The document discusses the strategies companies use to achieve superior performance through resource allocation and international diversification. It highlights the importance of balancing global efficiency with local market responsiveness, and outlines various entry strategies such as exporting and acquisitions, along with their associated costs and controls. Additionally, it addresses the risks involved in international operations, including political and economic uncertainties.

1. Vikas kumar
1st m.com

2. An action a company takes to attain
superior performance by allocation of
resources.
The determination of the long run goals
and objectives of an enterprise , and
the adoption of courses of action and
the allocation of resources necessary
for carrying out these goals

3.  Increase market size and share
- domestic market may lack the size to
support efficient scale manufacturing
facilities.
Return on investment
-large investment project may require global
market to justify the capital outlays

4.  Economies of scale or learning
- expanding size or scope of market helps to
achieve economies of scale in manufacturing as
well as marketing , R & D or distribution .
- can spread costs over a larger sales’ base
- increase profit per unit
Location advantages
- low cost market may aid in developing
competitive advantage
- may achieve better access to:
1. raw materials
2. lower cost labor
3. key customers

6.  Strategy and operating decisions are
decentralized to strategic business units
(SBU) in each country
 Products and service are tailored to local
markets
 Business units in one country are
independent of each other
 Assumes markets differ by country or regions
 Focus on competition in each market

7.  Products are standardized across national
markets
 Decisions regarding business – level strategies
are centralized in the home office
 Strategic business units (SBU) are assumed to
be interdependent
 Often lacks responsiveness to local markets .

8.  Seeks to achieve both global efficiency and
local responsiveness
 Difficult to achieve because of simultaneous
requirement
- strong central control and coordination to
achieve efficiently
- decentralization to achieve local market
responsiveness

10. Types of entry Characteristics
Exporting
Licensing
Strategic alliance
Acquisition
Subsidiary
High cost , low control
Low cost , low risk, little control, low
returns
Shared cost , shared resources , shared
risk
Quick access to new market , high cost
, complex in merging with domestic
operation
Complex , costly , time consuming ,
high risk ,maximum control

11.  International diversification and returns: firm
expand the sales of its goods or service
across the borders of global regions and
countries into different geographic location
or markets
- may increase a firm’s returns
- such firms usually achieve the most
positive stock returns

12.  International diversification and innovation:
firm expands the sales of its goods or service
across the border of global regions and
countries into different geographic location.
- potentially greater returns on
innovation (larger market)
- generate additional resource for
investment in innovation
- exposed to new products and process in
international markets, generates additional
knowledge leading to innovations

13.  Political risks include
-instability in national government
- war, both civil and international
- potential nationalization of a firm’s
resources

14. Economic risks are interdependent with
political risks and include
 Differences and fluctuation in the value of
different currencies
 Differences in prevailing wage rates
 Difficulties in enforcing property rights
 unemployment

15.  Cost of coordination across diverse geographical
business units
 Institutional and cultural barriers
 Understanding strategic internet of competitors
 The overall complexity of competition