Define the similarities between Wal-Mart and PepsiCo.
- Describe major differences between Wal-Mart and PepsiCo.
- Critique Wal-Mart and PepsiCo best practices.
- Explain how to implement best practices.
PepsiCo is famed across the globe most notably for being Coca-Cola’s main competitor. In the soft drink sector, only Coca-Cola can boast of a better market share than PepsiCo. The company’s success in the United States has been replicated in other markets across the globe. As a major multinational entity, PepsiCo has a foothold in all continents. This exemplifies the firm’s extensive involvement in international business. Although the firm’s success can be attributed to numerous factors, is framework for global strategic management has been an outstanding pillar.
The implementation of an effective global strategic management framework is evident at PepsiCo in numerous ways. Firstly, this firm has streamlined its human resource framework across the globe (Martin, 2010). On a day to day basis, this firm depends immensely on its workforce to attain its targets. This would not have been possible in the absence of an effective global management strategy.
The company’s framework for international expansion is another attribute that exemplifies its effective framework for global strategic management. With thousands of outlets in the globe, the firm has achieved an excellent market share. These perspectives are justification of PepsiCo’s pedigree as a best-practice company in global strategic management.
On the other hand, there are numerous attributes that present Wal-Mart as a best-practice company in this field. The company’s excellent framework for recruitment and maintenance of employees is renowned globally. Through an effective workforce, the retail chain has become among the most admired firms in the globe. The fantastic human resource systems apply to all Wal-Mart outlets in the globe. The different responsibilities of the company’s employees have also been streamlined through an effective inventory system (Hill& Jones, 2012). This has enhanced their outputs and also the company’s framework for innovation management.
As best-practice companies in global strategic management, both firms are extremely useful in this study. Firstly, they provide an excellent platform for implementing strategic management plans on a global scale. Although some strategic management initiatives might be effective at the national level, the situation might be considerably complex at the international stage. This accentuates the significance of examining both firms as best-practice companies. Additionally, both firms are prime examples or models for any corporate entity that intends to venture into international business.
The frameworks used for global strategic management in both firms are characterized by numerous similarities. Firstly, it is evident that both firms have been largely successful in their respective fields. Both companies have an expansive employee base that stretch across the globe. Such an attribute is rare in local firms irrespective of the sector. This perspective forms the basis of exemplifying the similarity between both firms. The second aspect of consideration with regard to similarities pertains to the development and implementation of business strategy.
The business strategy for both firms is characterized by a global perspective (Sadler, 2003). In essence, this approach facilitates for the companies’ performance at the internal scene. The emphasis on retail-based business is also an outstanding aspect that highlights the similarities between both firms. Through retail chain, the companies significantly minimize the business risk that characterizes international operations of any multinational organization. All these perspectives highlight the similarities between PepsiCo and Wal-Mart in terms of global strategic management.
Despite the numerous similarities between PepsiCo and Wal-Mart, there are also various aspects that exemplify the difference in the global strategic management framework used in both entities. Firstly, these firms have different approaches towards the incorporation of technology in their platforms for global strategic management. For instance, Wal-Mart has an excellent technological mechanism for global strategic management (Martin, 2010). This firm has implemented the current information systems platforms within its framework for strategic management. In sharp contrast, the situation is different for PepsiCo. Despite the company’s success in internal business, it does not have a comprehensive framework for technological integration. In essence, this has been an influential aspect towards the company’s slow performance as compared to Coca-Cola.
The employee reward and motivation schemes used in both companies are also characterized by differences. Wal-Mart is globally recognized as a firm that has an excellent mechanism for motivating employees. The rates of employee retention at Wal-Mart are considerably high compared to PepsiCo. Wal-Mart’s excellence in employee motivation has been instrumental towards the company’s increased success at the international scene. In contrast, the employee reward system at PepsiCo does not necessarily encourage hard work from the employees. Consequently, this undermines the company’s performance locally and also internationally.
The promotional strategies employed by both firms are also extremely different. In order to implement an effective global strategic management framework, it is fundamentally vital for organizations to establish a comprehensive marketing framework. In line with this perspective, PepsiCo has been vigorous in the establishment of a vigorous platform for promotions. Additionally, this company employs numerous tactics for streamlining its promotional mechanisms at the international scene. On the other hand, the marketing framework for Wal-Mart has not been vigorous (Brown& Turner, 2008). From a different perspective, it is essential to pinpoint the different production lines evident in both firms. On its part, Wal-Mart specializes in retail chain. In contrast, PepsiCo specializes in the production and sale of soft drinks and other beverages. Consequently, the line of production highlights the difference between both business entities.
The best practices for PepsiCo and Wal-Mart are characterized by numerous strengths and shortcomings. On its part, Wal-Mart has done incredibly well in the development of an effective mechanism for rewarding employees. In essence, this is an essential perspective towards the attainment of success in international human resource management.
For any organization, employees are extremely essential towards the realization of different organization goals. This has been the case for Wal-Mart for many years. Due to such exemplary strategies, the company has also been consistently ranked in Forbes list of the most admired firms (Briscoe& Claus, 2009). This is a manifestation of the company’s excellent internal management systems. Apart from effective human resource management platforms, another outstanding aspect of Wal-Mart’s strategy is the increased implementation of modern technological platforms. The framework for innovation systems at Wal-Mart is characterized by the current technological innovations. For instance, the company uses radio frequency identification standards extensively. This has been influential in enhancing the efficiency of operations in the company’s global operations.
Despite these advantages, the company’s global operations are characterized by ineffective promotional tactics (Hill& Jones, 2012). For instance, the marketing framework for Wal-Mart has not been as aggressive as other firms in this sector. Consequently, this has considerably dragged down the performance of the firm in the global scene.
Although PepsiCo has had excellent performance in recent years, the company’s global strategic management framework is characterized by various weaknesses. Firstly, the firm’s mechanism for technological integration has not been effective. This has undermined the company’s potential in international business. Another shortcoming of the company’s strategic management framework for international operations is the ineffective employee reward system. Whereas other firms invest extensively in motivating employees, PepsiCo has not streamlined its framework for human resource systems (Ireland, 2009). This should be an area of priority for the firm’s executives.
The implementation framework of best practices is extremely influential towards the performance of corporate organizations. In the development of such a framework, the integration of all stakeholders is extremely crucial. As the CEO, the involvement of all stakeholders would be vital in terms of mitigating potential conflicts. From a different perspective, the involvement of different stakeholders would also contribute immensely towards enhancing the quality of decision making. This is largely because of the insightful contributions by different individuals.
The use of the experience curve would serve as another pertinent framework of consideration while developing the implementation framework for best practices. In essence, the experience curve represents an excellent platform for tapping on the experience of different senior executives in the organization. A comprehensive cost-benefit analysis framework is another pertinent perspective with regard to the implementation of best practices. The cost benefit analysis helps in assessing the potential implications of different decisions or plans. Through such an approach, the attainment of operational efficiency in an organization is easier. It is also fundamentally essential to ensure that the implementation framework aligns with the different policies of an organization. This facilitates for the maintenance of stability within the organization’s internal and external operations.
The exemplary frameworks for global strategic management have been influential in the success of Wal-Mart and PepsiCo. As a major multinational entity, PepsiCo has a foothold in all continents. This exemplifies the firm’s extensive involvement in international business. Although the firm’s success can be attributed to numerous factors, is framework for global strategic management has been an outstanding pillar. On the other hand, there are numerous attributes that present Wal-Mart as a best-practice company in this field. The company’s excellent framework for recruitment and maintenance of employees is renowned globally. Wal-Mart’s excellence in employee motivation has been instrumental towards the company’s increased success at the international scene. In contrast, the employee reward system at PepsiCo does not necessarily encourage hard work from the employees. Apart from effective human resource management platforms, another outstanding aspect of Wal-Mart’s strategy is the increased implementation of modern technological platforms.
- Briscoe, D. and Claus, L. (2009). International human resource management, Routledge: New York, NY.
- Brown, D. M. and Turner, P. (2008).The admirable company, Profile Books Limited. Hill, C. W. and Jones, G. R. (2012).Strategic management: An integrated approach, Cengage Learning: Mason, OH.
- Ireland, R. D. (2009). Strategic management: Competitiveness and globalization, South-Western: Mason, OH.
- Martin, T. F. (2010). Strategic management, South-Western: Mason, OH.
- Sadler, P. (2003). Strategic management, Kogan Page: Sterling, VA.