The globalization of the economy, internationalization of businesses and emergence of new markets are all key themes in contemporary business. Whereas international business may once have been the province of organisations with sufficient scale and reach, these types of companies — typically multi-national corporations – no longer have a monopoly on this kind of business. Increasing numbers of firms, of varying scale, are confronted with compelling reasons for expanding their activities across multiple national boundaries. In some cases, such motivation includes the knowledge that success in international markets is a pre-requisite for survival; if competitor organisations succeed in international markets, they may achieve the scale and liquidity which affords them sustainable competitive advantage. Show
There are mainly three levels of international strategy. They are;
Short description of these three are given bellow, 1. Corporate Strategy:Corporate strategy attempts to define the domain of businesses the firm intends to operate. Consider three Japanese electronics firms: Sony competes in the global market for consumer electronics and entertainment but has not broadened its scope into home and kitchen appliances. Corporation focuses only on electronic audio and video products. Each firm has answered quite differently the question of what constitutes its business domain. Their divergent answers reflect their differing corporate strengths and weaknesses, as well as their differing assessments of the opportunities and threats produced by the global economic and political environments.
2. Business StrategyWhereas corporate strategy deals with the overall organization, business strategy focuses on specific businesses, subsidiaries, or operating units within the firm. Business strategy seeks to answer the question “How should we compete in each market we have chosen to enter ” Firms that pursue corporate strategies of related diversification or unrelated diversification tend to bundles sets of businesses together into strategic business units. In firms that follow the related diversification strategy, the products and services of each SBU are somewhat similar to each other.
3. Functional StrategiesFunctional strategies attempt to answer the question “How will we manage the functions of finance, marketing, operations, human resources, and research and development (R&D) in ways consistent with our international corporate and business strategies?” International financial strategy deals with such issues as the firm’s desired capital structure, investment policies, foreign-exchange holdings, risk-reduction techniques, debt policies, and working capital management. International operations strategy deals with the creation of the firm’s products or services. It guides decisions on such issues as sourcing, plant location, plant layout and design, technology, and inventory management. Related Posts:
What are the three international strategies?There are three main international strategies available: (1) multidomestic, (2) global, and (3) transnational (Figure 7.23 “International Strategy”).
What are international strategies explain its types?Multinational corporations choose from among four basic international strategies: (1) international (2) multi-domestic, (3) global, and (4) transnational. These strategies vary depending on two pressures; 1) on emphasizing low cost and efficiency and 2) responding to the local culture and needs.
What are the differences among international multidomestic global and transnational international strategies?Tip. Both multi-domestic and transnational companies provide businesses with opportunities to compete on a global scale. Multi-domestic companies tailor products to each country and its local environment while a transnational company retains its characteristics across the globe.
What are examples of international strategies?Expanding a business across international borders looks different based on your goals and business model. An international strategy prioritizes centralized operations that makes companies like Moet and Chandon, Porsche, Red Bull, and Netflix so successful.
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