Strategies for Competing in International Markets
Chapter 7: Strategies for competing in international markets
1. WHY COMPANIES DECIDE TO ENTER FOREIGN MARKETS
1. A company may opt to expand outside its domestic market for any of these five major reasons:
1. To Gain access to new customers: Expanding into foreign markets offers potential for increased revenue, profits, and long term growth and becomes an especially attractive option when a company encounters dwindling growth opportunites in its home market.
2. To Achieve lower costs through economies of scale, experience, and increased purchasing power: Many companies are driven to seek out foreign buyers for their products and services because they cannot capture a large enough sales volume domestically to fully capture economies of scale in product development, manufacturing, or marketing.
3. To further exploit its core competencies: A company with competitively valuable resources and capabilities may be able to extend a market leading position in its domestic market into a position of regional or global market leadership by leverageing these resources further.
4. To gain access to resources and capabilities located in foreign markets: An increasingly important motive for entering foreign markets is to acquire resources and capabilities that cannot be accessed as readily in a company’s home market.
5. To spread its business risk across a wider market base: A company spreads business risk by operating in many different countries rather than depending entirely on operations in its domestic market.
2. In addition, companies that are the suppliers of other copnaies often expand internationally when their major customers do so to meet their needs abroad and retain their position as a key supplier chain partner.
2. WHY COMPETING ACROSS NATIONAL BORDERS MAKES STRATEGY MAKING MORE COMPLEX
1. Crafting a strategy to compete in one or more countries of the world is inherently more complex for five reasons.
1. Different countries have diferent home country
1. WHY COMPANIES DECIDE TO ENTER FOREIGN MARKETS
1. A company may opt to expand outside its domestic market for any of these five major reasons:
1. To Gain access to new customers: Expanding into foreign markets offers potential for increased revenue, profits, and long term growth and becomes an especially attractive option when a company encounters dwindling growth opportunites in its home market.
2. To Achieve lower costs through economies of scale, experience, and increased purchasing power: Many companies are driven to seek out foreign buyers for their products and services because they cannot capture a large enough sales volume domestically to fully capture economies of scale in product development, manufacturing, or marketing.
3. To further exploit its core competencies: A company with competitively valuable resources and capabilities may be able to extend a market leading position in its domestic market into a position of regional or global market leadership by leverageing these resources further.
4. To gain access to resources and capabilities located in foreign markets: An increasingly important motive for entering foreign markets is to acquire resources and capabilities that cannot be accessed as readily in a company’s home market.
5. To spread its business risk across a wider market base: A company spreads business risk by operating in many different countries rather than depending entirely on operations in its domestic market.
2. In addition, companies that are the suppliers of other copnaies often expand internationally when their major customers do so to meet their needs abroad and retain their position as a key supplier chain partner.
2. WHY COMPETING ACROSS NATIONAL BORDERS MAKES STRATEGY MAKING MORE COMPLEX
1. Crafting a strategy to compete in one or more countries of the world is inherently more complex for five reasons.
1. Different countries have diferent home country