Chapter 7: Strategies for

Competing in International
Market
Iman Toto P. Listya Diani P. Milky Umar Miranda Margareth C. M.
Priyodhya
Why Companies Expand into
international markets
- Gain access to new customer

- Lower cost & enhance firm competitiveness

- Further exploit core competencies

- Gain access to resources and capabilities located in foreign

markets

- Spread its business risk across a wider market base

Factors that shape strategy choices in
International Market
- Cross-country differences in demographic, cultural, and
market conditions

- Opportunities for location-based cost advantages

- The risks of adverse Exchange Rate shift

- Government policies on the business climate in host country

- Political Risk

- Economic Risk
 1.Export Strategies

Maintain a home country production base

The five and export goods to foreign markets.
major
strategic 2. Licensing Strategies
options License foreign firms to produce and
for distribute the firms products abroad.

entering
3. Franchising Strategies
foreign
Employ a franchising strategy in foreign
markets markets.
 4. Foreign Subsidiary Strategies
The five Establish a subsidiary in a foreign market via
major acquisition or internal development

strategic
options 5. Alliance and Joint Venture Strategies

for Rely on strategic alliances or joint ventures

with foreign companies.
entering
foreign
markets
 International Strategy
Deciding upon the degree to vary a firms competitive approach country by country to fit the
specific market conditions and buyer preferences in each host country when operating in
two or more foreign markets.

Multidomestic Transnational Global

strategy strategy Strategy
(think local, act local) (think global, act local) (think global, act global)

More Localization
Localization Less
 Multidomestic Strategy
varying a company's product offering and competitive approach from country to
country in an effort to be responsive to significant cross-country differences in
customer preferences, buyer purchasing habits, distribution channels, or
marketing methods.
Employ localized strategies-one for each country market
Tailor the company's competitive approach and product offering to fit specific
market conditions and buyer preferences in each host country.
Delegate strategy making to local managers with firsthand knowledge of
local conditions.
However, think local, act local strategies have two big drawbacks:
They hinder transfer of a company's competencies and resources across
country boundaries
They do not promote building a single, unified competitive advantage,
especially one based on low cos t.
 Transnational Strategy
Approach to strategy making that involves employing essentially the same
strategic theme (low-cost, differentiation, focused, bestcost) in all country
markets, while allowing some country-to-country customization to fit local market
conditions..
Employ a combination global-local strategy
Employ essentially the same basic competitive strategy theme {low-cost,
differentiation, best-cost, or focused) in all country markets.
Develop the capability to customize product offerings and sell different
product versions in different countries (perhaps even under different brand
names).
Give local managers the latitude to adapt the global approach as needed to
accommodate local buyer preferences and be responsive to local market
and competitive conditions.
 Global Strategy
Employ the same basic competitive approach in all countries where a company
operates and are best suited to industries that are globally standardized in terms
of customer preferences, buyer purchasing habits, distribution channels, or
marketing methods. This is the think global, act global strategic theme..
Employ same strategy worldwide
Pursue the same basic competitive strategy theme (low-cost, differentiation,
best-cost, or focused) in all country markets-a global strategy.
Offer the same products worldwide, with only very minor deviations from one
country to another when local market conditions so dictate.
Utilize the same capabilities, distribution channels, and marketing
approaches worldwide.
Coordinate strategic actions from central headquarters.
International Operations to Improve Overall
Competitiveness
Competitive
Advantage
Builder

Location Cross Border

Concentrated Dispersed
Location Location
 Location to Build Competitive Advantage
Concentrated when :
Lower cost of manufacturing or other value chain activities
There are sizable scale economics in performing the activity
There is a steep learning curve associated with performing an activity in a single
location
Certain locations have superior resources, better coordination, and offer other valuable
advantages

Dispersed when :
They need to be performed close to buyers
Transportation cost, scale diseconomies, or trade barriers make centralization
expensive
Buffers for fluctuating exchange rates, supply interruptions, and politics consideration.
 Cross Border to Build Competitive Advantage

Transferring competencies, capabilities, and

resource strengths accross borders

The aims are for :

1. Development of broader competencies and
capabilities
2. Work efficiently, efectively, and standardizing
the products or services
Strategies for Competing in The Markets of
Developing Countries
Prepare to compete on the basis of low price
Modify aspects of the companys business model
or strategy to accommodate local circumstances
Try to change the local market to better match the
way the company does business elsewhere
Stay away from those emerging markets where it
is impractical or uneconomical to modify the
companys business model to accommodate local
circumstances
Journal of
International
Management
The Global war for
talent
Available: 1 July 2009
Introduction
During 2002 - 2007, human resource managers worried about:

- the intensifying international competition for talent

- the impact of not having the right people in place

- employing below-average candidates just to fill positions

The paper's research methodology is reviewing over 400 articles and

books from the academic and popular press using the key words global
war for talent, war for talent, talent management, and global
talent.
Factors impacting the war for talent
There are four significant factors affecting the quantity, quality and
characteristics of talent:

1.Global demographic and economic trends

2.Increasing mobility

3.Transformational changes to business environments, skills and

cultures

4.Diversity
Creative approach for talent solutions

a number of companies are instituting new approaches in finding additional sources

of talent

many companies are instituting new practices to leverage their increasingly diverse
employee

a number of organizations are implementing new practices to retain valuable

employees

companies are actively using development partnerships to influence and build the
next generation workforce
Implications
Conclusions
Telent Response
Dimensions
THANK YOU