Basic Strategies & Multinational and Participation Strategies

1082 WordsMay 18, 20115 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…show more content…
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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