DEPARTMENT OF MANANGEMENT SCIENCES HAZARA UNIVESRITY

MANSEHRA

Assignment 10

Subject: Advanced Strategic Management

Submitted to: Dr. Rizwana Tirmizi

Submitted by: Syed Noman Ashraf

Class: MS 1st
Explain the international issues in
international strategies?
Strategy
The guiding rules or principles which influence the direction and scope of the organization’s
activities over the long term.

Levels of strategy
 Corporate (whole enterprise) level
 Business (competitive) level
 Functional (type of role) level.

SWOT analysis
During the 1970s, Andrews proposed a framework for strategy formulation based on the premise
that the final strategy adopted by a company should achieve a ‘fit’ between its internal
capabilities (strengths and weaknesses) and the external situation (opportunities and threats).

This is commonly known as SWOT analysis and involves undertaking

1. an analysis of the external environment within which the firm operates

2. An objective appraisal of the organization’s current position.

External analysis: PESTLE

Highlights the general environmental influences that a firm must cope with, e.g. the political,
economic, social, technological, legal and ecological factors (PESTLE).

This analysis of the external environment will lead to the identification of a number of
opportunities and threats.
Internal analysis
 Should identify those things that the organization does particularly well (strengths) and
those features that inhibit its ability to fulfill its purposes (weaknesses).
 The features to be assessed may include the organization, personnel, marketing and
financial features.
 Strategic alternatives arise from matching current strengths to environmental
opportunities at an acceptable level of risk.
 This framework was further developed during the 1980s by Michael Porter who proposed
a more analytical approach to strategy formulation.

Internal analysis
 Should identify those things that the organization does particularly well (strengths) and
those features that inhibit its ability to fulfill its purposes (weaknesses).
 The features to be assessed may include the organization, personnel, marketing and
financial features.
 Strategic alternatives arise from matching current strengths to environmental
opportunities at an acceptable level of risk.
 This framework was further developed during the 1980s by Michael Porter who proposed
a more analytical approach to strategy formulation.

Porter’s Five Forces analysis

Porter argued that ‘the essence of strategy formulation is coping with competition’ and that in
addition to undertaking a PEST analysis, it is also necessary to undertake a structural analysis of
the industry to gauge the strengths and weaknesses of the opposition and also determine the
competitive structure of a given market.

The key elements in Porter’s Five Forces analysis can be identified as the threat of
1. potential entrants,
2. substitutes,
3. as well as the power of suppliers,
4. buyers, together with an exploration,
5. The degree of competitive rivalry.

According to Porter, strategy formulation requires that each of the above forces be carefully
analyzed in order to successfully:
 Position the company so that its capabilities provide the best defense against the
competitive forces.
 Influence the balance of the forces through strategic moves, thereby improving the
company’s position.

 Anticipate changes in the factors underlying the forces and respond to them.
Porter’s generic strategies
 Generic strategies – help ‘position’ the enterprise to best advantage.
 Overall cost leadership strategy – seeks to be the lowest cost provider.
 Differentiation strategy – seeks to create something unique, unmatched by competitors.
 Focus strategy – seeks to identify a particular segment within the broader market and to
dominate that segment.

Tallman and Yip

(2001) identified three major strategic issues for multinational corporations. These are discussed
as follows:

Geographic spread:
This aspect has to do with the spread of business beyond the borders of the home country-the
original issue in international business. It concerns strategic issues related to the
internationalization process of the firm such as various modes of entry.

Local adaptation:
This aspect is about the degree to which business is adapted to the specific circumstances of the
entering or entered foreign market; for example, how much to adapt products to the different
demands in the new market. Another strategic question in this context is how much knowledge is
needed about the local market environment to be able to make the right adaptations.

Global Integration:
This issue is about to what extent the MNC integrates its business operations between different
national markets, for example in order to better leverage its locally based resources. Usually
there is some integration, since the MNC does not have completely separate and localized
activities. Examples of options for this major strategic issue are the extent of global market
participation, how much standardization of products and other marketing variables can be
achieved, the location of various business activities, and how competitive moves are integrated
between different country markets. The global integration aspect concerns the MNC as a whole,
and is about how the company takes advantage of its geographical spread. The adaptation aspect,
in contrast, mainly concerns how each individual subsidiary locally exploits the resources and
capabilities at its disposal.
Most literature on international business strategy concerns these three issues. However in this
research we are concerned with the last two strategic issues, that is, the strategic dilemma MNCs
face between local adaptation and global integration. Bartlett and Ghoshal's (1992) well-
established typology, for example, is about this dilemma. The multinational strategy focuses on
local adaptation, and the global strategy on global integration, while the international strategy
and the transnational strategy directly concentrate on the dilemma by discussing various mixes of
these two major strategic issues (Pangarkar, 2002).
The strategic dilemma between local responsiveness and global integration is also a key issue in
doing business especially in emerging country markets. It is a well known fact that the products
sold by an MNC on different world markets vary a lot. Some products are only sold in certain
markets, while others are sold more widely (Jansson, 2007). Most products are adapted in one
way or another to the greatly varying market demands. This variation is also true for other MNC
operations than marketing, for example production, purchasing and financing as well as for how
the MNC acts towards governments in different countries.