How Can Domestic Firm Gain Competitive Advantage on New Internati...

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How Can Domestic Firm Gain Competitive Advantage on New International Market?

By | April 2011
Page 1 of 9
HOW CAN DOMESTIC FIRM GAIN COMPETITIVE ADVANTAGE ON NEW INTERNATIONAL MARKET?

MD3442
INTERNATIONAL STRATEGIC MANAGEMENT

MICHAL GIERDA
G20443172

Marketing can be explained as a process of gaining the competitive advantage and sustaining it. Many firms across the world which get to that point on their domestic markets decides to start their businesses on the international markets. This process is well known as internationalization and with proper strategy and market entry mode can lead to getting sustained competitive advantage on a new geographical market. The task of achieving it in a global competitive environment can be very challenging and hard especially if local competitors are supported by their governments. The reason for that paper is to explain: What is competitive advantage?

What are the drivers of internationalization?
Why some companies succeed and other fail on international markets? What are the company’s main unique advantages?
What are the global strategies and entry modes for company?
COMPETITIVE ADVANTAGE
What exactly is competitive advantage? Competitive advantage theory is known thanks to comparative advantage theory which was made by David Ricardo, an English political economist. David Ricardo asked what might happen when one country has an absolute advantage in the production of all goods. Ricardo demonstrated that even though a country may be absolutely more efficient than another in the production of all tradable goods, nevertheless trade will be mutually advantageous. Ricardo’s theory of comparative advantage suggests that it makes sense for a country to specialize in the production of those goods they produce most efficiently and buy goods that they produce less efficiently from other countries. The theory of comparative advantage assumes: 1. Only two countries and two goods.

2. Zero transportation costs.
3. Similar prices and values.
4. Resources are mobile between goods within countries, but not...