29/10/2013
Week 8
Strategy For Competing in international markets
Why companies decide to
enter the foreign market
- - To get new market
segmentation or new customer
- - To produce minimize the
cost but maximize the profit
- - To spread business risk
across a wider market base
- - To further exploit core
competencies
- - To gain access to
resources and capabilities located in foreign markets
The strategic options for
entering and competing in international market
- - Maintain a national production
base and export the goods to foreign markets
- -License foreign firms to
produce and distribute the company’s product abroad
- -Employ a franchising strategy
- -Establish a subsidiary in
a foreign market via acquisition or internal development
- -Rely on a strategic
alliances or joint ventures with foreign companies
Competing internationally:
The three main strategic approach
1. 1. Multidomestic
(think local act local) strategy is one in which a company varies its product
offering and competitive approach from country to country in an effort to be
responsive to differing buyer preferences and market conditions.
2. 2. Global strategy (think global act global) is one in
which a company employs the same basic competitive approach in all countries
where it operate, sells much the same products everywhere, strives to build
global brands and coordinates its actions worldwide with strong headquarters
control.
3. 3. Transnational strategy (think global act local) is an approach
that incorporates elements of both multidomestic and global strategies.
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