International Strategy
International Strategy
International Strategy
STRATEGY ”
SUBMITTED BY
Management
Problems , Risk ,
and First
Steps
International Strategies
International Business Level Strategies
International Corporate Level Strategies
§ Multi-domestic Strategy
§ Global Strategy
§ Transnational Strategy
International Business Level
Strategies
International Business Level
Strategies
D e te rm in a n ts o f N a tio n a l
A d v a n ta g e
FACTOR OF PRODUCTION
Global Strategy
OR GLOBAL INTEGRATION
MULTIDOM-ESTIC
STRATEGY
LOW
LOW HIGH
NEED FOR LOCAL RESPONSIVENESS
International Corporate-Level
Strategy
When is each strategy
HIGH
appropriate?
GLOBAL
STRATEGY
OR GLOBAL INTEGRATION
MULTIDOM-ESTIC
STRATEGY
LOW
LOW HIGH
NEED FOR LOCAL RESPONSIVENESS
International Corporate-Level
Strategy
When is each strategy
HIGH
appropriate?
GLOBAL TRANSNATI-ONAL
STRATEGY STRATEGY
OR GLOBAL INTEGRATION
MULTIDOM-ESTIC
STRATEGY
LOW
LOW HIGH
NEED FOR LOCAL RESPONSIVENESS
International
International Strategy
Strategy Opportunities
Opportunities &
&
Outcomes
Outcomes
Identify Explore Use Core Strategic
Internationa Resources & Competence Competitive
l Capabilitie ness
Opportunitie s Outcomes
s Internatio Modes of Management
nal Entry Problems , Risk , and
Strategies First Steps
Increased Internation Exporting
Market al
Size Bus .- Level Higher
Return on Strategy Licensing Performance
Investment Multidomest Returns
ic Strategy Strategic
Economies Alliances
of Scale Global
and Strategy Acquisitio Innovation
Learning n
Location Transnation Establishmen
Advantage al Strategy t of New Sub .
Management
Problems , Risk ,
and First
Steps
Choice of International Entry Mode
Exporting
Common way to enter new international
markets.
No need to establish operations in other
nations.
Establish distribution channels through
contractual relationships.
May have high transportation costs.
May encounter high import tariffs.
May have less control on marketing and
distribution.
Difficult to customize product.
Choice of International Entry Mode
Licensing
Firm authorizes another firm to manufacture
& sell its products
Licensing firm is paid a royalty on each unit
produced and sold.
Licensee takes risks in manufacturing
investments.
Least risky way to enter a foreign market.
Licensing firm loses control over product
quality & distribution.
Relatively low profit potential.
Choice of International Entry Mode
Strategic Alliances
Enable firms to shares risks and
resources to expand into international
ventures.
Most joint ventures (JVs) involve a foreign corp.
with a new product or technology & a host
company with access to distribution or
knowledge of local customs, norms or politics.
May experience difficulties in merging disparate
cultures.
May not understand the strategic intent of
partners or experience divergent goals.
Eg. Maruti udyog and suzuki.
ØFailure of the european union’s quest for economic superpower status because