International Strategic
Management
Is It Important Enough to Be
Worth the Complexities?
You do not choose to become global.
The market chooses for you; it forces
your hand.
Alain Gomez, CEO, Thomson, S.A.
Some Reasons
To enter more favorable markets, e.g., faster
growing, more profitable, better government
climate...
To reach new customers
To gain access to lower-cost labor markets
and/or key/lower-cost raw materials
To spread business risk across a wider base
To gain other advantages inherent in location
Different International Strategies
Multidomestic or multinational
Global or international
Transnational
Application of Strategic
Management Process
Use same 3-phase process
External environment(s) differ and are
especially important
Many constraints
May have to do diagnosis & develop
strategies for different countries
Diagnosis
External environment makes the
difference between countries
External scanning & analysis is especially
important
Can use same 5-force model (by country
or region) and same four aspects of
general environment
Still need SWOT and Critical Issues (may
be specific to country or region)
Formulation
Still corporate-level, competitive, & other
strategies
Still need rich range of alternatives
May need different strategies in each nation
or region
Vertical integration has more disadvantages
Partners are usually needed
Need to decentralize more, but this creates
problems
Formulation: Corporate Level
Multidomestic or multinational
Global or international
Transnational
Business Level Strategies
Licensing
Management contracts
Exporting
Joint ventures, production sharing,
subcontract arrangements
Turnkey construction contracts
BOT (build, operate, transfer) contracts
Acquisitions
Green-field development
Implementation
Usual considerations in planning actions:
– Resources
– Support
– Reward systems
– Timing
– Organization structure
– Culture
– Tracking & control systems
Needs for partners again (choice and
relationships are critical)
Organizing (decentralization vs.
centralization)
Staffing
Manage key cultural differences:
– Power distance
– Uncertainty avoidance
– Individualism-collectivism
– Masculinity-femininity
– Time orientation
Implementation (cont.)
Increased need for information & good
financial measures to maintain control
Political risks
Economic risks
Importance & difficulty of maintaining good
host country relationships