International Strategic Management And International Strategy

1872 Words Oct 31st, 2014 8 Pages
First, let’s start with what International Strategy is. According to Hoskisson, Hitt, Ireland, and Harrison (2013), international strategy can be defined as, “a strategy through which the firm sells its goods or services outside its domestic market” (p. 286). Eden, Dai and Li (2010) take the definition of strategic management and combine it to the meaning of international management to create another simple definition for international strategy, “international strategic management is the comprehensive set of commitments, decisions, and actions by firms to gain competitiveness internationally” (p. 61). Companies are not going to enter the international market for just any reason, there are specific incentives for firms to use international …show more content…
287). Economies of scale and scope are a couple more reasons for companies to adopt an international strategy. Economies of scale occur when more units of a good or service are produced on a larger scale whole the production costs decrease, which in turn will increase a firm’s gross profit. So it is enticing for a company to develop products in other countries if it means it will cost less to produce.
Different Types of International Strategy International strategy includes both business-level strategy and corporate level strategy. International corporate-level strategy consists of global strategy, transnational strategy, and multi-domestic strategy. Global strategy is defined by Hoskisson, Hitt, Ireland, and Harrison (2013) as “an international strategy though which the firm offers standardized products across country markets, with the competitive strategy being dictated by the home office” (p. 293). Global strategy is the strategy that is used in a global industry. In their paper, Carpano, Chrisman, and Roth (1994) characterize global industry “by the presence of customers with homogeneous needs and few barriers to trade or foreign ownership of assets” (p. 642). In other words, according to Roth (1992) a global strategy “emphasizes the linking of competitive positions across national markets” (p. 772). Going back to the article by Carpano, Chrisman, and Roth (1994) “multi-domestic industry exists when customer needs are
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