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One of the biggest concerns of companies competing in foreign markets is whether to customize their
offerings in each different country market to match the testes and preferences of local buyers or whether
to offer a mostly standardized product worldwide.
In addition, company has to shape its strategic approach to competing in foreign markets according to
whether its industry is characterized by mutlicountry competition, global competition, or transition from
one to the other.
Companies making goods in one country for export to foreign countries always gain in competitiveness,
as the currency of that country grows weaker. Exporters are disadvantaged when the currency of the
country where goods are being manufactured grows stronger.
The managers of companies opting to compete in foreign markets have to take a close look at a country’s
politics and policies toward business and foreign companies.
Global Competition – competitive conditions across national market are linked to form an international
market and leading competitors compete in many different countries.
Rival firms in globally competitive industries vie for worldwide leadership.
Licensing strategies make sense when a firm with valuable technical know-how or a unique patented
product has neither the internal organizational capability nor the resources to enter foreign markets
Franchising Strategy: the franchisee bears most of the costs and risks of establishing foreign locations; a
franchisor has to expend only the resources to recruit, train, support and monitor, franchisees.
A multicountry strategy is appropriate for industries where mulitcountry competition dominates and local
responsiveness is essential. A global strategy worked best in markets that are globally competitive or
beginning to globalize.
There are instances when dispersing activities is more advantageous than concentrating them. It is
strategically advantageous do diverse activities:
1. to hedge against the risks of fluctuating exchange rages
2. supply interruptions
3. adverse political developments
The classic reason for locating an activity in a particular country is low cost.
Profit sanctuaries – country markets in which a company derives substantial profits because of its strong
or protected market position.
Cross –market subsidization – supporting competitive offensives in one market with resources and profits
diverted from operations in other markets
Strategy:
1. use lower prices to win customers from weak higher-cost rivals
2. merge with or acquiring rival firms to achieve the size needed to capture greater scale economies
3. investing in new cost-saving facilities end equipment, relocating operations to countries where
costs are significantly lower
4. pursuing technological innovations or radical value chain revamping to achieve dramatic cost
savings
Strategy approaches for runner-up companies:
1. offensive strategies to build market share:
• pioneering a leapfrog technological breakthrough
• getting new or better products into the market ahead of rivals and building a reputation for
product leadership
• being more agile and innovative in adapting to evolving market conditions and customer
expectations than slower-to-change market leaders
• forging attractive strategic alliances with key distributors, dealers, or marketers of
complementary products
• finding innovative ways to drive down costs
• crafting an attractive differentiation strategy based on premium quality, technological
superiority, outstanding customer service, rapid product innovation , or convenient online
shopping options
2. growth-via-acquisition strategy
3. vacant-niche strategy
4. specialist strategy
5. superior product strategy
6. distinctive-image strategy
7. content follower strategy
End-game strategies:
An end-game, slow-exit, or harvest strategy is a reasonable strategic option for a weak business in the
following circumstances:
1. when the industry’s long-term prospects are unattractive
2. when rejuvenating the business would be too costly or at best marginally profitable
3. when the firm’s market share is becoming increasingly costly to maintain or defend
4. when reduced levels of competitive effort will not trigger an immediate or rapid falloff in sale
5. when the enterprise can redeploy the freed resources in higher-opportunity areas
6. when the business is not a crucial or core component of a diversified company’s overall lineup of
businesses
7. when the business does not contribute other desire features to a company’s overall business
portfolio
Aligning a company’s strategy with its overall situation starts with a quick diagnosis of the industry
environment and the firm’s competitive standing in the industry:
1. what basic type of industry environment (emerging, rapid-growth, high-velocity, mature, global,
commodity-product)
2. what position does the firm have in the industry (leader, runner-up, strong, weak, crisis-ridden)