Strategy

• when developing strategies, managers use SWOT analysis
• international strategy: strategy carried out in two or more countries
• Bartlett and Ghoshal argued firms should simultaneously strive to develop:

  1. efficiency
  2. flexibility
  3. learning
• in learning, it's important to balance exploration (new knowledge) and exploitation (existing knowledge)
• many Japanese firms achieved international success by developing highly efficient manufacturing systems
• many European firms succeeded internationally by being locally responsive despite sometimes failing to achieve optimal efficiency or technological leadership
• many United States firms have struggled to adapt to diversity of natural environments but have proven skillful at achieving efficiency through economies of scale
• during periods of market turbulence or economic instability, efficiency and flexibility are particularly important to success of multinational firms
• foreign market entry strategies:

  1. trade of products/services
  2. equity based ventures, FDI
  3. contractual relationships
• exporting, licensing, and franchising require low level of managerial commitment and dedicated resources
• FDI and equity based ventures require high level of managerial commitment and dedicated resources
• when determining foreign market entry strategy, the most important factor is control
• low control strategies are exporting, countertrade, and global sourcing
• moderate control strategies are contractual relationship such as licensing and franchising, and project based collaborative ventures
• high control strategies are equity joint ventures and FDI