Download Managing the International Environment

International Environment
The international environment is of increasing
concern to companies around the world
because it is both a major opportunity
and a major threat.
Threat exists in the presence of
international forces that increase uncertainty.
Opportunity exists in the huge new
markets
and resource pools abroad.
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Choosing a Strategy
The three factors that influence the choice
of strategy for global expansion are:
• Pressures for global integration
• Pressures for local responsiveness
• Bureaucratic costs
2
Multidomestic Strategy
Responds to local pressures and customizes
products to suit the needs of customers in
each country
• Manufacturing, R&D, marketing abroad
• Achieve a differentiation advantage
• Bureaucratic costs are lowest
3
International Strategy
Offers customers in all countries a
standardized product and allows foreign
divisions to adapt products to local
preferences only slightly
• Manufacturing abroad
• R&D and marketing at home
• Bureaucratic costs are low
4
Global Strategy
Organization reduces production costs so that
it can offer foreign consumers less
expensive products than their domestic
companies offer
Manufacturing at a few low-cost locations,
• R&D and marketing at home
• Bureaucratic costs are high
5
Transnational Strategy
—
Simultaneously achieves the advantages of
both a global strategy and a multidomestic
strategy.
• Manufacturing, R&D, marketing abroad
• Emphasis on global learning / cost reduction
• Bureaucratic costs are highest
6
Understanding Regional Cultures
Discuss in small groups led by non-American students:
How are Americans seen abroad?
What values or beliefs affect behavior in your culture?
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Consider:
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Class/status
Environment
Ethnic ties
Governmental issues
Religion
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