What is international strategy and why it is important?

Question

What will be an ideal response?

Answer 1

Answers may vary, but should include such issues as the following: International strategy is concerned with the way firms make fundamental choices about developing and deploying scarce resources internationally. International strategy involves decisions that deal with which products or services to offer, which markets to enter, and how to compete. It deals with all the various functions and activities of a company and the interactions among them, not merely a single area such as marketing or production. To be effective, a company's international strategy needs to be consistent among the various functions, products, and regional units of the company (internal consistency) as well as with the variety of demands associated with operating in the international competitive environment (external consistency). The goal of international strategy is to achieve and maintain a unique and valuable competitive position both within a nation and globally, a position that has been termed competitive advantage. This suggests that the international company must either perform activities different from those of its competitors or perform the same activities in different ways. To create a competitive advantage that is sustainable over time, the international company should try to develop skills, or competencies, that (1) create value for customers and for which customers are willing to pay; (2) are rare, since competencies shared among many competitors cannot be a basis for competitive advantage; (3) are difficult to imitate or substitute for; and (4) are organized in a way that allows the company to fully exploit and capture the value from the competitive potential of these valuable, rare, and difficult-to-imitate competencies. Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because resources-time, talent, and money-are always scarce. There are many alternative ways to use these scarce resources (e.g., which nations to enter, which technologies to invest in, and which products or services to develop and offer to customers), and these alternatives are not equally attractive. A company's managers are forced to make choices regarding what to do and what not to do, now and over time. Different companies make different choices, and those choices have implications for each company's ability to meet the needs of customers and create a defensible competitive position internationally. Without adequate planning, managers are more likely to make decisions that do not make good sense competitively, and the company's international competitiveness may be harmed.