COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by or on behalf of the University of Newcastle pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. DO NOT REMOVE THIS NOTICE
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COMMONWEALTH OF AUSTRALIA
Copyright Regulations 1969
WARNING
This material has been reproduced and communicated to you by or on behalf of the University of Newcastle pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act.
DO NOT REMOVE THIS NOTICE
International strategies
International strategiesLearning objectives
1. Define and discuss the concept of international strategy
2. Explain traditional and emerging motives for firms to pursue international strategies
3 Outline three common international business-level strategies: multi-domestic, global and transnational
4 Identify typical international entry modes
5 Describe some of the environmental trends affecting international strategy, especially liability of foreignness and regionalisation
6. Name and describe some typical entry modes into international markets
7. Outline some major risks in international environments
8. Articulate some key limitations to international expansion.
• A further reminder: What is strategy?• Levels of strategy
• Definition of international strategy• Some motives to use an international strategy• Three broad international business-level strategies• Multi-domestic strategy• Global strategy• Transnational strategy• Emerging global environment trends that may impact international strategies• Some typical international strategic entry modes• Risks in international environments• Limits to international expansion• Conclusion• Strategic choice: Summary• Strategic implementation: General perspective.
References
• Hanson et al., (2014) Chapter 8
Readings in bold black are important.
Analyse the environment
Identify opportunities and threats
Identify the organisation’s current vision,
mission and strategic
objectives
Reassess the organisation’s vision, mission and strategic
objectives
Formulate strategies to achieve strategic
objectives
Implement strategies
Evaluate results
Analyse the organisation’s
resources
Identify strengths and weaknesses
A business strategy process: Rational or formal model
(Source: Robbins, S. P., Bergman, R., Stagg, I. and Coulter, M. 2009. Management, 5th edition, Pearson Education, Australia: 276; and Robbins, S. P., Bergman, R., and Stagg, I. 1997. Prentice Hall, Australia: 248 ).
Introduction
An earlier topic examined strategy at the corporate level: that is, strategies pursued by corporations with multiple businesses in different industries/
markets.
The previous topic examined typical business-level strategies pursued by firms in a single industry or market.
This topic examines international strategies typically pursued by a firm operating in a single international industry or
market.
Introduction
A further reminder: What is strategy?
A strategy is a comprehensive plan or blueprint that sets out co-ordinated commitments and activities that will be implemented
in order to achieve strategic objectives.
(Hanson et al., 2014: 4-6)
Levels of strategyStrategy may be practised at different organisational levels
(Based on deWit and Meyer, 2010: 9)
NETWORK/ JOINT VENTURE LEVEL STRATEGIESMultiple corporations working collaboratively
NETWORK/ JOINT VENTURE LEVEL STRATEGIESMultiple corporations working collaboratively
CORPORATE LEVEL STRATEGIESStrategies for a corporation with multiple businesses
CORPORATE LEVEL STRATEGIESStrategies for a corporation with multiple businesses
BUSINESS LEVEL STRATEGIESStrategies for a business in a single industry or market
BUSINESS LEVEL STRATEGIESStrategies for a business in a single industry or market
FUNCTIONAL LEVEL STRATEGIESStrategies for each functional or discipline area in a business
that combine to implement business level strategies
FUNCTIONAL LEVEL STRATEGIESStrategies for each functional or discipline area in a business
that combine to implement business level strategies
Definition of international strategy
A strategy a firm creates to develop its business outside its domestic market:
• International strategies involve adapting core competencies and SCA to chosen overseas markets.
• International strategies focus on creating and exploiting opportunities outside domestic markets.
• Strategic and operating decisions are decentralised to the firm’s business unit in each country
• This strategy recognises that each country’s market may be very different: therefore the need for local responsiveness is very high;
• A multi-domestic strategy focuses on competition within each country, supports product customisation and encourages competitive response to local conditions. Hence the firm’s business in each country behaves almost like an autonomous business in that country (GMH)
Emerging global environment trends that may impact international strategies
Several global environmental trends may increasingly impact upon a firm’s decision to pursue an international strategy and
which strategy to pursue:
• Liability of foreignness
• In a world of tension between many nations, pursuing an international strategy can be difficult
• The complexity of managing local conditions across many markets can be daunting (Disney theme park in France)
• Regionalisation
• One response to the liability of foreignness is to focus on regions where the markets are more similar and some coordination and sharing of resources would be possible.
• Trade barriers, logistical costs, cultural diversity and other differences by country complicate the implementation of an international strategy
• Complexity of managing multinational firms
• Highly competitive nature of global markets:• Multiple cultural environments• Rapid shifts in the value of different currencies• Instability of some national governments.
• Management challenges:
• Understanding local conditions in many different countries• Multiple risks involved when operating in many countries.
