STRATEGIES FOR COMPETING IN INTERNATIONAL MARKETS

STRATEGIES FOR COMPETING IN INTERNATIONAL MARKETS

Develop an understanding of the primary reasons companies choose to compete in international markets. Then learn how and why differing market conditions across countries influence a company’s strategy choices in international markets. Thus, learn about the five major strategic options for entering foreign markets. Gain familiarity with the three main strategic approaches for competing internationally. Understand how multinational companies are able to use international operations to improve overall competitiveness.

The competing across National borders maker strategy making more complex.

1.        First different countries have different home country advantages in different industries it’s just like demand condition refer to home market size and growth rate such as buyers’ testes. Then firm strategy, structure and rivals are different styles of management and organization refers to degree of local rivalry. Thus, factor conditions are availability and relative prices of input such as materials. Furthermore, related and supporting industries such as proximity of suppliers, users and complementary industries.

2.      Second Location-based value chain advantages for certain countries. Refer to lower wage rates in productivity by value chain and also lower energy costs to maker strategy.

3.       Differences in government policies, tax rates, and economic conditions. Have positives and negative impact of the government policies and economic conditions in host countries. Such as positives sides is low tax rates and negatives sides is subsidies and loans to domestic competitors.

4.      Currency exchange rate risks. Exporters experience a rising demand for their goods whenever their currency grows weaker relative to the importing country’s currency. Exporters experience a falling demand for their goods whenever their currency grows stronger relative to the importing country’s currency.

5.      Differences in buyer tastes and preferences for products and services. To customize offerings in each country market to match the tastes and preferences of local buyers. Thus, to pursue a strategy of offering
a mostly standardized product worldwide.

CORPORATE STRATEGY: DIVERSIFICATION AND THE MULTIBUSINESS COMPANY

CORPORATE STRATEGY: DIVERSIFICATION AND THE MULTIBUSINESS COMPANY

In this topic try to understand when and how business diversification can enhance shareholder value. The business diversification becomes a consideration it happens a firm should expand into businesses whose technologies and products complement its present business. Thus, refer to resources and capabilities can be used as valuable competitive assets in other businesses. Then costs can be reduced by cross-business sharing or transfer of resources and capabilities. It’s also have transferring a strong brand name to the products of other businesses helps drive up sales and profits of those businesses such as the firm already have big and famous name in the community.  

 Then have gain an understanding of how related diversification strategies can produce cross-business strategic fit capable of delivering competitive advantage.

The figure above show the identifying cross-business strategic fits along the value chain. There have related with one of other with supply, manufacturing, distribution, customer, sales and marketing, and R&D technology activities with have a together the business can gain profits more and more. Then it can support corresponding value chain activities across businesses. Diversifying into related businesses where competitively valuable strategic-fit benefits can be captured puts a company’s businesses in position to perform better financially as part of the company than they could have performed as independent enterprises, thus providing a clear avenue for boosting shareholder value and satisfying the better-off test.

Then understand diversified firm’s four main corporate strategy options for solidifying its diversification strategy and
improving company performance. Corporate parenting refers to the role that a diversified corporation plays in nurturing its component businesses through the provision of top management expertise, disciplined control, financial resources, and other types of generalized resources and capabilities such as long-term planning systems, business development skills, management development processes, and incentive systems. A diversified firm has a parenting advantage when it is more able than other firms to boost the combined performance of its individual businesses through high-level guidance, general oversight, and other corporate-level contributions. In other word, an umbrella brand is a corporate brand name that can be applied to a wide assortment of business types. As such, it is a generalized resource that can be leveraged in unrelated diversification.

Crafting new strategic moves to improve overall corporate performance. Restructuring refers to overhauling and streamlining the activities of a business—combining plants with excess capacity, selling off underutilized assets, reducing unnecessary expenses, and otherwise improving the productivity and profitability of the firm.

A spinoff is an independent company created when a corporate parent divests a business by distributing to its stockholders new shares in this business. Companywide restructuring (corporate restructuring) involves making major changes in a diversified company by divesting some businesses and/or acquiring others, so as to put a whole new face on the company’s business lineup.

STRENGTHENING A COMPANY’S COMPETITIVE POSITION: STRATEGIC MOVES, TIMING, AND SCOPE OF OPERATIONS

STRENGTHENING A COMPANY’S COMPETITIVE POSITION: STRATEGIC MOVES, TIMING, AND SCOPE OF OPERATIONS

The figure show strengthening a firm’s market position via its scope of operations.

There have two scope of the firm operations first HORIZONTAL SCOPE and second VERTICAL SCOPE.

Horizontal scope means the range of product and service segment that a firm serves within its focal market. The horizontal merger and acquisition strategies, means of horizontal merger is the combining of two or more firms into a single corporate entity that often takes on new name it’s like establishment of a new company while the two or more names of those want to involve in the merger will not exist anymore. Take as example: Golden Hope + Sime Darby + H&C = Sime Plantation. Then mean of Acquisition is a combination which one firm, the acquirer, purchases and absorbs the operations of another firm, the acquired. In other word, SPAC is the acronym for Special purpose Acquisition Company and also a company that is initially listed with no operations using cash raised from its IPO (Initial Public Offering). The funds are raised based primarily on the prior track record of the individuals forming the management team who promote the venture. Take as example: F&N à Red Sena Bhd.

A Vertically integrated firm is one that performs value chain activities along more than one stage of an industry’s value chain system. There has Vertically Integrated Firm and Vertical integration strategy. Mean of vertically integrated firm is one that participates in multiple segments or stages of an industry’s overall value chain. Thus, vertical integration strategy mean is can expand the firm’s range of activities backward into its sources of supply and/or forward toward end users of its products.

Full integration means a firm participates in all stages of the vertical activity chain. And means of partial integration is a firm builds positions only in selected stages of the vertical chain. The mean of tapered integration is involves a mix of in-house and outsourced activity in any stage of the vertical chain.

BUILDING AN ORGANIZATION CAPABLE OF GOOD STRATEGY EXECUTION: PEOPLE, CAPABILITIES, AND STRUCTURE

BUILDING AN ORGANIZATION CAPABLE OF GOOD STRATEGY EXECUTION: PEOPLE, CAPABILITIES, AND STRUCTURE

Advantages and Disadvantages of Centralized versus Decentralized Decision Making. Centralization Organizational Structures for basic tenets is Decisions on most matters of importance should be in the hands of top-level managers who have the experience, expertise, and judgment to decide what is the best course of action. Lower-level personnel have the knowledge, the time, nor the inclination to properly manage the tasks they are performing. Strong control from the top is a more effective means for coordinating the firm’s actions. Chief Advantages: Fixes accountability through tight control from the top. Thus, eliminates potential for conflicting goals and actions on the part of lower-level manager. In addition, facilitates quick decision making and strong leadership under crisis situations. Then primary Disadvantages are Lengthens response times by those closest to the market conditions because they must seek approval for their actions. More does not encourage responsibility among lower-level managers and rank-and-file employees. Thus, discourages lower-level managers and rank-and-file employees from exercising any initiative. Decentralized Organizational Structures for basic tenets is   Decision-making authority should be put in the hands of the people closest to, and most familiar with, the situation. Those with decision-making authority should be trained to exercise good judgment. A firm that draws on the combined intellectual capital of all its employees can outperform a command-and-control firm. And for Chief Advantages have to Encourages employees to exercise initiative and act responsibly. Thus, promotes greater motivation and involvement in the business on the part of more company personnel. Spurs new ideas and creative thinking and allows fast response to market change. It’s also Entails fewer layers of management. Then Primary Disadvantages is Higher-level managers may be unaware of actions taken by empowered personnel under their supervision. The firm don’t have Puts the organization at risk if empowered employees happen to make “bad” decisions. Then can impair cross-unit collaboration with other.

EVALUATING A COMPANY’S RESOURCES, CAPABILITIES, AND COMPETITIVENESS

In this topic have covered how to assess how well a company’s strategy is working. First of all, best indicators of a well –conceived and well-executed strategy it just like the firm is achieving its stated financial and strategic objectives and the firm is an above-average industry performer to make firms can survive on the community.

The figure it show identifying the components of a single-business company’s strategy

The figure shows that in specific indicators of strategic success for the single-business to performance in become growth in firm’s sales and market share and become strong firms in financial and have place in the market.

Then understanding a company’s resources and capabilities are central to its strategic approach and to evaluate the potential for giving the company a competitive edge over rival. The firm should know competitive assets such as a resource is a competitive asset that is owned or controlled by firm as a capability or competence is the capacity of a firm to perform and internal activity competently through deployment of a firm resources and then know a firm’s resources and capabilities represent its competitive assets and are big determinants of its competitiveness and ability
to succeed in the marketplace. The means by a resource is a productive input or competitive asset that is owned or controlled by a firm take as example a fleet of oil tankers. Thus, the means for a capability is the capacity of a firm to perform some activity proficiently to manage the firm and used good way to solve the problem when it come such as superior skills in marketing its just like have strong skill to make a good marketing. That can make powerful tool for sizing up a company competitive assets and determining if they can support a sustainable competitive advantages over market rivals. Furthermore, identifying capabilities of an organization capacity is the intangible but observable capacity of a firm to perform a critical activity proficiently using a related combination such as cross-functional bundle of its resources. Then are knowledge-based, residing in people and in a firm intellectual capital or in its organizational processes and functional systems, which embody tacit knowledge. A company requires a dynamically evolving portfolio of resources and capabilities to sustain its competitiveness and help drive improvements in its performance.

MANAGING INTERNAL OPERATIONS: ACTIONS THAT PROMOTE GOOD STRATEGY EXECUTION

In this topic learn instituting best practices and employing process management tools:

From benchmarking and best-practice implementation to operating excellence, first engage in benchmarking to identify the “the best practice” for performing an activity and then adapt the “best practice” to fit the company’s situation; then implement it. Thus, continue to benchmark company performance of the activity against “best-in-industry” or “best-in-world” performance and have move closer to operating excellence in performing the activity. The more that organizational units use best practices in performing their work, the closer a company moves toward performing its value chain activities as effectively and efficiently as possible.

Reengineering the organization it involves radically redesigning and streamlining work effort, flows and processes to achieve dramatic improvements in performance. Then Uses cross-functional teams, cutting-edge technology and information systems to reset and refocus the organization’s strategy.

Total Quality Management (TQM) creating a total quality culture bent on continuously improving the performance of every task and value chain activity. Thus, Is a long-term race without a finish in which success comes slowly in small steps forward (kaizen).

Six sigma quality programs its mean Utilize statistical methods to improve quality by reducing defects and variability in business processes.