Last Name 1

Your Name

Instructor Name

Course Number

Date

International Business Short Essay Questions

1. Discuss the advantages of establishing a greenfield venture in a foreign country.

To begin with, a greenfield enterprise is a type of new wholly-owned subsidiary in a

foreign country that is built from the ground up. A greenfield venture allows a company to join a

new market without relying on the assistance of an existing company.

The following are some of the advantages of such a venture:

1. Minimizing the chances of losing control of critical competencies;

2. Participating in global strategy planning;

3. Providing a firm with strong operational control;

4. The ability to comprehend the place as well as the projected economy.

The fundamental advantage of a greenfield venture, however, is that it allows the

company to create the type of subsidiary company it desires.

2. Consider a transnational strategy. Why would a firm choose this strategic

alternative? What are the disadvantages of this strategy?

Note that one of the key reasons why this strategy is adopted and used by a number of

companies is that it motivates them to expand and grow big. This is because once a company

adopts this strategy, the entire world becomes its ready market, necessitating the need for the

industry to increase and grow its daily operations to meet the needs of the world market

consumers and customers. As a result, the most significant disadvantage is the increased
 Last Name 2

exposure to a variety of difficult external business environment elements, risks, problems,

and constraints. When a corporation picks the international strategy as its major strategy of

focus, it is more probable to lose control of operations owing to decentralizing the company

structure, necessitating the need to comprehend this as well as add more other demerits.

3. What are the two types of competitive pressures that firms competing in the global

marketplace face? How do firms respond to these pressures?

Competing demands are imposed on a corporation by these forces. To begin, competitive

pressure occurs when a corporation is subjected to competitive pressure from its competitors,

with the exception of monopolistic economies. It occurs in all types of economies and is

based on the demand and supply conditions for a particular product or service. Companies

must strike a balance between cost-cutting goals and the requirement to be relevant in their

communities. Companies respond to these restrictions in a variety of ways, including global

uniformity and localization. Businesses choose a global strategy when cost pressures are

high; when a local reaction is needed, the need for local responsiveness is stronger.

International exporters, global, transitional, multi-domestic, and international exporters are

some of the companies that respond to these challenges. Telecommunications is an example

of a transitional industry where region-specific customization and cost-cutting pressures are

both present. Furthermore, high-quality cardboard goods are part of the international strategy,

and the pressures on customisation and cost-cutting are both minimal here. And this is how

businesses react to the stress.