International business strategies are necessary for companies to compete globally. There are two main types of international strategies - global strategies which standardize operations worldwide, and international strategies which allow local subsidiaries more independence. Companies go international to expand customer base, reduce seasonal impacts, and lower costs. Globalization has increased opportunities for international collaboration but also presents challenges around coordination and responding to local conditions that companies must address in their strategies.

1. INTERNATIONAL STRATEGY

2. INTRODUCTION
• International business strategies are a normal part of doing
business no matter where your business is located in the
world
• Global businesses will compete with you, do business with
you, and even put you out of business if you aren't careful
• Businesses, large and small, must formulate international
business strategies to function in the global economy.
• Global business activity is just as normal today as doing
business in your local community was 50 years ago

3. APPEALING FACTORS
 Build a broader customer base.
 Prevent adverse effects of
seasonal business swings.
 Utilize excess manufacturing
capacity sitting idle at home.
 Lower production costs by
using lower priced labour
abroad

4. A global strategy requires significant
coordination between the activities of
the centre and those of subsidiaries.
An international strategy does not require
strong coordination from the centre
The global strategy assumes that the
centre should standardize its operations
and products in all the different countries.
An international strategy assumes that the
subsidiary should respond to local business
The global strategy plans and executes
competitive battles on a global scale
The international strategy gives
subsidiaries the independence to plan and
execute competitive moves independently
A global strategy takes ‘an integrated
approach’
An international strategy treats
competition on a ‘stand-alone basis’
GLOBAL STRATEGY INTERNATIONAL
STRATEGY

5.  Companies go international for a
variety of reasons but the typical
goal is company growth or
expansion
 Overseas operations are often
attractive to executives seeking to
reduce their budgets
 The majority of an industry's
business may shift overseas,
making global expansion all the
more desirable.

6. WHY GLOBALIZATION?
 Economic ‘globalization’ is a historical
process.
 Refers to the increasing integration of
economies around the world.
 As globalization accelerates there will be
increased opportunities for collaboration
between nations, multinational corporations
and communities.

7. How does globalization relate to strategy,
especially in large companies?
Two prime characteristics:
 It involves growing
interdependency between
countries
 It is multi-faceted with many
different business aspects.
There can be no doubt that both
world trade and foreign direct
investment have been growing over
the last twenty years:
World trade exports amounted to
US$ 4,261 billion in 1990, US$
7,036 billion in year 2000 and US$
12,461 billion in 2005
Foreign direct investment outflows
were US$ 230 billion in 1992 and
US$ 779 billion in 2005

8. • The multifaceted nature of
globalization
 Political
Sociological
 Technology
Culture
Finance
Production

9. COSTS OF GOING GLOBAL
Transaction
C
O
S
T

10. Tariff and
non tariff
costs
COST
Know your business
Identify and
understand your
marketplace and
customer
Create your
business plan
Find and evaluate
the people
Think local, act
local

11. •Global strategy
•Multi national
strategy
•Transnational
strategy

12. Foreign Entry Modes

13. Exporting
&
Importing Licensing
Or
Franchising
Joint
VenturesStrategic
Alliance
Foreign
Direct
Investment

14. Contract Manufacturing
Management contracting
Turnkey contracts
Mergers & Acquisitions
Counter Trade
Other Expansion Modes

16. • This case study analyses how IKEA adapted its strategies to
expand and become profitable in China. It also assesses some
lessons the company learnt in China that might be useful in
India.
• What did IKEA do? It innovated to stay in business. It learnt
how to design its own furniture, bought raw material from
suppliers in Poland, and created its own exhibitions. Today,
IKEA is the world's largest furniture retail chain and has more
than 300 stores globally.

17. • IKEA identified the strategic challenges and made attempts to
overcome them. One of the main problems for IKEA was that its
prices, considered low in Europe and North America, were higher
than the average in China.
• IKEA built a number of factories in China which resolved the problem
of high import taxes in China. The company also started performing
local quality inspections closer to manufacturing to save on repair
costs.

18. • Since 1999, IKEA has been working on becoming
more eco-friendly. It has been charging for plastic
bags, asking suppliers for green products, and
increasing the use of renewable energy in its stores.
All this proved difficult to implement in China.
Price-sensitive Chinese consumers seem to be
annoyed when asked to pay extra for plastic bags
and they did not want to bring their own shopping
bags.

20. CONCLUSION
• International Business Strategy is a homework any firms
aiming to expand international market must take seriously.
• After carefully scaling the pressures for cost reduction and
local responsiveness, firms are to finely position their
international business strategy.
• Globalization of business has led to the emergence of global
strategic management.
• The firm with the choice of an effective global strategy that
takes into consideration its strengths and weaknesses in the
face of the opportunities and threats in the environment, will
survive.