Strategic Management Essay Example on the Car Toys Company

Published: 2019-11-11
Strategic Management Essay Example on the Car Toys Company
Type of paper:  Essay
Categories:  Company Strategic management
Pages: 5
Wordcount: 1201 words
11 min read

The notion of International Strategic Management is drawn from the concept of Strategic Management on the highly dynamic global-business environment of the contemporary world. It looks at every business from the international context (Harris & Wheeler 204). As such, the growing trends in globalization, coupled with the increasing free-trade agreements among countries have finally introduced a new platform of opportunities, within which different companies or industries expand their activities globally, and at own will. This theory helps in the understanding the challenges that confront global managers, their respective companies, and how they deal with such issues. The concept of international strategic management thereby focuses on the understanding of how best different companies can utilize their international strategies in building and upholding their competitive edge; a competitive advantage in the international perspective. According to Lu (197), strategic management from the global setting is the competitions among industries or companies, which extends beyond the national borders among businesses of different national bases, and taping into the strategic resources from more than a single location. This paper thereby conducts an analysis of the theory, and how it can be implemented by the Car Toys Company in their operations.

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Car Toys Company is an American-based retail company that deals in the retails, storage and/or selling of automobile-based products and electronics. Its retail products include car-video systems, audio components, car stereo products, speakers, amplifiers, subwoofers, car alarms, driver assist and safety equipment, remote starting products, signal processors, GPS navigation, satellite radios, navigation systems, security systems, marine audio products, radar detectors, alongside wireless phones and wireless plans. The company was founded by Dan Brettler in 1987 at Seattle, which still serves as its headquarters. As well, Mr. Brettler still serves as the companys CEO to date. It currently operates approximately 50 medium-sized chain stores, fairly distributed throughout Texas, Washington, Colorado and Oregon. Aside from these operational locations, Car Toys also retail its products online via its website. Apart from the retail products sold at its stores, the company also specializes in the provision of advice and installation services. The company works in close collaborations with four national courier companies including Boost Mobile, AT&T, Verizon Wireless, and T-Mobile. Currently, Car Toys Inc. operates with slightly more than 1,000 employees, all of whom work at the corporate headquarters alongside the distributed retail centers or stores. According to Jones and Coviello (298), the retail company specializes on a wide range of mobile electronic products, while primarily focuses on the sales of automobile audio equipment along with wireless phone devices.

Being a U.S. based company, Car Toys has involved in a number of international trade agreements through which it intends to employ its international strategic management initiatives. In that respect, the company involves in bot direct and indirect importation of automobile-based products and electronics from other countries such as Germany, Japan, and the UK among others. Direct importation in this respect occurs when the buyer (in this case Car Toys) contracts the seller to within the international market to arrange for the items to be imported. On the other dimensions, indirect importation results when the buyer considerately uses other international market participants to help in the process of importation.

Considering the opportunities and threats as part of the companys SWOT analysis, Car Toys has the opportunity of broadening its base through extending its stores into other countries where the automobile companies thrive. For instance, the car manufacturing industry is continuously on the advancement as new technologies, knowledge and skills emerge. Millions of automobile are manufactured every year, and this presents the opportunity of making more supplies that will suit the increasing demand for the automobile and related phone products. Therefore, Car Toys retailers have a greater opportunity of globalizing their products through extending their operational areas. As well, the growing technological skills presents a great opportunity through which the company can create a platform for improving their installation skills. The existence of FDI (foreign direct investment) policies is another fundamental protective tool that comes in with the opportunity of freedom of operation in any foreign country. Car Toys can thereby spread its branches into other nations with very limited restrictions. This policy defines a companys ownership, operation and active control of component organizations in other countries (Johansson & Vahlne 27). Additionally, the company may directly or indirectly enjoy the opportunities that arise due to the sovereignty status of its host country the U.S. For instance, it was a sovereign interest and opportunity to the U.S based businesses when the U.S. revoked the threat of Normal Trade Relations with China on the importation of goods into the U.S. in order to forcefully minimize the rampant human rights violation.

On the other hand, Car Toys retailers are also confronted with high intensity threats arising from competitors. Here, the growth of automobile industry does not only present opportunities, but also comes with grave threats to the retail business. As the industry advances, different companies in different nations come with new technological ideas for the modification of automobile products. This would thereby make it very challenging for the company to retail in the automobile products which do not suit another countrys make. For instance, the American-based Chevrolet or Cadillac Manufacturers could manufacture audio products or car-video systems specifically meant to suit only their company products, and cannot fit into German based Audi, BMW and Mercedes-Benz automobiles, or Japans Toyota. This is thereby a key threat to the companys retail business. Moreover, due to the diversity in the automobile-based products and electronics, there could be other established suppliers in the market who can retail the same items to similar target audience within the market. As well, there could be government policies, legal laws, and cultural or religious practices that restricts the introduction of its operations into other nations, hence hindering the companys anticipated global growth.

In essence, the major reason why Car Toys should embrace the concepts of International Strategic Management is in order to enter into a more favorable and highly competitive market, which is characterized fast growths, high profitability, alongside fair governmental regulations and favorable political climates. Once set into the strategic act, the Car Toys Company will be able to reach new customers easily, gain fair access to the low-costs of material and labor markets, spread the business operational risks across a broader base, and enjoy the inherent benefits that comes with the locational advantages (Lu 212). In conclusion, embracing the concepts behind the international strategy management in any company allows it to broaden its operational areas, get a share of the global ideas, spread the risks, and enhance its competitive advantage within the competitive global market. It is all what every global company may require to thrive within the global arena.

Works Cited

Harris, S., & Wheeler, C. Entrepreneurs Relationships for Internationalization: Functions, Origins and Strategies. International Business Review, 14:2, (2005), 187207.

Johansson, J. & Vahlne, J. E. The Internationalization Process of the Firma Model of Knowledge Development and Increasing Foreign Market Commitments. Journal of International Business Studies, 8:1, (1977), 2332.

Jones, M. V. & Coviello, N. E. Internationalization: Conceptualizing an Entrepreneurial Process of Behavior in Time. Journal of International Business Studies, 36:3, (2005), 284303.

Lu, J. W. The Evolving Contributions in International Strategic Management Research. Journal of International Management, 9:2, (2003), 193213.

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