29102013…konnnichiwa…how are you
today? I hope you are doing well. Alright, now I want to share with all of you
what I have learned for this time lecture. Today, the topic was strategies for
competing in International Market. Wow, we are now moving forward step by step.
After studying all the strategies that will be used locally, now we will take a
look what kind of strategies that will be used in order to enter into global
market because I’m sure all of the entrepreneurs have their own hope to expand
their business to foreign country after they succeed in managing their business
locally.
For your information, any company
that aspires to industry leadership in the 21st century must think
in terms of global, not domestic, market leadership. Even though the process to
entre foreign market is harder and more complex, many companies still decide to
enter foreign market. Did you know why? Let me tell you. There are several
primary reasons for them to enter into foreign markets which are to gain access to new customers, to achieve lower costs through economies of
scale, experience, and increased purchasing, to further
exploit its core competencies, to gain
access to resources and capabilities located in foreign markets, and
to spread business risk across a
wider market base.
Why competing across national
borders makes strategy-making more complex? It is because of different
countries have different home-country advantages, different government policies
and economic conditions, different cultures, different preference and taste,
and so on. There are many factors that the companies need to understand first
and considered before entering foreign market.
Other than that, we also learned
about the major strategic options for
entering foreign markets. Once a company decides to expand beyond its domestic
borders, it must consider the question of how to enter foreign markets. There
are five strategic options for entering foreign markets which are maintaining a
national (one-country) production base and exporting
goods to foreign markets, licensing
foreign firms to produce and distribute the company’s products abroad,
employing a franchising strategy,
establishing a foreign subsidiary via
acquisition or Greenfield venture, and using
strategic alliances or other collaborative
partnerships.
In order for company to compete
internationally, they must choose among the three alternative approaches. The first one is multidomestic or think-local, act-local
approach. It is a one in which a company varies its product offering and
competitive approach from country to country in an effort to be responsive
to differing buyer preferences and market conditions. The second one was a global strategy which is a think-global, act-global approach. It is one
in which a company employs the same basic competitive approach in all
countries where its operates, sell much the same products everywhere,
strive to build global brands, and coordinates its actions worldwide with
strong headquarters control. The last one is transnational
strategy which is a combination think-global,
act-local approach. It is an approach that incorporates elements
of both multidomestic and global strategies.
How to gain
competitive advantage in international market? There are three
important ways to gain it. First, it can use
location to lower costs or achieve greater product differentiation. Second,
it can transfer competitively valuable resources and
capabilities from one country to another or share them across
international borders to extend its competitive advantages. Third, it can benefit from cross-border
coordination opportunities that
are not open to domestic-only competitors.
I think, that’s all from me for
this time. Please take care of yourself. See you next time. PEACE NO WAR!!!
“Globalization has changed us into
a company that searches the world, not just to sell or to source, but to find
intellectual capital - the world’s best talents and greatest ideas.” (Jack
Welch – Former chairman and CEO of GE
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