Question

:-. 으.B- LNormad 1 No Spac Heading 1 Heading 2 Title Subtitle Subt agraph Styles What effects on company trategy have you observed as a result of global economic performance? Do you feel the global economy is on the rise or on a decline? Why is strategy important?

Answer 1

The Global economy got a major blow in 2008 due to Recession phase. Post that, many countries derailed and were struggling to recover. Since, we live in phase of Globalization where all entities are connected to each other, the global economic performance has high impact on company's strategy. Some of the effects I have observed are:

• High focus core operations - The company moved from philosophy of Vertical integration to focusing on core work so as to focus all energy in the strength and outsource secondary work. It also helps to reduce cost
• Product portfolio diversification - The companies are diversifying so as to reduce the risk and dependency on single or few product
• High focus on optimizing cost - The purchasing power of people has not improved due to which for sustaining the margin, companies are focusing on optimizing supply chain and reducing cost

I feel global economy is on a decline as lots of countries are struggling to achieve the economic growth year on year. There are declining GDP values, increasing un-employment etc. leading to negative environment.

Strategy is very essential as:

• It helps to prepare in advance for unforeseen situation
• It helps to control the outcome or output and protect company from market fluctuation
• It ensures sustained growth and profit and challenging situation