International Strategy
This article covers meaning, importance, types, steps & example of International Strategy from marketing perspective.
What is International Strategy?
International strategy is a business plan or strategy created by a company to do its business in international markets. An international strategy requires analyzing the international market, studying resources, defining goals, understanding market dynamics & develop offerings. International strategy for an company looking to grow is a continuous process.
Importance of International Strategy
In marketing and strategy, the market of operation is a very crucial parameter. Thus, a company operating in India cannot employ the same strategies should it want to expand to Russia. So for a company seeking international foothold, framing of an international strategy assumes a very crucial role. Depending upon the business strategy decided, companies either become aggressive exporters and start exporting goods or open their business units in the market they want to capture
Steps for Preparing an International Strategy
To prepare an international strategy, a five step method can be followed. The process is schematically represented and enunciated below.
1. Market Analysis
The first step in forming an international strategy should be analyzing the markets, in general, if not specifically. This will include analysis of general macroeconomic data of the country, balance of trade, trading partners, per capita income, etc.
2. Resource Identification
Next, the company should identify the resources for its international expansion. It is obvious that not all products will fit in all markets.
Also for greater profits, resources with higher competitive advantages must be selected.
3. Set Objectives
The third step in international strategy is setting the international and global objectives, which, counter-intuitively is not done in the first step. The reason is that objectives should be stand-alone and misfits to the market in question.
So a prior market analysis is necessary.
4. Market Entry & Mode
The subsequent step should be deciding the market entry and mode. The company may choose routes like launching of a brand new product or venturing jointly with another willing partner company, already present in that market.
5. Product/Service Offering
The final step in this international strategy process is development of the product or service offering which will encompass details like pricing, products and distribution.
Types & Examples of International Strategies
There are 4 major types of international strategies which are:
1. Global Strategy
This strategy is used by companies which keep the same product or service across multiple markets. The core product offering and features remain the same but there might be some difference in the packaging and promotional activities which may be more suited to the local markets and customs.
Example: Apple & Samsung smartphones are sold globally. All the features & specifications of the phones are the same as the same product is sold worldwide.
2. Glocal Strategy (Transnational)
This strategy is similar to global but adds the local flavor to it. In this strategy, your core offering remain similar to your global markets but add more features and products as per local demands and preferences.
Example: KFC & McDonald's are global brands which have restaurants across the world. As a part of its international strategy, the company has localized menu, food products etc which is best suited for the people of that country.
3. Multi-Domestic
In multi domestic strategy, the companies offer different or similar products/services across different market to exactly match the consumer and local preferences.
Example: An apparel company selling clothes in multiple countries will vary the product line based on climate and customs. They might be selling jacket, overcoats, mufflers in the markets where the general climate is cold whereas they might be selling T-shirts in the markets where there is warmer climate.
Hence, this concludes the definition of International Strategy along with its overview.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.
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