Importance of International Strategies - Coursework Example

INTERNATIONAL STRATEGIES Student’s Name: Instructor’s Name: Course Code: Date of Submission: Introduction International strategies are the strategies that many organizations use to expand their business to a wider market. International strategies are applied by organizations to improve their market share by expanding the business into new market (Cullen & Parboteeh 2010). They help organizations to know what products they should offer and at what market. They are used by organizations to determine what modes of entry into the new market they will use so that they will be able to capture the new market. International strategies came as a result of expansion of global business environment which forces organizations to expand their business operations to new markets. Also, with the improvement in technology many organizations are able to penetrate into international markets by designing plans on how to achieve the goals by applying modern technology. Technology has flattened the world hence businesses can be expanded globally with ease because computers softwares like management information systems which are used for coordination of operations (Hill 2011). Therefore, an international strategy helps an organization to be able to understand the complexities of the international market like different languages and be able to design plans on how to overcome those challenges and penetrate into the new market. Therefore, this desire to expand the market and stand in a better competitive position has led to many organizations adopting the international strategies to expand their businesses. There are five international strategies which are global strategy, transnational strategy, regional strategy, international strategy and multi domestic strategy. Comparison of International Strategies An organization can apply many of the strategies below to enter into the new market. A global strategy is the strategy whereby an organization concentrates on centralization of operations and resources in a central place so that it can enjoy the economies of scale of acquiring materials in large quantities. Multi domestic strategy is the strategy in which resources are dispersed in every place where the organization conducts business. This strategy decentralizes resources and operations and therefore does not enjoy economies of scale like the global strategy (Luthan & Doh 2012). Decisions are made on the local level and not from the central place thus the organizations enjoy decentralization of operations. A transnational strategy is the strategy that applies both global and multi domestic strategies. This is a strategy that is used by organizations to coordinate its operations internationally so as to achieve desired cooperation. International strategy is the strategy that guides the operations of an organization internationally and it helps organizations to coordinate the operations globally to achieve profits. Finally, regional strategy is the strategy that is used by organization whereby resources are dispersed into regions rather than central point. The market is segmented into regions and each region has its headquarter (Mead 2009). The above strategies have the following comparisons. First, the strategies aim at focusing for the customers. The need for using these strategies is to ensure that customers are served better and that their demands are met. The strategies focus on attracting new customers as well as retaining the existing customers so that the organization revenue will increase thus increasing the corporate image of the organization. They focus on how best the customers will be served so that they can be satisfied with services or the products offered for sale. The international strategies also have a similar concept of wanting to gain the competitive advantage. Both strategies aim at ensuring that its organization achieves the competitive advantage by increasing its geographical market and become unique (Phatak et al 2009). The uniqueness can only be achieved when the organization expand to new markets and provides unique products which have not been sold in the new market. Therefore, all the strategies aim at improving the competitiveness of the organization by evaluating different strategies and deciding on which one will give the firm a competitive advantage. All the above international strategies are analyzed using the cost based analysis (Alan & Hodgetts 2001). All the above international strategies are analyzed according to the costs and resources. They all aim at minimizing cost incurred in entering new markets. For instance, global strategy aim enjoying economies of scale through centralization of operation while multi domestic strategy aims at minimizing costs by decentralizing resources and activities which will save the organization the costs of transportation. Therefore, all the above strategies will always aim at minimizing costs incurred by the organizations. In addition, international strategies both aim at entering new markets effectively (Pankaj 2001). These strategies are evaluated based on which strategy will be used to enter into the new market with less costs and ease of operation. In this regard, an organization should select a strategy considering its financial capacity so that when entering new markets it will be able to implement the strategy. Therefore, these strategies aim at entering new markets so that the organization will make more profits. Both international strategies apply modern technology in entering the new markets. With the introduction computer softwares which have flattened the world, there came these international strategies. These strategies came up as a result of improved technology in the global business market hence leading to the desires by organizations to expand their markets. Contrasts of the international strategies On the other hand, these international strategies have contrasted which include the following; the first difference is the standardization of products. The only strategies which are able to standardize products are the global international strategy and transnational strategy. This is because all its operations are carried out in a central place including purchasing of materials for the organization (Bruce 2003). Standardization is possible because the materials purchased are of the same quality, hence the output is also expected to be of the same quality. Transnational, regional, multi domestic and international strategies may not achieve standardization of products because they centralize the operations of the organizations including purchasing of raw materials which will lead to purchase of different quality materials. Another difference is the management operations. In multi domestic strategy each business country has its own manager who is responsible for all the activities in that country, in global strategy all the operations of the organization are conducted from a single point that is the headquarters while in transnational strategy an organization tries to integrate international and local operations with he aim of minimizing replications (Bruce 2003). Regional strategy also ensures that each region has its own manager who conducts all operations of the organization in that region and finally the international strategy encompasses all the operations or plans of an organization internationally. These strategies also differ in terms of the distribution channels they use (Pankaj 2003). Global strategy uses the longest channels of distribution because all the operations are conducted from a single central point while multi domestic and regional international strategies contain shortest channels of distribution because they cover only regions and countries where the organization conducts business. Transnational and international strategies contain relatively long channels of distribution because the products are dispersed from a single point and the procedures involved are long before the product finally reaches the consumer. Finally, there is a difference in the efficiency of the strategies (Pankaj 2003). Global strategy is the most efficient international strategy because all the operations are controlled from the headquarters thus there is unity of command. Regional, transnational, multi domestic and international strategies are difficult to implement as there is always a difference in balancing operations of global and mother organization. Therefore, there is no adequate efficiency in the management process like in the case of global strategy. Circumstances under which international strategy is applicable International strategy is applicable in the following circumstances; when there is growth of markets into the international business (Theodore 2000). When there is improvement in international and barriers to international trade have been eliminated, international strategy may be adopted. An organization can expand to international markets using the international strategy when the market trends show that there is growth of markets globally hence a firm can expand also its operations to international markets. When there is a need to diversify the risks associated with the business (Theodore 2000). An organization can apply international strategy to enter into the global market so that the risks of the organization in one country can be spread. If any risk occurs, the organization will find itself at a better position because it could have spread its resources to another potential market hence can continue operating in business in the global market. When there is a need for an organization to enjoy the economies of scale by entering into a new market. An organization may decide to enter into global market so as to enjoy the benefits of economies of scale like the quantity discounts. International strategy also is applicable when there is stiff competition of operating an organization in a country (Mead 2009). The organization may decide to expand its business into the global market where the competition of the same line of production is not high. By this expansion, the organization will able to earn more profits because there is no much competition. Finally, an organization can apply international strategy if there is appropriate technology in use. Appropriate technology is essential in the managing of global business. This is because coordination of operations will be easy as well promotions of the organizations. International strategy is applicable in today’s business because technology levels are high which have improved the management of businesses. On the same note, competition in the global business is high and this has forced organizations to expand their businesses to global market so that they can gain competitive advantage by diversifying their resources (Alan & Hodgetts 2001). International strategy also enables organizations to be competitive by offering quality products for sale. Stiff competition will lead to manufacturing quality products and improved customer services. Therefore, international strategy is essential in the modern dynamic business for any organization that wants to survive in the business arena. Conclusion International strategies are useful for organizations which are contemplating entering into international markets. They help an organization to design plans which they will use to enter the global market. International strategy is an important development because the business environment today keeps on changing as well as the competition in the business environment (Phatak et al 2009). These strategies help organizations to improve their performances and increase profits. International strategies help organizations to achieve their objectives by expanding their businesses to international markets. Besides earning profits, these strategies also improve the image of the organization globally. References Alan, R & Hodgetts, R 2001, The end of Global strategy: European management journal, Vol.. 19, No 4, pp. 333-343. Bruce, K 2003, Designing Global strategies: Comparative and competitive value added Chains, Slogan management Review, Vol. 26, No. 4, pp. 15-28. Cullen, J. B & Parboteeah, K. P 2010, International Business: Strategy and the Multinational Company, New York, Routledge. Hill, C 2011, International Business: Competing in the Global Marketplace, Boston, Mass, McGraw-Hill. Luthans, F & Doh J 2012, International Management: Culture, Strategy, and Behavior, New York, McGraw Hill. Mead, R 2009, International Management, Blackwell Publishing. Phatak, A. BhagatS, R & Kashlak, R 2ed 2009, International Management: Managing In a Diverse and Dynamic Environment, McGraw-Hill. Pankaj, G 2001, Distance still matters: The hard reality of global expansion, Harvard Business Review, Vol. 79, No. 8, p. 137-145. Pankaj, G 2003, Semiglobalisation and international business strategy, Journal of International business studies, Vol. 4, p. 45-90. Theodore, L 2000, The Globalization of Markets, Harvard business review, Vol. 61, No. 3, pp. 92-102. Read More