1. Standardization is the process used by the companies to develop, maintain and promote different type of high standard technologies and processes within the business organization. Format war on the other hand is stated as a situation in which every company competes with each other in the market to take up dominance over the other. Standardization is related to format war because it is only through standard technology and processes a company can effectively compete in the market with its competitors and succeed in getting dominance over other companies. Thus, standard technology play vital role in achieving competitive advantage (Myatt et al. 2014).
2. Standardization that occurs in the technology and processes of the company have a beneficial effect on the company. Some of the advantages of standardization a company can achieve are:
- Help the company to achieve competitive advantage over others
- Helps in reduction of cost of the processes of the organization
- Helps in attracting and retaining good quality suppliers for the company
- Helps in retaining and attracting customer traffic
- Leads of strategic alliances between companies
- Facilitate research and development by the company
- Helps the organization to be well informed about its competitors in the market
- Reduction in inconsistency
3. Format war takes place when number of competing companies tries to compete with each other with the aim of taking dominance over each other. During this process, a war takes place among these organizations selling similar product to an equivalent group of customers. However, in the environment of tough competition there can organizations that alter the price irrespective of competitors and try to attract customer traffic. This in turn influences other customers to alter their price as well. This leads to a price war in the market where every company tries to reduce the price in order to capture the market share (Vecchiato 2015).
4. First mover is the one that enters the market first with the product and has the chance of getting long-term benefit from the market and will survive for longer period. Second mover o the other hand refers to the innovation that the first mover takes to improve their product and service with the aim of gaining maximum market share in the market. Both the mover interact in the market, as the second one is the innovative version of the first mover. It is only through initial move of the first person the future innovation takes place (Blanco et al. 2014).
1. Company in today’s world aims to expand their business globally in the international market due to various reasons such as:
- Domestic sales has got saturated than the past and markets are small
- New opportunities and challenges in the international market
- Facilitate brand recognition and expansion
- Facilitate fast growth that the company does not achieve in the domestic market
- To compete successfully in the industry with fast growing competitors
The company expands due to number of reasons; however, the penetration channel that the company should use to penetrate in the global market is the online marketing channel such as social media. This is because social media is expanding very fast worldwide and is the easiest way to reach the customers sitting globally (Gollnhofer and Turkina 2015).
2. The company gets the additional benefits from it global expansion by entering an economy with huge economies of scale. Firstly, it will be able to use the technology and research and development achievements of the country. Secondly, the company will be able to charge higher price for the product according to the living standard of the people in that country. High living standard will help the company to charge premium-pricing strategy in that country. Thus, the company can gain these benefits by expanding globally from the economies of scale of other countries (Hill et al. 2014).
3. The strategies the company can use while planning to expand globally are:
Perform a due diligence of the global market. It is important because it helps in preparing market segmentation, gap analysis, strength, and weaknesses it might face.
Develop a business plan, as it will help the company to analyze its finance, its risk level and the estimated revenue it can make.
Product readiness is another strategy as it helps it analyzing the acceptability rate of the product and the chances of success.
4. The company can take entering modes in order to expand globally in other countries and become successful in it. First strategy is to form a merger with the already existing company in that industry of other country. This will help the expanding company to know about the customer trend, the living standard and take advantage of economies of scale of that acquired company. However, it will also have to solve the diseconomies of scale of the acquired company. Other strategy is entering through online channel by creating a social media page for itself. This is because social media usage is increasing drastically and thus this strategy will be helpful. However, it might happen that social media does not help in conveying the right message and image of the company in front of the people (Malhotra 2014).
Blanco, M., Engelmann, D., Koch, A.K. and Normann, H.T., 2014. Preferences and beliefs in a sequential social dilemma: a within-subjects analysis. Games and Economic Behavior, 87, pp.122-135.
Gollnhofer, J.F. and Turkina, E., 2015. Cultural distance and entry modes: implications for global expansion strategy. Cross cultural management, 22(1), pp.21-41.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Malhotra, Y., 2014. A Risk Management Framework for Penetration Testing of Global Banking & Finance Networks VoIP Protocols.
Myatt, L., Redman, C.W., Staff, A.C., Hansson, S., Wilson, M.L., Laivuori, H., Poston, L. and Roberts, J.M., 2014. Strategy for standardization of preeclampsia research study design. Hypertension, pp.HYPERTENSIONAHA-113.
Vecchiato, R., 2015. Creating value through foresight: First mover advantages and strategic agility. Technological Forecasting and Social Change, 101, pp.25-36.