Podcast
Questions and Answers
Which of the following frameworks is used for comparing countries for market entry?
Which of the following frameworks is used for comparing countries for market entry?
What is one of the criteria used to assess country markets according to their competitive characteristics?
What is one of the criteria used to assess country markets according to their competitive characteristics?
Which entry mode strategy involves establishing a business with a local partner?
Which entry mode strategy involves establishing a business with a local partner?
Which of the following is NOT included among the four entry mode strategies?
Which of the following is NOT included among the four entry mode strategies?
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What can make an attractive industry in the home market unattractive in another country?
What can make an attractive industry in the home market unattractive in another country?
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What is a typical disadvantage that foreign competitors face when entering a new market?
What is a typical disadvantage that foreign competitors face when entering a new market?
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Which of the following is a key driver to internationalisation?
Which of the following is a key driver to internationalisation?
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What is the term used to describe the competitive advantages that countries and regions gain from specific local conditions?
What is the term used to describe the competitive advantages that countries and regions gain from specific local conditions?
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Which of the following companies is mentioned as an example of a large traditional multinational?
Which of the following companies is mentioned as an example of a large traditional multinational?
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Which factor may serve as an unfavourable condition for internationalisation?
Which factor may serve as an unfavourable condition for internationalisation?
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What is one example of a company that faced disadvantages when entering the US market?
What is one example of a company that faced disadvantages when entering the US market?
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What is a characteristic of countries specializing in specific industries, as mentioned in the content?
What is a characteristic of countries specializing in specific industries, as mentioned in the content?
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Which organization is identified as an example of a not-for-profit that engages in international activities?
Which organization is identified as an example of a not-for-profit that engages in international activities?
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What is a primary focus of the international value system for companies with significant foreign sales?
What is a primary focus of the international value system for companies with significant foreign sales?
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Which of the following is NOT an advantage of global sourcing?
Which of the following is NOT an advantage of global sourcing?
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What challenge do companies face when formulating an international strategy?
What challenge do companies face when formulating an international strategy?
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In Porter's Diamond model, local factor conditions contribute to which type of advantage?
In Porter's Diamond model, local factor conditions contribute to which type of advantage?
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What does the global-local dilemma relate to in international strategies?
What does the global-local dilemma relate to in international strategies?
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Which factor allows international companies to strategically locate different elements of their value chain?
Which factor allows international companies to strategically locate different elements of their value chain?
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What is meant by local responsiveness in international strategies?
What is meant by local responsiveness in international strategies?
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What is a key component of the global integration strategy?
What is a key component of the global integration strategy?
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What is the primary focus of a transnational strategy?
What is the primary focus of a transnational strategy?
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Which of the following companies is cited as an example that successfully implements a transnational strategy?
Which of the following companies is cited as an example that successfully implements a transnational strategy?
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What is a key drawback of a global strategy?
What is a key drawback of a global strategy?
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In what scenario is a global strategy best suited?
In what scenario is a global strategy best suited?
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What novel advantage does a transnational strategy provide?
What novel advantage does a transnational strategy provide?
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Which characteristic is common to both international and transnational strategies?
Which characteristic is common to both international and transnational strategies?
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What is a significant challenge faced by companies implementing a transnational strategy?
What is a significant challenge faced by companies implementing a transnational strategy?
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What are regional strategies aiming to achieve?
What are regional strategies aiming to achieve?
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What best describes the export strategy in international business?
What best describes the export strategy in international business?
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Which of the following is a characteristic of a multi-domestic strategy?
Which of the following is a characteristic of a multi-domestic strategy?
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In which situation would a company most likely adopt a multi-domestic strategy?
In which situation would a company most likely adopt a multi-domestic strategy?
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What is a primary disadvantage of a multi-domestic strategy?
What is a primary disadvantage of a multi-domestic strategy?
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What best defines a global strategy in international business?
What best defines a global strategy in international business?
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Which of the following companies is most likely to follow a multi-domestic strategy?
Which of the following companies is most likely to follow a multi-domestic strategy?
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What is a key risk of centralising operations in an export strategy?
What is a key risk of centralising operations in an export strategy?
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What is a common focus area for companies using a global strategy?
What is a common focus area for companies using a global strategy?
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Study Notes
Business Strategy (2024/2025)
- This presentation covers international business strategy, focusing on choices for businesses operating in multiple geographic markets.
- It differentiates traditional multinationals (e.g., Nestle, McDonald's, Toyota) from newer, internet-based startups and not-for-profit organizations (e.g., Red Cross, Doctors without Borders).
Internationalisation Drivers
- Factors driving internationalization include lower trade and investment barriers, improved international legal frameworks, and advancements in communication technologies (e.g., cheaper air travel, internet).
- Challenges to internationalization include remaining trade barriers, protectionism of national companies from overseas rivals, and variations in consumer needs across markets.
International Strategies
- The core challenge of formulating international strategies is balancing global integration pressures with pressures for local responsiveness.
- Global integration involves standardizing products and services across markets.
- Local responsiveness involves adapting to local customer preferences, regulations, and cultural nuances.
- The global-local dilemma concerns the extent to which products and services can be standardized or must be adapted to accommodate specific national markets.
- Examples include TV markets (potentially standardized) and processed food markets (generally needing adaptation to local tastes).
Four International Strategies
-
Export Strategy: Companies primarily export locally produced goods with minimal adaptation to foreign markets, often centralizing production in the domestic market.
- Pros: relative ease & minimal adaptation
- Cons: limited global reach, prone to competition from local businesses
- Examples: Boeing, Bugatti
-
Multi-domestic Strategy: Different product and service offerings and operations tailored to specific local market conditions and customer preferences.
- Pros: tailored to market needs
- Cons: potentially higher costs, management complexity and difficulties with brand consistency
- Examples: Frito-Lay, Nestle
-
Global Strategy: Focus on global integration, approaching the world as a single market with standardized products and services to maximize economies of scale & centralized operations.
- Pros: centralized strategy, cost efficiencies from standardization
- Cons: inflexible, risk of missing local market preferences/needs
- Examples: IKEA, Cemex
-
Transnational Strategy: Combines global integration and local responsiveness, aiming for balanced efficiency and adaptation to local markets.
- Pros: efficiency, adaptability
- Cons: coordination complexity
-
Regional Strategies: Focus on treating regions as homogenous markets to maximize efficiency and localization.
- Example: European Union, North American Free Trade
Market Selection and Entry
- An attractive market in one country might not be attractive in another.
- Frameworks for comparing countries include PESTEL (political, economic, social, technological, environmental, legal) and CAGE (cultural, administrative, geographic, economic).
Competitive Characteristics
- Country markets are assessed based on market attractiveness (PESTEL, CAGE, Porter's Five Forces), defender's reactiveness, and defender's clout.
Entry Mode Strategies
- Common entry modes include exporting, contractual agreements (licensing, franchising), joint ventures, and wholly-owned subsidiaries.
- Each entry mode has varying levels of resource commitment, control, risk, and speed of entry.
Appendices (Table of Entry Modes)
- Comparison table summarizing the advantages and disadvantages of each entry mode (detailed in the pages provided).
- A summary of potential strategies for companies planning to expand internationally. Note that this table is in slide 34.
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Description
This quiz explores the intricacies of international business strategy, examining traditional multinationals and internet-based startups. Key topics include the drivers of internationalization and the challenges businesses face when formulating their strategies across different markets.
