INTERNATIONAL BUSINESS:

STRATEGY, MANAGEMENT, AND THE

NEW REALITIES
1
INTERNATIONAL STRATEGIC
MANAGEMENT, DIFFERENCES WITH
DOMESTIC MANAGEMENT
INTERNATIONAL SWOT ANALYSIS
FACULTY NAME : SIR. VENKATESH GANAPATHY
Group Members
Athif Abdul Azeez
Barath HT
Avinash
Ayub Khan

WHAT IS STRATEGY?

INTERNATIONAL BUSINESS:
STRATEGY, MANAGEMENT, AND THE
NEW REALITIES
3
Means of establishing organizational purpose
Definition of the competitive domain
Response to external opportunities and threats and internal strengths and
weaknesses
Way to define managerial tasks with corporate, business and functional
perspectives
Coherent, unifying and integrative pattern of decisions
Definition of the economic and non-economic contribution the firm intends to
make to stakeholders
Expression of strategic intent
Means to develop organizational core competencies to create sustainable
competitive advantage
CONT..
INTERNATIONAL BUSINESS:
STRATEGY, MANAGEMENT, AND THE
NEW REALITIES
4
A plan of action that channels an organizations
resources so that it can effectively differentiate itself
from competitors, accomplish distinctive goals, and
achieve superior performance.

Managers develop strategies based on the organizations
strengths and weaknesses, and evaluation of opportunities and
threats.
Managers primarily make decisions about the firms production
and marketing activities, and the development and allocation of
resources devoted to these.

IMPORTANCE STRATEGIC MANAGEMENT
INTERNATIONAL BUSINESS:
STRATEGY, MANAGEMENT, AND THE
NEW REALITIES
5
Develop theme for organization
Provide discipline for long-term thinking
Deal with environmental complexity
More effective resource allocation
Integrate diverse administrative activities
Increase managerial effectiveness
Improve employee motivation
Address stakeholder concerns

DIFFERENT INTERNATIONAL STRATEGIES
Global or international
Transnational
INTERNATIONAL STRATEGY
INTERNATIONAL BUSINESS:
STRATEGY, MANAGEMENT, AND THE
NEW REALITIES
7
Headquarters pursues global integration, seeking to control
country operations in order to minimize duplication, and
maximize efficiency, effectiveness, and learning worldwide.
Emphasizes centralized coordination and control of R&D,
production, marketing, and after-sales service
Management views the world as one large marketplace.
The firm offers standardized products, using standardized
marketing
Main advantages: lower costs; easier to manage
TRANSNATIONAL STRATEGY
INTERNATIONAL BUSINESS:
STRATEGY, MANAGEMENT, AND THE
NEW REALITIES
8
A tug of war the firm attempts to strike some ideal
balance between global and multidomestic strategies.
Combines the major advantages of multidomestic and
global strategies, while minimizing their disadvantages.
Applies the model standardize whenever possible;
adapt when necessary.
APPLICATION OF STRATEGIC
MANAGEMENT PROCESS
Use same 3-phase process
External environment(s) differ and are especially important
Many constraints
May have to do diagnosis & develop strategies for different
countries
DIAGNOSIS
External environment makes the difference between countries
External scanning & analysis is especially important
Can use same 5-force model (by country or region) and same four
aspects of general environment
Still need SWOT and Critical Issues (may be specific to country or
region)
FORMULATION
Still corporate-level, competitive, & other strategies
Still need rich range of alternatives
May need different strategies in each nation or region
Vertical integration has more disadvantages
Partners are usually needed
Need to decentralize more, but this creates problems
BUSINESS LEVEL STRATEGIES
Licensing
Management contracts
Exporting
Joint ventures, production sharing, subcontract arrangements
Turnkey construction contracts
BOT (build, operate, transfer) contracts
Acquisitions
Green-field development
IMPLEMENTATION
Usual considerations in planning actions:
Resources
Support
Reward systems
Timing
Organization structure
Culture
Tracking & control systems
Needs for partners again (choice and relationships are
critical)
Organizing (decentralization vs. centralization)
Staffing
Manage key cultural differences:
Power distance
Uncertainty avoidance
Individualism-collectivism
Masculinity-femininity
Time orientation
IMPLEMENTATION (CONT.)
Increased need for information & good financial measures to
maintain control
Political risks
Economic risks
Importance & difficulty of maintaining good host country
relationships
DIFFERENCES BETWEEN INTERNATIONAL
STRATEGIC MANAGEMENT AND DOMESTIC
STRATIEGIC MANAGEMENT
INTERNATIONAL BUSINESS:
STRATEGY, MANAGEMENT, AND THE
NEW REALITIES
16
Account of environment. In international strategic planning the strategist has to
scan environments of all those countries in which the organization is intending
to enter into or make expansions.
The task of a strategic planner, in general, is to mold the controllable elements
of his decision in the light of the uncontrollable elements of the environment in
such a manner that corporate objectives are achieved.
Formulation of corporate strategy in a domestic firm involves identification of
product market options based on matching of environmental based on matching
of environmental opportunities with corporate strengths, evaluation of each of
these options and choice of the most optimal option. In contrast, a multinational
strategist has to identify strategic alternatives after assessing market
opportunities in different countries of the world and matching them with the
corporate strengths.

INTERNATIONAL BUSINESS:
STRATEGY, MANAGEMENT, AND THE
NEW REALITIES
17
In global strategic planning special consideration is given to the integration of
the international operations with the domestic operations.
In domestic planning the management must determine priorities for allocation of
resources as among different business activities of the firm within the country. In
contrast, in international planning such priorities have to be laid down for
different activities being carried out in each of the foreign nations.
In domestic planning the strategists main concern is to design product market
strategy in such a way as to develop units which fit in the overall corporate
setup. However, this may not be necessarily so if the management has to make
maximum gains out of opportunities arising from different socio economic and
political conditions of different countries.

INTERNATIONAL BUSINESS:
STRATEGY, MANAGEMENT, AND THE
NEW REALITIES
18
The process of crossing national boundaries with a product, a price, technology
or some aspect of an advertising, promotion or selling program. Crossing
boundaries of sovereign nations requires passing through national controls that
apply to goods regardless of origin.
Designing organizational structure for international business is also different
from that for domestic business.
In global strategic management corporate strategist has to make critical
decisions about the potential foreign markets to be tapped and the mode of
entering the markets so chosen.
In respect of formulation of functional strategies also there are differences
between those in domestic businesses and in international setting.
Global strategic management differs from strategic management on control front
mainly due to unique factors influencing the international business.

19
INTERNATIONAL SWOT ANALYSIS
The company, should evaluate its strengths, weaknesses and
opportunities and threats of international environment before
making a final decision about going globally.

The companies can use the following questions in evaluating
its strengths and weaknesses.

Do the companies have a strong market position in the
respective countries in which they operate?
Do the companies quality of the products/services compare
favorably with those of their respective world competitors?
Do the companies have technological advantage in the world
regions where they will operate their major businesses?
Do the companies have a strong brand reputation in the
countries in which they sell their products or services?


Do the companies managers and employees have more talents than
those of their world competitors?
Do the companies financial profile compare favourably with that of
the industrys ?
Are the companies consistently more profitable than their world
rivals?
Are the companies product and process research and development
efforts likely to produce better results than their competitors?
Are the companies various world operations subject to unionisation?





The following questions will help the companies to evaluate the
opportunities and threats of externals environment

What threats and opportunities do political and legal factors present?
What threats and opportunities do economic factors present?
What threats and opportunities do technological factors present?
What threats and opportunities do social factors present?
What is the size of the industry?
What are the growth rate and growth potential of the industry?

Is the industry cyclical? If so, can the cyclicality be smoothened out
across different world markets?
Is the industry subject to fluctuations in demand because of seasonal
factors ? If so, can these seasonal factors be smoothened out across
different world markets?
How intense is world competition in the industry?
What is the median industry probability? What is its potential
probability?
Is the industry susceptible to unionisation?
What is the rate of innovation in the industry?


THANK YOU