Download International Business Strategies: Definitions and Reasons and more Quizzes Strategic Management in PDF only on Docsity! TERM 1 International strategy DEFINITION 1 is a strategy through which the firm sells its goods or services outside its domestic market TERM 2 Reasons for firms to pursue international diversification DEFINITION 2 (1) to extend a product's life cycle (2) secure needed resources (3) pressure has increased for a global integration of operations, mostly driven by universal product demand (4) technology drives globalization because the economies of scale necessary to reduce costs is the lowest level often require an investment greater than that needed to meet domestic market demand (5) new, large scale emerging markets provide strong incentive due to their high potential demand for consumer products TERM 3 four basic benefits from international strategies: DEFINITION 3 (1) increased market size (2) greater returns on major capital investments or on investments in new products and processes (3) greater economies of scale, scope, or learning (4) a competitive advantage through location (access to low- cost labor, critical resources, or customers) TERM 4 larger markets DEFINITION 4 usually offer higher potential returns and thus pose less risk for a firm's investments TERM 5 A firm is more likely to achieve optimal economies of scale when... DEFINITION 5 the extent that a firm can standardize its products across country borders and use the same or similar production facilities, thereby coordinating critical resource functions TERM 6 Multidomestic strategy DEFINITION 6 is an international strategy in which strategic and operating decisions are decentralized to the strategic business unit in each country so as to allow that unit to tailor products to the local market; it focuses on competition within each country and assumes that the markets differ and therefore are segmented by country boundaries; the country managers have the autonomy to customize the firm's products as necessary to meet the specific needs and preferences of local customers TERM 7 disadvantages of multidomestic strategy DEFINITION 7 results in less knowledge sharing for the corporation as a whole because of differences across markets, decentralization, and the different strategies employed by local country units; does not allow the development of economies of scale and thus can be more costly TERM 8 Global strategy DEFINITION 8 to offer standardized products across country markets, with competitive strategy being dictated by the home office; emphasizes economies of scale and offers greater opportunities to take innovations developed at the corporate level or in one country and utilize them in other markets TERM 9 disadvantages of global strategy DEFINITION 9 it may cause the firm to forgo growth opportunities in local markets, either because those markets are less likely to be identified as opportunities or because the opportunities require that products be adapted to the local market TERM 10 Transnational strategy DEFINITION 10 is an international strategy through which the firm seeks to achieve both global efficiency and local responsiveness
