International Awareness in Strategic Management


An international strategy is a strategy used when business transactions have taken place to sell goods and services outside its domestic market. As a manager, with profit and loss responsibilities, for an international business unit, I would prefer to adapt our business strategy to local customs in each foreign country when a decentralized organizational decision making structure is used. A multi- country competition is the best fit for decentralized decision making structure.

There are four different strategic reasons that justify a business scope expansion from domestic to foreign markets: capture additional opportunities outside the domestic market, achieve global economies of scale that lower the costs beyond what is possible from domestic sales volume, achieve more earnings from existing strengths by transferring or sharing them in foreign operations, and reduce cost of operations by sourcing from lower cost suppliers located outside the domestic industry. Thus companies are better off by expanding global so they should implement international strategies.

Global strategy is one of the international strategies. It is a pattern of action to achieve competitive advantage by going for global economies of scale, requires coordination throughout corporation and centralized decision making that takes away authority of country managers to make changes even if it might be best for the unique requirements in their scope of operations.

Multi-country strategy is another strategy of international strategy. It is a pattern of action to achieve competitive advantage by allowing country area managers to be autonomous and exercise decentralized decision making to respond to needs of each country market without coordinating with corporation’s other country managers.

If the business decision making structure is centralized, the global competition is better approach to international business because organizational decision-making structure contributes relatively more toward strategic success. Similarly, a decentralized organizational decisionmaking structure is the best fit for a multi country strategic approach who seeks to sustainable a competitive advantage by a pattern of action that responds better than their rivals in each country-level strategic situation.

According to the old saying, “When in Rome, do as the Romans do,” it refers to a decentralized decision making structure. Depending on the product that company offers, we must choose between a multi country strategy or a global strategy. The profitability of product depends on its features, culture, and religion. If we chose shoes as a product from Nike, I think it would make better strategic sense to employ a multi country strategy since under this strategy, same brand name is offered worldwide but decisions should be taken from local managers.

Each country has a different choice preference which leads the local managers to decide what type of features to sell in that country. Different countries follow different religious cultures for example fire is the god for some people thus shoes having designs of fire on shoes could be offensive for those people. Thus local managers have to decide according to that country’s cultural barriers, what designs, colors, and shapes should be sold. Rivals competing in one country market differ from set of rivals competing in another country market which means Puma might be main rival in one country while Reebok would be a rival in another country. Thus local company managers has to decide how to market their company’s product and against which company to compete with. Nike advertising in USA has different celebrity for athlete shoes compared to celebrity endorsing in another country because one country has different fan from another country.

While selling products outside one nation, there are many rules, regulations, and government interferences that company has to deal with. These regulations are handled by local managers because each country has different government and their own rules to follow, so the company needs decentralized characteristics. Some country has government rules of using product materials from their own country to increase the country’s revenue, so managers have to make deals with local suppliers for raw materials, manufacturing shoes locally, and distributing to local customers.

On the other hand, according to the global strategy, business decisions are taken on a common basis because many of same rivals compete in many of the same country markets.

Unlike multi country strategy, under global strategy company sell same products under same brand. There are no individual local suppliers; they compete on worldwide competitive advantage. As a result, managers are supposed to follow global strategy rather than managers using their own business strategy to local customers.

One of the examples of global strategy is company selling laptops like Dell and HP. Dell can sell laptops to all countries of the world. For this company, decisions need to be taken on a common basis by using global strategy. Since profitability of the company depends on the nature of products like laptop, it is possible to sell same product under same brand name worldwide yet without offending any culture, religion, or other aspects. Under global competition, a firm’s competitive position in one country is affected by its position in other countries because it depends on how well a company operates worldwide and where does it stand globally compared to its rivals. Looking at the competitive strategy, it is advantageous for company to sell laptops on a standardized base which has low cost and indirectly affects the economies of scale. Local managers do not need to make individual business strategic decisions because all laptops are sold

same all over the world which includes standardized software too. This explains that a global strategy is used for a centralized business decision making structure.

In conclusion, a decentralized organizational decision-making structure is the best fit for a multi-country strategic approach to international business because multi country strategic approach has sustainable competitive advantage that responds better than rivals in each country level strategic situation, local country level managers know local strategic situation, and can respond faster than corporate managers in central headquarters who are far away from the local country. Thus local managers need to have their own strength to make decisions so they can better respond to their local strategic situation. The only way to give local managers this freedom is by giving them the authority to make decisions, “When in Rome, do as the Romans do.”