Basic Strategies & Multinational and Participation Strategies

1082 Words5 Pages
Basic Strategies & Multinational and Participation Strategies
K. Praveen Parboteeah

Basic Strategies
Review of strategic decision making and strategic management
Understanding of basic strategies And how to craft strategies
Industry analysis SWOT analysis

Situation with diversified companies

Objectives
The global-local dilemma
Some of the broad multinational strategies Multidomestic Transnational International Regional

Participation strategies – how should one enter a market

Multinational Strategies and the Global Local Dilemma

The local responsiveness solution
Customize organizations and products to country or regional differences

The global integration solution
Reduce costs with worldwide standardized
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The International Strategic Alliance
Cooperative agreements between two or more firms from different countries to participate in a business activity – WILL BE COVERED MORE IN DEPTH LATER

4. Foreign Direct Investment (FDI)
FDI means that companies own and control directly a foreign operation symbolizes the highest stage of internationalization

Mergers and acquisitions versus greenfield

Reasons to Invest in Foreign Countries
To extract raw materials To find low cost sources of labor, components, parts, or finished goods To penetrate new markets, the major motivation

Advantages of FDI
Greater control Lower costs of supplying host country Avoid import quotas Greater opportunity to adapt product to the local markets Better local image of the product

Disadvantages of FDI
Increased capital investment Increased investment of managerial and other resources Greater exposure of the investment to political and financial risks

Wholly-owned subsidiary
An overseas operation that is totally owned and controlled by an MNC MNC’s desire for total control and belief that managerial efficiency is better without outside partners Some host countries are concerned that the MNC will drive out local
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