International

strategy

Presented
by
Saurav sharma
Rajendra yadav
Vaibhav mishra

Definition

Aninternational strategymeans

thatinternationallyscatteredsubsidiaries
actindependentlyandoperateasifthey
werelocalcompanies,withminimum
coordinationfromtheparent
company.Global strategyleadstoawide
varietyofbusinessstrategies,andahigh
levelofadaptationtothelocalbusiness
environment.

Internationalstrategyframework

Internationalvglobalstrategy

International strategy refers to a range of options for

operating outside an organisations country of origin.

Global strategy involves high coordination of extensive

activities dispersed geographically in many countries
around the world.

N.B. Global strategy is just one kind of international

strategy.

Internationalisationdrivers

Locationadvantages:
Portersdiamond(1)
Porters Diamond explains whysomelocationstendtoproduce

firmswithsustainedcompetitiveadvantagesinsomeindustriesmore
thanothers.
The four drivers in Porters Diamond stemfrom:
local factor conditions
local demand conditions
local related and supporting industries
local firm strategy structure and rivalry.

Locationadvantages:
Portersdiamond(2)

Porters Diamond the determinants of national advantages

Internationalstrategies

TheCAGEframework

Cultural
distance

Administrative
and
politicaldistance

Geographic
distance

Economic/
wealth
distance

Modesofentry
Exporting
Jointventuresandalliances

Licensing

Foreigndirectinvestment

Exporting
Advantages
Noneedforoperationalfacilitiesinhostcountry
Economiesofscaleinthehomecountry
Internetcanfacilitateexportingmarketingopportunities
Disadvantages
Loseanylocationadvantagesinthehostcountry
Dependenceonexportintermediaries
Exposuretotradebarriers
Transportationcosts

Jointventuresandalliances
Advantages
Sharedinvestmentrisk
Complementaryresources
Mayberequiredformarketentry
Disadvantages
Difficulttofindgoodpartner
Relationshipmanagement
Lossofcompetitiveadvantage
Difficulttointegrateandcoordinate

Licensing

Advantages
Contractualsourceofincome
Limitedeconomicandfinancialexposure
Disadvantages
Difficulttoidentifygoodpartner
Lossofcompetitiveadvantage
Limitedbenefitsfromhostnation

Foreigndirectinvestment
Advantages
Fullcontrol
Integrationandcoordinationpossible
Rapidmarketentrythroughacquisitions
Greenfieldinvestmentsarepossibleandmaybe
subsidised
Disadvantages
Substantialinvestmentandcommitment
Acquisitionsmaycreateintegration/coordinationissues
Greenfieldinvestmentsaretimeconsumingand
unpredictable