International strategic management

1. INTERNATIONAL STRATEGIC
MANAGEMENT
 By, Prayash Neupane

2. INTRODUCTION
 The extended form of management that manages
international business through strategic planning &
decision making, organizing, leading and controlling
function in the global context.
 It focus on achieving organizational goals so that
all concern parties or stake holders are satisfied.
 It concern on marketing, Human resource, Financial
and Operational & production management etc in
global context.
 The strategies are formulated and implemented by
considering the long term vision & goals based on
the analysis of the external environmental factors.

3. TYPES OF STRATEGIC MANAGEMENT
Global Strategy
Trans-national
Strategy
International
Strategy
Multi-Domestic
Strategy
Pressures for local responsiveness
Cost reduction Pressures
High
High
Low
Low

4. INTERNATIONAL STRATEGY
 It try to create value by transferring valuable skills
and products to foreign markets where local
indigenous competitors lack those skills and
products.
 In reality, the most international firms have created
value by transferring different products & offerings
developed at home to new overseas market.
 They tend to centralize product development at
home and establish only local manufacturing and
marketing units at the overseas market.
 Examples are McDonalds, IBM, Wal-Mart, Microsoft
etc.

5. ADVANTAGES
 Ability to exploit transfer core competencies to
foreign market.
 Ability to economize global supplies.
DISADVANTAGES
 Lack of local responsiveness.
 Inability to realize location economies.
 Inability to exploit experience curve effects.

6. MULTI-DOMESTIC STRATEGY
 This strategy is to customize the firm’s product &
offering, management strategy and business
strategy to the conditions of the foreign countries
where it is operating.
 This strategy is based on an English adage “when
you are at rome, live in the roman style; when you
are elsewhere, live as they live elsewhere.”
 Most desirable when there are high pressures for
local responsiveness and low pressures for cost
reductions.

7. ADVANTAGES
 Ability to customize product offerings and marketing
in accordance with local responsiveness.
 Ability to make quicker response to policy changes,
market changes and opportunities at the local
market.
DISADVANTAGES
 Inability to realize location economies.
 Inability to exploit experience curve effects.
 Failure to transfer core competencies to foreign
market
 Possibility of decrease in profit

8. GLOBAL STRATEGY
 A global strategy is focus on pursuing loe-cost
tactics.
 This strategy is not to customize the firm’s product
offering and marketing strategy to local conditions
of the foreign countries because customization
rises cost.
 Under this strategy firm concentrates its production,
marketing and R&D activities only in a few
favorable locations.

9. ADVANTAGES
 Ability to exploit experience curve effects.
 Ability to exploit location economies.
DISVANTAGES
 Lack of local responsiveness.
 Difficulty in handling the resistance from subsidiary
employees over production system and marketing
techniques.

10. TRANS-NATIONAL STRATEGY
 This strategy involves simultaneous focus on
reducing costs, transferring skills & products, and
boosting local responsiveness in foreign market.
 It is balanced combination of all other strategy.
 Recommended when a firm faces high pressures
for both cost reductions and local responsiveness
and when there are significant opportunities for
leveraging valuable skills within the firm’s global
network of operation.
 Example, Samsung

11. ADVANTAGES
 Ability to exploit experience curve effects.
 Inability to realize location economies.
 Ability to customize product offerings and marketing
in accordance with local responsiveness.
 Ability to reap benefits of global learning.
 Well balanced mechanism on authority-responsibility
sharing.
DISADVANTAGES
 Difficulties in implementation
 High cost of exercising flexibility from headquarter.
 High cost for controlling & monitoring of
subsidiaries.

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