Strategic Management

- Whether to customize the company's offerings in each country
-Whether to employ the same strategy
-Where to locate production, distribution, and customer service operations
-How to transfer strengths/capabilities

- Gain access to new customers
- Achieve lower costs and thereby becoming more cost competitive
- Further exploit capabilities and resource strengths
- Spread business risk

- Cross country differences in buyer taste, market size, growth potential
- Sizeable cross- country differences in wage rate, worker productivity, inflation rates, energy supplies and other profit contributors
- Gov policies/reg
- Risk of adverse shift in currency

- Tension between the market pressures to localize a company's product offering country by country and the competitive pressure to lower costs by offering most standardize products in all countries where a company competes is one of the big strategic issues that company must address

Companies that export goods to foreign countries always gain in competitiveness when the currency of the country in which the goods are being manufactures grows weaker relative to the currencies of countries to which goods are being exported

Exists when competition in one national market is not closely connected to competition in another national market.. There is no global or world market, just a collection of self-contained markets

- company varies product offerings and competitive approach from country to country in an effort to be responsive to differing buyer preferences and market conditions

- Increased production and distribution costs
- Not conducive to building a single worldwide competitive advantage
- Handicap a company from using its existing resources, competencies, and capabilities

Competitive conditions across national markets are linked strongly enough to form a true international market and when leading competitors compete head to head in many different countries

- Ex: motor vehicles, tvs

- Maintain a national production base and export to foreign markets
- License foreign firms to use the company's technology to produce/distribute
- Franchise
- Multi country strategy
- Global strategy
- Rely upon acquisitions or internal startup ventures to gain entry
- Strategic alliances/joint ventures with foreign companies

Company employs the same basic competitive approach in all countries where it operates, sells the same product everywhere
- Coordinate strategic actions from central headquarters

Middle ground approach allowing managers to
- Incorporate minor country specific variations in products to better satisfy
- Make adjustments in production/distribution/marketing

Allows acquirer to move directly to the task of transferring resources and personnel, integrating and redirecting activities, putting a new strategy in place, accelerating efforts

Makes sense when a company already operates in a number of countries
- When creating a new subsidiary is cheaper
- When adding new production capacity will not adversely impact the supply/demand balance in the local market
- When a new subsidiary has the ability to gain good distribution access
- When a new subsidiary will have the size, cost structure, and resource strengths to compete against local rivals

Enable a growth minded company to widen its geo coverage and strengthen its competitive foreign markets
- offers flexibility and allows a company to retain some degree of autonomy and operating control

- Knowledge and expertise of local partners could be less valuable
- Language and culture barriers
- Conflicting objectives/strategies
- Cannot become dependent on foreign partners