This document discusses international strategy and opportunities for firms. It covers traditional motives for international diversification like accessing larger markets and resources. It also discusses three levels of international strategy - multinational, global, and transnational. Key risks of internationalization include political risks from government instability and economic risks from currency and inflation rate fluctuations. Modes of entering foreign markets addressed include exporting, licensing, strategic alliances, acquisitions, and new wholly-owned subsidiaries.
5. International Strategy Opportunities & Outcomes Strategic Competitiveness Outcomes Higher Performance Returns Innovation Use Core Competence Modes of Entry Exporting Establishment of New Sub. Licensing Strategic Alliances Acquisition Explore Resources & Capabilities International Strategies International Bus.-Level Strategy Multidomestic Strategy Global Strategy Transnational Strategy Identify International Opportunities Increased Market Size Return on Investment Economies of Scale and Learning Location Advantage Management Problems, Risk, and First Steps Management Problems, Risk, and First Steps Increased Market Size Return on Investment Economies of Scale and Learning Location Advantage
6.
7. International Strategy Opportunities & Outcomes Identify International Opportunities Explore Resources & Capabilities Use Core Competence Strategic Competitiveness Outcomes International Strategies Modes of Entry Increased Market Size Return on Investment Economies of Scale and Learning Location Advantage International Bus.-Level Strategy Multidomestic Strategy Global Strategy Transnational Strategy Exporting Establishment of New Sub. Licensing Strategic Alliances Acquisition Higher Performance Returns Innovation Management Problems, Risk, and First Steps Management Problems, Risk, and First Steps
14. International Strategy Opportunities & Outcomes Identify International Opportunities Explore Resources & Capabilities Use Core Competence Strategic Competitiveness Outcomes International Strategies Modes of Entry Increased Market Size Return on Investment Economies of Scale and Learning Location Advantage International Bus.-Level Strategy Multidomestic Strategy Global Strategy Transnational Strategy Exporting Establishment of New Sub. Licensing Strategic Alliances Acquisition Higher Performance Returns Innovation Management Problems, Risk, and First Steps Management Problems, Risk, and First Steps
15.
16.
17.
18.
19.
20. Strategic Competitiveness Outcomes International diversification facilitates innovation in the firm. May generate resources necessary to sustain a large-scale R&D program. Generally related to above-average returns, assuming effective implementation and management of international operations. Provides larger market to gain more and faster returns form investments in innovation. International diversification provides greater economies of scope and learning.
21. International Strategy Opportunities & Outcomes Identify International Opportunities Explore Resources & Capabilities Use Core Competence Strategic Competitiveness Outcomes International Strategies Modes of Entry Increased Market Size Return on Investment Economies of Scale and Learning Location Advantage International Bus.-Level Strategy Multidomestic Strategy Global Strategy Transnational Strategy Exporting Establishment of New Sub. Licensing Strategic Alliances Acquisition Higher Performance Returns Innovation Management Problems, Risk, and First Steps Management Problems, Risk, and First Steps
23. Major Risks of International Diversification Political Risk National government instability may create potential problems for internationally diversified firms. Legal authority obtained from previous administration may become invalid. Potential changes in attitudes or regulations regarding foreign ownership. Potential for nationalization of firms’ assets.
24. Economic Risk Econ. risks are interdependent with political risks. Differences in inflation rates may affect inter-nationally diversified firms’ ability to compete. Differences and fluctuations in international currencies may affect value of assets & liabilities. This affects prices & thus ability to compete. Enforcing intellectual property rights on CDs, software, etc. Major Risks of International Diversification