DEVELOPING INTERNATIONAL STRATEGY

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Adoption of a global strategic planning perspective.

General scan of all markets.

First scan, macro.

Omit closed markets and insignificant markets.Remaining countries entry concerns:

Can a firm gain entry under reasonable conditions?If not, eliminate

Second scan, greater detail

Check environmental constraints educational,Legal, behavioral, social political.

Eliminate countries with undesirable key constraintsOr put them aside for lower priority consideration.

Remaining countries, detailed micro scanning.

Data on all key constraints affecting the firm.Visits by key personnel.

Get good local legal advice.

The Environment Scanning Process in a Marketing-Based Multinational

Entry.

Functional specialists begin detailed work.Staff Specialists in action.

Linkages with country begin.Zoning, tax questions, negotiations on special

Arrangements, supplier commitments, etc.

Check out competition (multinational and local).Can the firm compete effectively?

Data Analysis on firms and industries.

Competitive analysis

Product line issues.

Which products shall we use as leaders?Product adaptations necessary?

Assess demand patterns.

Serious entry planning.

DECIDING ON AN INTERNATIONAL STRATEGY AND SETTING GOALS

General Goals: Will the Firm:

•Compete in Specific countries or wherever opportunities exists?

•Offer all its products/services abroad or just as subset?

•Own its overseas operations or use other entry options (e.g., licensing)?

Specific Goals:

•Profitability (e.g., increase international profit growth 20%)

• Production (e.g., increase the ratio of foreign to domestic production)

• Marketing (e.g., integrate marketing efforts across European countries)

•Finance (e.g., minimize foreign exchange losses)

•Technology (e.g., successfully transfer technology to foreign subsidiaries)•Research and Development (e.g., disperse R&D capability world-wide)

CORPORATE FEATURES THAT SUPPORT A GLOBAL STRATEGY

General Areas Specific Corporate Feature Necessary

Corporate Structure

Management Processes

Human Resource

Corporate Culture

•Centralized global authority•No International division•Strong business dimension

•Global strategy information system•Global strategic planning•Cross-country coordination•Global budgeting

•Global performance review and compensation•Use of foreign nationals•Frequent travel•Statements and actions of leaders

•Global identity•Commitment to worldwide employment•Interdependence of business

Processes used to create strategies are perceived to be fair, then localManagers are more likely to implement them. “Due Process” in thiscase means that:

•headquarters makes a serious effort to familiarize itself with local operations.•real two-way communication occurs when strategy is being developed.•headquarters is consistent across subsidiaries in making decisions.•local employees can challenge headquarters’ strategic perspectives and decisions.• local employees are given an explanation for the strategic decisions ultimately made.