The document discusses the differences between competing internationally and competing globally. Competing internationally involves entering one or a few foreign markets, while competing globally involves establishing operations on multiple continents and competing for global market leadership. It then provides details on various factors to consider when expanding business internationally, such as political, economic, social, and technological factors in foreign markets. It also outlines different methods for entering international markets and various international business strategies.

1. The Difference Between CompetingThe Difference Between Competing
Internationally & Competing GloballyInternationally & Competing Globally
A company will start to competeA company will start to compete
internationally by entering just one or maybe ainternationally by entering just one or maybe a
select few foreign markets. Competing on aselect few foreign markets. Competing on a
truly global scale comes later , after atruly global scale comes later , after a
company has established operations on severalcompany has established operations on several
continents & is racing against rivals for globalcontinents & is racing against rivals for global
market leadership.market leadership.

2. Political factorsPolitical factors
Consider:Consider:
The political stability of the nation. Is it aThe political stability of the nation. Is it a
democracy, communist, or dictatorialdemocracy, communist, or dictatorial
regime?regime?
Monetary regulations. Will the seller beMonetary regulations. Will the seller be
paid in a currency that they value or willpaid in a currency that they value or will
payments only be accepted in the hostpayments only be accepted in the host
nation currency?nation currency?

3. Economical FactorsEconomical Factors
Consider:Consider:
Consumer wealth and expenditure within theConsumer wealth and expenditure within the
country.country.
National interests and inflation rate.National interests and inflation rate.
Are quotas imposed on your product.Are quotas imposed on your product.
Are there import tariffs imposed.Are there import tariffs imposed.
Does the government offer subsidies toDoes the government offer subsidies to
national players that make it difficult for younational players that make it difficult for you
to compete?to compete?

4. Social FactorsSocial Factors
ConsideConsiderr
Language.Language. Will language be a barrier toWill language be a barrier to
communication for you? Does your host nation speakcommunication for you? Does your host nation speak
your national language? What is the meaning of youryour national language? What is the meaning of your
brand name in your host country’s language?brand name in your host country’s language?
CustomsCustoms: what customs do you have to be aware of: what customs do you have to be aware of
within the country? This is important. You need towithin the country? This is important. You need to
make sure you do not offend while communicatingmake sure you do not offend while communicating
your message.your message.
Social factorsSocial factors: What are the role of women and: What are the role of women and
family within society?family within society?
ReligionReligion: How does religion affect behaviour?: How does religion affect behaviour?
ValuesValues: what are the values and attitudes of: what are the values and attitudes of
individuals within the market?individuals within the market?

5. Technological FactorsTechnological Factors
ConsiderConsider::
The technological infrastructure of the market.The technological infrastructure of the market.
Do all homes have access to energyDo all homes have access to energy
(electricity)(electricity)
Is there an Internet infrastructure. Does thisIs there an Internet infrastructure. Does this
infrastructure support broadband or dial up?infrastructure support broadband or dial up?
Will your systems easily integrate with yourWill your systems easily integrate with your
host country’s?host country’s?

6. Market entry methodsMarket entry methods
After assessing the environment in your selected country, how doAfter assessing the environment in your selected country, how do
you decide which are the best countries to enter? Followingyou decide which are the best countries to enter? Following
factors to be considered before entering-factors to be considered before entering-
Speed – How quickly do you wish to enter yourSpeed – How quickly do you wish to enter your
selected market?selected market?
Costs- What is the cost of entering that market?Costs- What is the cost of entering that market?
Flexibility – How easy is it to enter/leave your chosenFlexibility – How easy is it to enter/leave your chosen
market?market?
Risk Factor – What is the political risk of entering theRisk Factor – What is the political risk of entering the
market? What are the competitive risk? Howmarket? What are the competitive risk? How
competitive is the market?competitive is the market?

7. Payback period – When do you wish to obtain aPayback period – When do you wish to obtain a
return from entering the market? Are there pressuresreturn from entering the market? Are there pressures
to break even and return a profit within a certainto break even and return a profit within a certain
period?period?
Long- term objectives- What does the organizationLong- term objectives- What does the organization
wish to achieve in the long term by operating in thewish to achieve in the long term by operating in the
foreign market? Will they establish a presence in thatforeign market? Will they establish a presence in that
market and then move onto others?market and then move onto others?

8. Trading overseasTrading overseas
There are a number ways an organization can start toThere are a number ways an organization can start to
sell their products in international markets.sell their products in international markets.
1. Direct export.1. Direct export.
The organization produces their product in their homeThe organization produces their product in their home
market and then sells them to customers overseas.market and then sells them to customers overseas.
2. Indirect export2. Indirect export
The organizations sell their product to a third partyThe organizations sell their product to a third party
who then sells it on within the foreign market.who then sells it on within the foreign market.

9. 3. Licensing3. Licensing
Another less risky market entry method is licensing. HereAnother less risky market entry method is licensing. Here
the Licensor will grant an organization in the foreignthe Licensor will grant an organization in the foreign
market a license to produce the product, use the brandmarket a license to produce the product, use the brand
name etc in return that they will receive a royaltyname etc in return that they will receive a royalty
payment.payment.
4. Franchising4. Franchising
Franchising is another form of licensing. Here theFranchising is another form of licensing. Here the
organization puts together a package of the ‘successful’organization puts together a package of the ‘successful’
ingredients that made them a success in their homeingredients that made them a success in their home
market and then franchise this package to overseamarket and then franchise this package to oversea
investors. The Franchise holder may help out byinvestors. The Franchise holder may help out by
providing training and marketing the services or product.providing training and marketing the services or product.
McDonalds is a popular example of a Franchising optionMcDonalds is a popular example of a Franchising option
for expanding in international markets.for expanding in international markets.

10. 5.Contracting5.Contracting
Another of form on market entry in an overseasAnother of form on market entry in an overseas
market which involves the exchange of ideas ismarket which involves the exchange of ideas is
contracting. The manufacturer of the product willcontracting. The manufacturer of the product will
contract out the production of the product to anothercontract out the production of the product to another
organization to produce the product on their behalf.organization to produce the product on their behalf.
Clearly contracting out saves the organizationClearly contracting out saves the organization
exporting to the foreign market.exporting to the foreign market.
6.Manufacturing abroad6.Manufacturing abroad
The ultimate decision to sell abroad is the decision toThe ultimate decision to sell abroad is the decision to
establish a manufacturing plant in the host country.establish a manufacturing plant in the host country.
The government of the host country may give theThe government of the host country may give the
organization some form of tax advantage becauseorganization some form of tax advantage because
they wish to attract inward investment to help createthey wish to attract inward investment to help create
employment for their economy.employment for their economy.

11. 7.Joint Venture7.Joint Venture
To share the risk of market entry into a foreignTo share the risk of market entry into a foreign
market, two organizations may come togethermarket, two organizations may come together
to form a company to operate in the hostto form a company to operate in the host
country. The two companies may sharecountry. The two companies may share
knowledge and expertise to assist them in theknowledge and expertise to assist them in the
development of company; of course profitsdevelopment of company; of course profits
will have to be shared out alsowill have to be shared out also

12. Types of International strategyTypes of International strategy
International strategyInternational strategy
MultiCountry Global

13. Multicountry competition strategy varies somewhatMulticountry competition strategy varies somewhat
across nations, since –across nations, since –
Buyers in different countries are attracted to differentBuyers in different countries are attracted to different
product attributes.product attributes.
Sellers vary from country to country.Sellers vary from country to country.
Industry conditions & competitive forces in eachIndustry conditions & competitive forces in each
national market differ in important aspects.national market differ in important aspects.

14. Multi Country strategyMulti Country strategy
Product customized for each market.Product customized for each market.
Decentralized control—Local decision making.Decentralized control—Local decision making.
Effective when large difference exists between theEffective when large difference exists between the
countries.countries.
Advantageous product differentiation, localAdvantageous product differentiation, local
responsiveness, minimal political risk.responsiveness, minimal political risk.
With multicountry competition , rival firms battle forWith multicountry competition , rival firms battle for
national leadership & winning in one country doesnational leadership & winning in one country does
not necessarily signals the ability to fare well innot necessarily signals the ability to fare well in
other countries.other countries.

15. Global strategyGlobal strategy
Product is same in countries.Product is same in countries.
Centralized controlCentralized control
Effective when the difference between theEffective when the difference between the
countries is small.countries is small.
Advantage cost, coordinated activities, fast inAdvantage cost, coordinated activities, fast in
product development.product development.

16. International Promotion StrategyInternational Promotion Strategy
As with international product decisions and organization can eitherAs with international product decisions and organization can either
adapt or standardize their promotional strategy and message.adapt or standardize their promotional strategy and message.
Advertising messages in countries may well have to be adaptedAdvertising messages in countries may well have to be adapted
because of language barriers or the current message used in thebecause of language barriers or the current message used in the
national market may be offensive to overseas residents.national market may be offensive to overseas residents.
The use of certain colours may also need to be thought about. InThe use of certain colours may also need to be thought about. In
India red is the colour worn by the bride in weddings, white is theIndia red is the colour worn by the bride in weddings, white is the
colour for mourning in Japan.colour for mourning in Japan.
The level of media development has to also be taken into account.The level of media development has to also be taken into account.
Is commercial television well established in your host country? WhatIs commercial television well established in your host country? What
is the level of television penetration? How much control does theis the level of television penetration? How much control does the
government have over advertising on TV and radio? Is print mediagovernment have over advertising on TV and radio? Is print media
more popular then TV? Many organization go for a strategy ofmore popular then TV? Many organization go for a strategy of
adapting advertising messages to local markets to best meetadapting advertising messages to local markets to best meet
consumer demand.consumer demand.

17. International Pricing StrategiesInternational Pricing Strategies
Pricing on an international scale is difficult. AsPricing on an international scale is difficult. As
well as taking into account traditional pricewell as taking into account traditional price
considerationsconsiderations
Fixed and variable costs,Fixed and variable costs,
Competition,Competition,
Company objectives ,Company objectives ,
Proposed positioning strategies,Proposed positioning strategies,
Target group and willingness to pay,Target group and willingness to pay,