Basics of International Business Strategy - bizznetwork.net

Basics of International Business Strategy


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Starting with the definition, international business strategy refers to the process of planning and focusing on exporting the products and services to other foreign or international markets. It basically acts as a guide for any commercial transaction that occurs between entities located in different countries. 

Conducted with an intention to increase profits and induce growth in the business, the plans and actions are mostly formed for private entities instead of government ones. 

Why do we need an International Business Strategy?

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With globalization hitting the world, the competition has intensified for all kinds of companies and industries. A movement towards doing business abroad is not as easy or straightforward as it may sound. Hence, comes in picture the need for an international business strategy that helps businesses make a blueprint and get prepared for any foreseen and unforeseen hurdles.

Types of International Business Strategies

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There are three types of known international business strategies. Let us see each one of them individually and discuss how they differ from each other.

  1. Multi-domestic Strategy: A marketing tactic mostly used by the MNCs, multi-domestic strategy is where each branch forms its respective marketing strategy that is based on the distinguished needs of each country
  • Each strategy is established keeping in mind the cultural and traditional needs of the country
  • The firm focuses on the responsiveness to regional requirements within its markets
  • An example of such a marketing strategy is McDonald’s that has a different menu in each country depending on the preference of the people
  1. Global Strategy: A strategic guide to globalization, such strategies are generally used by firms that are facing cost reduction pressures and financial difficulties. These strategies do not concern themselves with local needs and allows the company to sell a standardized product across the globe
  • A complete opposite to multi-domestic strategy, this strategy focuses more on efficiency 
  • The standardized products at times results in having a negative impact on the learning curve 
  • Healthcare company, Pfizer is a good example of this strategy as it sells its same medicine across the globe
  1. Transnational Strategy: Transnational strategy consist of a series of actions that are laid down by a company in order to conduct operations in the market abroad. Firms that adopt this strategy hold central coordination at a particular location. 
  • The word “Transnational” pertains to the methods and structures that allowa an organization to commence and further maintain functions in abroad.
  • They may have multiple subsidiaries across the countries conducting businesses on behalf of the parent company
  • A mid-point between multi-domestic strategy and global strategy, this strategy focuses both on efficiency and preferences and needs of local people in each country
  • One good example of this strategy is Unilever that has multiple subsidiaries all over the world that help in achieving the target of the parent company

Each business is different and requires a thorough study and understanding of both market and its own future expectation while choosing from the three types of international business strategy. These strategies have been adopted and tested over the years and have proven to be remarkably successful for businesses of all sizes only if they are selected and implemented correctly.

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