International Strategy Flashcards
International Strategy
The set of actions companies use to manage differences across borders to create competitive advantages.
Strategy
The actions managers take to achieve company objectives, such as cost leadership, differentiation, or growth.
Low-Cost Strategy
A strategy that focuses on reducing costs and seeking efficiencies to offer products at lower prices than competitors
Differentiation strategy
A strategy that emphasizes creating unique products or services that allow companies to charge premium prices
Profitable Growth
A combination of increasing revenues and profitability, usually achieved by either reducing costs or differentiating products
Value creation
The process of increasing the difference between a customers willingness to pay and the cost of producing a product
Value capture
The process of maximizing the portion of the value created that the company retains
Value Chain
All value-creating activities a company undertakes, including R&D, production, marketing and customer service
Multidomestic Strategy
A strategy that customizes products, services and operations to meet the differentiated needs of each local market
Meganational strategy
A strategy that focuses on achieving global integration by standardizing products and processes and benefitting from economies of scale
Transnational Strategy
A hybrid strategy that combines elements of both meganational and multidomestic strategies to balance global efficiency and local responsiveness.
Location economies
The cost advantage of performing each stage in the value chain at the lowest cost for that activity
Local responsiveness
Adapting products, services, and operations to meet the specific needs of local markets.
Global integration
Standardizing products and processes across different countries to achieve efficiencies and economies of scale
Local Responsiveness vs. Global Integration:
Local responsiveness helps companies adapt to local market conditions, regulations, and customer needs.
Global integration focuses on standardization to achieve economies of scale, allowing companies to reduce costs and maintain consistent quality across borders.
Companies must balance both pressures, depending on their industry and objectives.
