International Strategies

One major component to entering a new market as an international business, is to be sure the product and/or service matches the needs of the market. Things that can affect the failure or success of a newly introduced product can range from cultural traits, values, habits, and norms. There is a lot of research needed to put into these concepts to ensure that the product/service is appropriate for that foreign market. The book uses an example of how Americans prefer moist creamy dessert cakes, which differs from England which prefer dry cakes that can be eaten with tea.

There are four basic questions that international strategists should seek to answer:
Who in the foreign market uses the product?
What are the values of the people in the foreign market?
What are the signals that indicate change in the market?
How can the firm increase market share.

One can see the importance of these questions. There are several ways to tackle these questions. When using product strategy there are five types using different alternations of standardized/customized messages and products. By combining these strategies with the 3 fundamental alternatives successful implementation of a product is possible. This is similar to how MTV entered China, adhering to the cultural differences and traditions to become one of the most successful transnational media corporations.

On the subject of service, there are three broad service categories: people-processing services, possession-processing services, and information-based services. These three strategies facilitate balancing standardization with local customization. Similar to product strategies, these are crucial to the success of international businesses.

All in all, international managers have several strategies that will differ from nation to nation. Carefully analyzing and implementing the right strategy is key for success. The four "P's" of marketing also come into play when approaching entering a foreign market. For manufacturing, different approaches consist of licensing, franchising, management contracts, joint ventures, contractual alliances, and wholly owned subsidiaries. Each approach has a different level of risk pertaining to investment, which must be considered upon penetrating foreign markets. International expansion can prove to be highly profitable or detrimental to the business.