Strategy Of International Business Essay

2136 words - 9 pages

Value creationTwo basic conditions determine a firm's profits: the amount of value customers place on the firm's goods or services and the firm's costs of production. In general, the more value customers place on a firm's products, the higher the price the firm can charge for those products. Note, however, that the price a firm charges for a good and service is typically less then the value placed on that good or service by the customer. This is so because the customer captures some of that value in the form of what economists call a consumer surplus.The value creation by a firm is measured by the difference between the amount of value customers place on the firm's goods or services (V) and firm's cost of production. Michael porter has argued that low cost and differentiation are two basic strategies for creating value and attaining a competitive adv in an industry.Porter also notes that it is important for a firm to be explicit about its choice of strategic emphasis with regard to differentiation and low cost, and to configure its internal operations to support that strategic emphasis. When a firm already has a low cost structure, it has to give up a lot of value in its product offering to get additional cost reductions.In sum, porter emphasizes that it is very important for mgt to decide where the company wants to be positioned with regard to value and cost, to configure operations accordingly, and to manage them efficiently to make sure the firm is operating on the efficiency frontier. A firm must also choose a strategic position that is viable.Strategy in international businessMany international markets are now extremely competitive due to the liberalization of the world trade and investment environment. In industry after industry, capable competitors confront each other around the globe. To be profitable in such an environment, a firm must make clear and viable strategic choice with regard to its position on the efficiency frontier, and take actions at the operational and strategic level that support this position. Thus, strategy is often concerned with identifying and taking actions that will lower the costs of value creation and/or will differentiate the firm's product offering through superior design, quality, service, functionality and so on. The firm's objective at this point was to lower production costs by locating value creation activities at an appropriate location.Advantages of global expansionLocation economiesThe theory of international trade also teaches us that due differences in factor costs, certain countries have a comparative adv in the production of certain products. Japan-automobiles, US-computer software, drugs, etc. Trade barriers and transportation costs permitting, the firm will benefit by basing each value creation activity it performs at that location where economic, political and cultural conditions, including relative factor costs, are most conducive to the performance of that activity.Firms that pursue such a...

Find Another Essay On Strategy of international business

Marketing & Strategy of A start-up Business

2884 words - 12 pages Sportspark for a healthy treat. Reference 1. Anitsal. I, Girard. T. 2012: An application of services marketing mix framework: How do retailers communicate information on their sales receipts? Journal of Business Study, 13,77-90 2. Aslan. I. 2012: Creating strategies from TOWS matrix for strategy sustainable development of KIPAS group. Journal of Business Economics& Management, 13, 95-110 3. Anderson, L. M. & Taylor, R. 1995: McCarthy's 4Ps

The Business Strategy of Loreal Group

2488 words - 10 pages in the personal care market, with sales predicted to exceed $39.1 billion in 2015. The strongest growth figures come from South Korea, Japan and China, revealing that men in these countries are becoming more and more beauty conscious. (Euromonitor International, 2013) Technologic Aspects Beguiling fragrances, smoothing essences, lipsticks with both decorative and conditioning ingredients—the range of products offered by the cosmetics industry

Role of International HRM in an international business environment

3121 words - 12 pages strategies in order to manage the employees and also to survive in the market. Denice E (1999) states that the companies are becoming multinational companies since globalisation has opened the international market and removed the barriers of doing business in the international market. It becomes the responsibility of the human resource managers working in a multinational company to manage the diverse environment and human resources in the

International business of ABC pharmaceutical firm.

2275 words - 9 pages cost.In any international business, the issue of transaction cost never fails to be considered. Transaction cost includes opportunity cost incurred due to too much time spent on passing of information from the top down or bottom up. Centralized approach will increase transaction cost while decentralization will reduce it. For example, the Asian firm is adopting a centralized approach. The European market is not what they expected and the

Impact of Culture on International Business

807 words - 3 pages Module 4 - CaseImpact of Culture on International BusinessJanuary 20, 2014Dr. FeningFirst, please identify some "cultural mistakes" from the first article listed above ("The pitfalls of cross-cultural business").Culture is a funny thing -although we all laugh the same, cry the same, and bleed the same; some simple actions that you might consider appropriate may be offensive to someone from a different culture and can set you a world apart from

International of Business in London, England

1248 words - 5 pages Many people dream of going to London, England on vacation or even wanting to move there. Have you ever wonder about London, England? My report is going to be about International Business in London, England. What is International Business? International Business comprises all commercial transactions that take place between two or more regions, countries and nations beyond their political boundaries. Usually private companies undertake

International Business: The Importance of Ethics in Business

1718 words - 7 pages International Business The business world has always relied heavily on contractual agreements while conducting business. These contracts while written in ink, are set in stone. Once your business partner signs his/her name on the dotted line the pact has been sealed and nothing else needs to be said. But what happens when you take away the physical contractual element and everything is agreed upon through one's word? The world of

The Importance of Aligning IT Strategy and an Organization's Business Strategy: A Case Study of Metalco

1558 words - 6 pages Strategic alignment maturity addresses the ability of organizations to adapt their IT and business strategies in a harmonious fashion. This alignment evolves into a relationship where the function of IT and other business functions adapt their strategies together. Early research on the topic has shown that organizations that show a high level of alignment maturity seem to be more capable of executing strategy as critical enablers of strategic

Book Review of Business Policy and Strategy: An Action Guide

4463 words - 18 pages Book Review in fullfilment of BUS406. The document will not fit in your space so if you want the rest I'll submit a second time, ONLY IF YOU TELL ME TO! -Book Review of Business Policy and Strategy: An Action GuideSubmitted in partial fulfillment of B.S. in Business AdministrationCentury University, New MexicoGrade = 95% {A}Business Policy and Strategy: An Action Guide, by Robert Murdick, R. Carl Moor and Richard H. Eckhouse, attempts to tie

Critical Appraisal Of Amazon.Com Current E-Business Strategy And Activities

1477 words - 6 pages advantage of this approach is that the incremental costs to expand the business, whether to multiple product line or geographically, are small. This strategy of perfecting before scaling helps in long-term survival and growth of the company. Customer Focus Since it's beginning, Amazon has always kept focus on the needs of its customer and never lost sight of it. This gives Amazon a strong foothold of the internet retail business. Playing on this

Keynote Address at the International Association of Business

1053 words - 4 pages Keynote Address at the International Association of BusinessCommunicators Conference in ChinaDistinguished guests, Ladies and Gentlemen,It is a great pleasure to be speaking at the International Association of Business Communicators (IABC) conference here in China. On behalf of the United States, it is a privilege to address you on the opportunities and challenges of being a global business manager in today’s global business environment.The

Similar Essays

International Marketing Strategy: A Tgi Business Case For Cameroon

2584 words - 10 pages financial means of the student. The time to collect essential information for this report is an issue of consideration. By the time this work was being compiled, there was other essential information en route to the student. It is of interest of the student to review this report in a later stage.REFERENCEBookDoole, S. and Lowe, R. 2004, International Marketing Strategy: Analysis, Development and Implementation, Thompson.JournalHansted, K. and

The Strategic Risks And Financial Strategy Of International Market Expansion

1486 words - 6 pages diverse countries. The Mars, Inc. utilizes international banking system account to accumulate currency or revenue to remain advantageous of rates and taxes. According to economics Functions of the financial market permits transfers of funds from business without investment opportunities to one who devises them, it benefits in facilitating levitation of capital. In addition financial market has the capability in transferring of liquidity, adjustment of

Investigate That "Game Theory Is Grounded In Well Established Theory, But It Is Too Hard To Use In Developing And Implementing International Business Strategy"

2620 words - 10 pages international business strategy, it is still contributed to the international business strategy. This paper will introduce the game theory briefly, describe some disadvantages of game theory to apply in the international business strategy, and then discuss why game theory can develop and implement international business strategy to support author's argument.Game theory"In simple terms, it is a set of complex mathematical formulae that shows how

Business Strategy Of Virgin Atlantic Airlines

1627 words - 7 pages Business Strategy of Virgin Atlantic Airlines Contents 1) Introduction to airline industry 2) Drivers of globalisation using yip’s model 2.1 Market globalisation 2.2 Cost globalisation 2.3 Globalisation of government policies 2.4 Globalisation of competition 3) Localisation- arguments against globalisation 4) Pestle Analysis 5) Porter’s 5 forces analysis and their application to Airline industry 5.1 Rivalry amongst Existing Firms