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Chapter 7. International Strategy: Creating Value in Global Markets

Overview:

More and more, companies and corporations are looking to penetrate global markets. The sources of national advantage can provide an industry with more success, or in some instances hinder, the same industry in another country. The chapter discusses the benefits and risks associated with international expansion, including the emerging trend of greater offshoring and outsourcing activity. When firms enter international markets, it is imperative that they evaluate both cost reduction and adaptation to local markets. The four strategies of international, global, multidomestic, and transnational along with their advantages and disadvantages are discussed. The chapter concludes with a discussion on the four basic types of entry strategies and the relative benefits and risks associated with each of them.

Chapter 7. International Strategy: Creating Value in Global Markets 

Learning Objectives

The importance of international expansion as a viable diversification strategy.

The sources of national advantage; that is, why an industry in a given country is more (or less) successful than the same industry in another country.

The motivations (or benefits) and the risks associated with international expansion, including the emerging trend for greater offshoring and outsourcing activity.

The two opposing forces – cost reduction and adaptation to local markets – that firms face when entering international markets.

The advantages and disadvantages associated with each of the four basic strategies: international, global, multidomestic, and transnational.

The difference between regional companies and truly global companies.

1. The four basic types of entry strategies and the relative benefits and risks associated with each of them.

   Question :

   Initial Postings: Read and reflect on the assigned readings for the week. Then post what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding. 

2. The Internet has lowered the entry barriers for smaller firms that wish to diversify into international markets. Why is this so? Provide an example.