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International Strategy
One of the primary reasons for implementing an international strategy (as opposed to a s trategy
focused on the domestic market) is that international markets yield potential new opportunities.
An international strategy is a strategy through which the firm sells its goods or services outside
its domestic market.
An international strategy is commonly designed primarily to capitalize on four benefits: (1)
increased market size; (2) earning a return on large investments; (3) greater economies of scale,
scope and learning; and competitive advantages of location (e.g., access to low-cost labor, critical
resources, or customers).
Global Strategy. A global strategy assumes more standardization of products across country
boundaries; therefore, a competitive strategy is centralized and controlled by the home office. The
strategic business units operating in each country are assumed to be interdependent, and the
home office attempts to achieve integration across these businesses. The firm uses a global
strategy to offer standardized products across country markets, with competitive strategy being
dictated by the home office.
Environmental Trends
Two important trends are
Liability of Foreignness. A regional focus allows firms to marshal their resources to compete
effectively in regional markets rather than spreading their limited resources across many
international markets.