chapter 7: strategies for competing in international markets

now let move to chapter 7: strategies for competing in international markets.

there is several reason why companies decide to enter foreign market:

why competing across national borders makes strategy-making more complex: 

1. porter's diamond of national competitive advantages

   

     2. locating value chain activities advantageously

    

   3. the impact of government policies and economic condition in host countries

    4. the risk of adverse exchange rate shift

strategic option for entering and competing in international markets.

1. maintain a national product base and export goods to foreign market.
2. license foreign firms to produce and distribute the company product abroad.
3. employ a franchising strategy.
4. establish a subsidiary in a foreign market via acquisition or internal development.
5. rely on strategic alliances or joint ventures with foreign companies.

there is three main strategic approaches in competing internationally.

multi domestic strategy 

it strategy is matches to local market needs- think local, act local. different country strategies are called for when

• significant country-to-country differences in customer need exist
• buyers in one country want a product different from buyers in another country
• host government regulations preclude uniform global approach.

two drawbacks

• poses problem of transferring competencies across borders
• works against building a unified competitive advantage

Multi domestic Approach (think local, act local)
advantages	disadvantages
Can meet the specific needs of each market more precisely	Hinders resource and capability sharing or cross-market transfers
Can respond more swiftly to localized changes in demand	Higher production and distribution costs
Can target reactions to the moves of local rivals	Not conducive to a worldwide competitive advantage
Can respond more quickly to local opportunities and threats

global strategy 

strategy for competing is similar in all country markets- think global, act local

involves

• coordinating strategic moves globally
• selling in many, if not all, nations where a significant markets exists.

work best when product and buyer requirements are similar from country to country

Global Approach (think global, act global)
Advantages	Disadvantages
Lower costs due to scale and scope economies	Unable to address local needs precisely
Greater efficiencies due to the ability to transfer best practices across markets	Less responsive to changes in local market conditions
More innovation from knowledge sharing and capability transfer	Higher transportation costs and tariffs
The benefit of a global brand and reputation	Higher coordination and integration costs

transnational strategy

incorporates elements of both of globalization and localization approach to strategy making- think global, act global.

Transnational Approach (think global, act local)
advantages	disadvantages
Offers the benefits of both local responsiveness and global integration	More complex and harder to implement
Enables the transfer and sharing of resources and capabilities across borders	Conflicting goals may be difficult to reconcile and require trade-offs
Provides the benefits of flexible coordination	Implementation more costly and time-consuming

that all for chapter 7...bye JJJ