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MASTER OF BUSINESS ADMINISTRATION SCHOOL OF BUSINESS AND MANAGEMENT INSTITUT TEKNOLOGI BANDUNG 2013
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International Strategies
Firms choose to use one or both of two basic types of international strategies: businesslevel international strategy and corporate-level international strategy. At the business level, firms follow generic strategies: cost leadership, differentiation, focused cost leadership, focused differentiation, or integrated cost leadership/differentiation. The three corporate-level international strategies are multidomestic, global, or transnational (a combination of multidomestic and global). A multidomestic strategy is an international strategy in which strategic and operating decisions are decentralized to the strategic business unit in each country so as to allow that unit to tailor products to the local market. It is focus on competition within each country. The use of multidomestic strategies usually expands the firms local market share because the firm can pay attention to the needs of the local clientele. Global strategy assumes more standardization of products across country markets. As a result, a global strategy is centralized and controlled by the home office. The firm uses a global strategy to offer standardized products across country markets, with competitive strategy being dictated by the home office. A transnational strategy is an international strategy through which the firm seeks to achieve both global efficiency and local responsiveness.
Environmental Trends.
Two important trends are the liability of foreignness, which has increased since the terrorist attacks and the war in Iraq, and regionalization. Research shows that global strategies are not as prevalent as they once were and are still difficult to implement, even when using Internetbased strategies. Regionalization is a trend that has become more common in global markets. Because a firms location can affect its strategic competitiveness, it must decide whether to compete in all or many global markets, or to focus on a particular region or regions. Most firms enter regional markets sequentially, beginning in markets with which they are more familiar. They also introduce their largest and strongest lines of business into these markets first, followed by their other lines of business once the first lines achieve success.