International Strategy
Introduction
What is strategy?
- A method or plan chosen to bring about a desired future, such as
achievement of a goal or solution to a problem.
What is a business strategy?
- Where to compete (1/4 dimensions)
o The product-market investment decision.
- How to compete (3/4 dimensions)
o Value proposition.
o Assets & competencies.
o Function area strategies and programs.
Global Strategy is just one part of the larger subject of strategic management
Differences domestic versus global
- Domestic marketing (management):
o Management process responsible for identifying, anticipating and
satisfying customer requirements profitably.
- International marketing (management):
o In principle exactly the same, but increasing complexity
3 levels of international (marketing) strategy: (1 -> 3 increasing complexity)
- International strategy: marketing of goods and services across national
boundaries
o Involves the company in making one or more marketing mix decisions
across national borders (simplest level -> export).
- Multinational strategy: marketing includes activities, interests or operations in
more than one country, with at least some influence or control of marketing
activities.
- Global strategy: the whole organization focuses on the selection and
exploitation of global marketing opportunities around the globe with the
objective of achieving a global competitive advantage.
o Involves the firm in establishing manufacturing facilities overseas and
coordinating marketing strategies across the globe (most complex
level).
Environmental influences on international marketing:
- Adaptation by experiencing:
o Social/cultural
- Adaptation by learning:
o Legal
o Political
o Technological
o Economic
International Strategy March 2016
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Components of culture
- Religion
- Values and attitudes
- Education
- Social organizations
- Technology and material culture
- Law and politics
- Aesthetics
- Language
Global strategy
What is it? (again)
- 3 levels of international (marketing) strategy: (1 -> 3 increasing complexity)
o International strategy: marketing of goods and services across national
boundaries
o Multinational strategy: marketing includes activities, interests or
operations in more than one country, with at least some influence or
control of marketing activities.
o Global strategy: the whole organization focuses on the selection and
exploitation of global marketing opportunities around the globe with
the objective of achieving a global competitive advantage.
Why is it important?
- Provides opportunities for new sales and profits
- Resource seeking, efficiency seeking, strategic seeking.
- Lead to lower prices (customer perspective).
- Bring down to trade barriers (perspective of internal government
organizations).
- Criticism by internal non-government organizations because of ‘exploitation’.
- Benefits
o Economies of scope and scale, brand recognition, customer
satisfaction, lowest labor and other input costs, spreading R&D costs,
emergence of new markets.
- Costs
o Lack of sensitivity to local demand, transport/logistics costs, hard to
cash economies of scale in practice, communication costs higher,
management coordination, trade barriers, costs related to protection.
International Strategy March 2016
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