Scribd
Upload
52 views4 pages

Internattional Business (Developing Networks)

MNEs are adapting their strategies to compete globally in two main ways: 1) locating operations where major competitors are based to monitor them and share resources, and 2) developing business networks with various stakeholders. For example, IBM has facilities in the US, Europe, and Japan to monitor competitors and collaborate. Some key considerations for location strategies include industry-specific differences like food companies focusing regionally due to local tastes. The 3M Company manages its large international operations by 1) matching strategies to local needs, with some products standardized and others customized, 2) balancing global and local responses region-by-region through centers, and 3) gradually growing new markets by focusing on key needs in each country. For example, their

Uploaded by

Frutos frititos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
52 views4 pages

Internattional Business (Developing Networks)

MNEs are adapting their strategies to compete globally in two main ways: 1) locating operations where major competitors are based to monitor them and share resources, and 2) developing business networks with various stakeholders. For example, IBM has facilities in the US, Europe, and Japan to monitor competitors and collaborate. Some key considerations for location strategies include industry-specific differences like food companies focusing regionally due to local tastes. The 3M Company manages its large international operations by 1) matching strategies to local needs, with some products standardized and others customized, 2) balancing global and local responses region-by-region through centers, and 3) gradually growing new markets by focusing on key needs in each country. For example, their

Uploaded by

Frutos frititos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

DEVELOPING EFFECTIVE STRATEGIES

MNEs are supplementing or supplanting their old strategies in a number of ways in order to
compete more effectively worldwide. Two of the most recent developments include going where
the action is and developing new business networks with governments, suppliers, customers, and
competitors.

Going where the action is

A. The need to go international in order to keep up with the competition.

1. Successful multinationals have operations in the home countries of their major triad
competitors.

For example, IBM’s strongest competitors are located in the United States, Europe, and
Japan. In turn the company has facilities in all three places, to monitor the competition as
well as to conduct research. Moreover, the communication network among the
company’s facilities allows each to share information with the others and to provide
assistance. This also helps the company to maintain a strong competitive posture

2. Another reason for locating near major competitors is that some markets develop
faster than others and the experience and knowledge that is learned here can help in
other markets.

For example, in the US market IBM is now trying to develop a strategy of providing the
best service in the industry. In the past the company had often referred service problems
to its dealers

3. Another important aspect of a location-focused strategy is that MNEs often establish


a home base for each major product line, and a multiproduct-line company will have
“centers for excellence” all over the world.

These centers are responsible for providing global leadership for their respective product
lines. For example, Asea Brown Boveri, a Swiss firm, uses Sweden as the home base for
transmission equipment. Research, development, and production are centralized in that
country.

4. It is also important to realize that the product line will dictate the degree of
globalization.

For example, food companies in Europe tend to be less international and more regional in
focus. Local tastes vary widely and there are only modest gains to be achieved through
largescale operations, so European food companies tend to have an extensive local
presence. The same is true for home appliances, which are often produced for regional
markets. On the other hand, when European companies have become truly global, they
have tended to focus on products that do not require high levels of integration on a
worldwide basis.
INTERNATIONAL BUSINESS STRATEGY IN ACTION

THE 3M COMPANY

The 3M Company is a major MNE that has over 50,000 products comprising everything from
office supplies to construction and building maintenance to chemicals. It employs over 73,000
people and has operations in 60 countries.

*How does the firm manage such a large international operation?

A. One way is by matching its global strategies with the needs of the local market.

1. Some goods such as home videocassettes are standardized and are sold on the
basis of price and quality.
2. Culture and local usage are not important considerations.
3. Other products are greatly influenced by local preferences or regulations;
telecommunications is an example.
4. Each country or region of the world has its own modifications for local
application.

B. The company balances its global strategies and national responses on a region-by-region
basis. For example, in Europe the company has set up a series of business centers to
address local differences

C. The company also uses European management action teams (EMATs) to balance the
needs of subsidiaries in responding to local expectations with the corporation’s need for
global direction.

D. The company also carefully identifies those products that it will sell in each geographic
area while following two basic strategies:

(1) Try to be the first in the market with new offerings because this strategy puts the
competition at a disadvantage, and

(2) Grow new markets gradually by picking out those products that address the country’s
most pressing needs and focus exclusively on them. Commenting on its worldwide strategy, a
company executive said:
We don’t believe in formulating a single global strategy for selling videocassettes in
India and laser imagers in France and Post-it brand notes in Brazil. For each of 3M’s 23
strategic business centers in each region the company’s strategy is a blend of global, regional,
and local companies and that will continue.
6 Useful Tips for Strategic International Business Planning

People have traded goods and services around the world for thousands of years.
Businesses engaged in import and export gain additional profit that is not possible at the local
level. Modern technology has increased international trade significantly. The world is a global
village where doing business across the globe is easier than trading across a city was in the past.

1. Find the right market.


Find and choose the international market best suited to your type of business. You will
have to analyze and evaluate your product or service demand in different international markets.
Choosing the right destination according to your business type is the first step of strategic
international business planning.

2. Understand your competitors.


Know your competitors in your chosen international market. If the competition is really
tough, it is better to choose a location with a smaller competitor presence, even if the demand for
your product is lower in this location. You can more easily gain higher market share with less
competition.

3. Identify growth opportunities.


Identifying growth opportunities is an important part of strategic planning in international
business. Growth strategies are meant to grow businesses by either finding new markets in
previously unexplored parts of the world or evaluating new methods to increase market share and
profits in existing international markets. Expect to define your growth strategy or strategies
during strategic planning.

4. Develop a local plan.


International business differs from local business in that you may need to deal with
markets in various countries in different parts of the world. Different strategies may be required
for each location due to variation in political, legal, or economic climates of the different areas.
Be prepared to adopt different plans for different markets depending on specific market
requirements.

5. Find strategic partners.


If you are considering international business expansion, you will require different
strategies for different markets. In this case, it is difficult for a single entity to smoothly execute
expansion. Consider finding a strategic partner, one aware of market trends in the regions where
you are expanding, to assist you with your expansion.

6. Stay flexible to changing needs.


Economic or political circumstances in any market may not remain unchanged for long.
You must constantly analyze your market’s situation so that strategy and planning respond to
changes in market circumstances to maintain continuous growth of your international business.
https://www.businessmapping.com/blog/6-useful-tips-for-strategic-international-business-planning/

You might also like