When should a multinational company pursue an international strategy?

Question

What will be an ideal response?

Answer 1

An international strategy is essentially a strategy in which a company sells the same products or services in both domestic and foreign markets. It enables multinational enterprises (MNEs) to leverage their home-based core competencies in foreign markets. An international strategy is one of the oldest types of global strategies (Globalization 1.0) and is frequently the first step companies take when beginning to conduct business abroad. It is advantageous when the MNEs face low pressures for both local responsiveness and cost reductions.

An international strategy is often used successfully by MNEs with relatively large domestic markets, and strong reputations and brand names. These MNEs, capitalizing on the fact that foreign customers want to buy the original product, tend to use differentiation as their preferred business strategy.

Given increasing globalization, however, fewer and fewer markets correspond to this situation-low pressures for local responsiveness and cost reductions-that gives rise to the international strategy.