The internet has accelerated the pace of globalization by enabling vast improvements in communication. The companies are able to reach wider market segments due to rapid dissemination of information and have become more efficient due to increasingly mobile factors of production. The opportunities have not emerged without challenges because global markets greatly vary in consumers’ lifestyle, tastes, cultures, expectations, and value perceptions. Serving a more diversified consumer base profitably requires a greater understanding of the underlying factors that shape the consumers’ purchase decisions.

As the factors of production have become increasingly mobile, it’s difficult if not impossible to remain competitive on the basis of cost advantages alone. Companies’ competitive advantages arise from traits or skills that are difficult to imitate and unique to the company. These competitive advantages not only promote brand loyalty but also give companies some degree of control over the price of their products in the face of the competition. Thus, companies that are aiming to expand their operations on a global scale have to figure out how to develop new core competencies or leverage the existing ones to ensure success as well as sustainable profitability. The core competencies could be product, service, or the production process. GM ruled the global auto industry for 76 years as the largest automaker until 2007 when it was dethroned by Toyota. Historically, GM has managed its brands on regional basis. The company realizes the new global nature of competition and has redesigned its product development process in such a way that each regional center will develop global strategy based on its core competency. For e.g. South Korean subsidiary with its expertise in small cars will devise strategy for small cars and U.S. facility may devise SUVs strategy to be implemented on a global scale (Townsend, Cavusgil, & Baba, 2010).

Companies should also ensure that they cultivate an organizational culture that welcomes changes, diversity of ideas, and continuous innovation to rapidly adapt to changing competitive environment as well as diversified consumer groups. An organization culture is a set of behaviors, values, and beliefs that guide the company’s everyday business conduct. Organizations that are resistance to change or employ uniform business policies on a global scale may find themselves out of touch with local needs and unable to compete with competitors that meet consumers’ expectations more effectively. In addition, the organization’s ability to have a reliable global network of partners such as suppliers, distributors, and marketers also greatly impact the success of product and services. An organization’s inability to meet consumers’ demand also hurts its image in quite the same way as an organization that faces low demand for its products. One of the essential components of product success is to make it available at places and in quantities that the market expects. Sony learnt lesson the hard way when it failed to accurately estimate the expected demand of its newly launched Playstation 3 console in 2006. Sony not only failed to meet Christmas Holidays demand in the U.S. but also had to delay its European launch. The mistake not only benefitted its competitors Microsoft and Nintendo but also hurt its partners such as Electronic Arts that developed games for the Sony game console (Takahashi, 2006).

The firm should also ensure that it has a reputable brand or at least willing to develop one. Many consumers’ perceive product quality on the basis of brand and are hesitant to purchase brands that fail to meet their quality and value perceptions. In addition, established brands often act as barriers to new entrants and thus, brands go a long way towards accommodating entry into new markets. In addition, the firms can’t ignore the quality of human capital when services are increasingly dominating the economies of developed countries and are becoming useful tools to achieve product differentiation. In addition, firms have also been forced to understand local market needs due to high competition which may require the recruitment of high quality local workers that understand their cultures and consumers better than the management at the headquarters (Calantone & Griffith, 2007). McDonald’s may be the market leader in the U.S. but KFC is the winner in China. KFC entered China earlier, was the first to introduce local offerings, and today operates more stores in the country than McDonalds.