International strategy
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International Strategy
Elizaveta Ogloblina
Terese Persson
Karoliina Rnjak
Adrian Späthling Introduction
• national boundaries are no longer constraints
for companies
• many theories
• focus on four different approaches to the host
countries The Triad
(Kenichi Ohmae 1985)
• Regional Trading blocks
Europe (Germany)
North America (USA)
Asia (Japan)
• Global strategy has a regional, often triad
based feature Reasons to go abroad
• saturated domestic market
• cheaper production
• research and development capacity
• reduction of seasonal effects
• diversification
• different competition abroad Different Strategies
• International Strategy
– transfer of products and skills
• Multidomestic Strategy
– maximum local responsiveness
• Global strategy
– low cost strategy
• Transnational strategy
– cost pressures and responsibility pressures FOUR BASIC STRATEGIES
High
TransnationalGlobal
StrategyStrategy
International Multidomestic
Strategy Strategy
Low Low High
Pressures for Local Responsiveness
Cost Pressures International Strategy
• value creation by transfer of skills and
products to foreign markets
• lack of local competitors with skills and
products
• developed at home and introduced into
foreign markets
• centralized management
• manufacturing abroad duplication Multidomestic Strategy
• response to different national needs
– cultural
– preferences
– legal / political
– infrastructural
• broad guidelines from headquarter
• most of the management is done locally
duplication
• bottomup strategies Global Strategy (1)
• Transferring distinctive competencies
• Realizing location economies
optimal location for each activity
>value creation is maximized or costs of
value creation are minimized
• Moving down the experience curve
The longer a product is produced the more
experience is gained and costs go down
> With consentrated production, duplication of the learning
process is avoided Global Strategy (2)
• cost reduction by standardization
• coordinated and economic use of
resources
• topdown strategy
• convergence in buyer preferences in
worldwide markets
• willingness to sacrifice preferences
for cheaper products
