STRATEGIES FOR COMPETING IN INTERNATIONAL MARKETS

Chapter 7

Assalamualaikum...

During week eight, Dr. Ummi had taught us about Strategies For Competing In International Market. In this chapter I learn about political risks stem from instability or weaknesses in national governments and hostility to foreign business. Although, economic risks stem from the stability of a country's monetary system, economic and regulatory policies, the lack of property rights protections.
The risks of adverse exchange rate shifts are:

• Exporters experience a rising demand foe their goods whenever their currency grows weaker relative to the importing country's currency.
• Exporters experience a falling demand for their goods whenever their currency grows stronger relative to the importing country's currency. 

Furtermore, a greenfield venture is a subsidiary business that is established by setting up the entire operation from the ground up. The greenfield strategies are:

• Advantage - high level of control over venture, "learning by doing" in the local market and direct transfer of the firm's technology, skills, business practice, and culture.
• Disadvantage - capital costs of initial development, risks of loss due to political instability or lack of legal protection of ownership, and slowest from of entry due to extended time required to construct facility.

 In additinon, an international strategy is a strategy for competing in two or more or more countries simultaneously. Then, a multidomestic strategy is one in which a firm varies its product offering and competitive approach from country to country in an effort to be responsive to differing buyer preference and market condition. It is a think-local, act-local type of international strategy, facilitated by decision making decentralized  to the local level. Next, a global strategy is one which a company employs the same basic competitive approach in all countries where it operates, sell much the same products everywhere, strives to build global brands, and coordinates its actions worldwide with strong headquarters control. It represents a think-global, act-global approach. Beside that, a transnational strategy is a think-global, act-local approach that incorporates elements of both multidomestic and global strategies.

Furthermore, profit sanctuaries are country markets that provide a firm with substantial profits because of a strong or protected market position. Lastly, cross-market subsidization is supporting competitive offensives in one market with resources and profits diverted from operations in another market, can be a powerful competitive weapon. 

That's all from me...