International Business Strategy - Assignment Example

 International Business Strategy Introduction The new thinking on international business strategy is based on the assumption that the main challenge, when it comes to the world economy, is the ability to sustain a balance between responsiveness to prevailing economic conditions and economies of scale. Many companies have placed emphasis on scale economies as far as their international operations are concerned (Dunning, 2001, p.174). The major goal in this case is the ability to manage the emerging differences at national borders. The new thinking as far as international business is concerned is that business is not only constrained to a particular environment. In the era of business globalization, business managers and operators have started thinking in a globalized manner in such a way that even the most local business premises operate in an international strategic style. Discussion New Thinking in International Business Strategy International business operators have adopted a new form of business that entails standardization of the product with the intention of offering and bringing together product and service development and processing. In this aspect, multinationals have tried to make one corporation with branches and operations across the world. The thinking in this case is influenced by the precise customer needs and the cultural and geographical factors that impact on the purchasing behavior (Douglas, & Craig, 2011, p.85). Therefore, it is possible to have an international company, say a restaurant, offering entirely different types of goods and services in different parts of the world. This depends on the people living in a certain global locality. Nevertheless, the company’s logo and brand name continue to unite its global customers. Another thinking of international business that has evolved is the arbitrage thinking. This involves the exploitation of the differences that arise between regional and national markets. Business operators are now required to be more vigilant in location of important parts of the supply chain in different regions. For instance, Europeans, mainly value opening many retail shops while Indians value the initiation of call centers to monitor employees and customers and create a better channel of communication (Ghemawat, & Hout, 2008, p.24). Another strategic thinking, that has characterized and shaped international business, is competitive rivalry between different producers and suppliers in the international markets. The adoption of market power and overpowering of rivals is the major strategy that business managers have used to enhance their business operations and outsmart business competition globally. Global Develeopments that Have Shaped the New Thinking This new thinking has been shaped by modern technology and increased awareness of customers across the world. The world has been turned into a smaller region where people can travel in different parts. Every country now comprises of people of different cultural and religious backgrounds. The diverse nature of the customers has helped to shape the nature of international business at great lengths. Companies have learned to produce a diverse customer by targeting the needs of all the people residing in a given locality. The latter has created the need for regular and extensive market research that enables business managers and operators to have a better chance of understanding the customer, both online and in person (Ghamawat, 2007, p.16). The new strategy of modern business operations has involved many companies seeking to grow their businesses outside the home markets. In this perspective, aggregation, adaptation and arbitration, have helped to shape international business. The strategies are necessary to maintain proper balancing of supply and demand across the borders. A business in a new country, for instance, must adopt the adaptation strategy to enable it to get used to the business environment and the customers. The latter is based on the thinking that a new business environment is shaped by different cultural beliefs and practices, different customer tastes and preferences. This has made business operators become more vigilant in their operations by internationalizing and strategically managing operations within and across the borders. In other words, the new thinking on international business has been shaped by the AAA triangle that serves as a suitable strategic map for business managers across the divides. Adaptation has been taken as the major factor facilitating international business operations. This can be noted from the vast amount of finances spent on advertisement by different corporations every year. The same is reflected in the quantity spent on corporate research and development. International business managers have realized that any product in the market must be continually developed based on the persistently changing preferences and needs of the customer. Therefore, market research has become one of the most significant aspects that shape international business thinking (Ghamawat, 2007, p.26). In the light of this, business institutions have specifically emphasized on training, market research skills to students to enable them to fit comfortably into the international business environment. The globalized thinking in business has helped to shape international business because it has improved convenience in the delivery of services and goods to the customer. Before a new business branch is opened in a new geographical region, training and research have been thought to be the best strategy that enables business managers understand the market more comprehensively. This mode of thinking has helped to shape international business in a number of ways. Firstly, corporations have learned the need for quality enhancement as a way of appealing more to customers in the global markets. Quality has been enhanced in all aspects of business, including production, supply chain, and marketing. This has helped to increase the consumer power since customers have a broad range of producers, suppliers and marketers to choose from. The latter has ultimately led to more customer satisfaction as corporations strive to win customer loyalty and trust. In other words, an emerging business strategy characterized by competitive rivalry has created a business environment where the customer is the chief deciding factor. Through the internationalization of business, product and service quality has improved than never before. However, if the monopoly was the case, even in an internationalized business, corporations would continue to oppress the customers by dictating what the customer gets and at what price. Multi-nationalization of corporations and businesses is the significant world development that has helped to shape this mode of business thinking. In this view, producers produce not for a local customer, but for a diverse customer in any part of the world (Dunning, 2001, p.176). Conclusion One of the major global developments that have helped to shape international business is the internet and technological advancements. As logistics and communication networks become more convergent and integrated, many markets have converged. Corporations in various parts of the world are also expanding their operations. Similarly, regional and local markets have become diverse as marketers increasingly encounter cultural and economic heterogeneity. These factors have helped to refocus and rethink better marketing strategies that suit the diverse nature of the global markets. Global marketing has evolved to bring about unity and common mode of thinking of business managers across the world. In this view, many business managers see globalization as the only driving force for the international business of the modern century. Corporations of all sizes have focused on globalization as the only way to efficiently expand their business operations and depict a world-view image of the enterprise. The latter has helped to shape the international business environment and thinking associated with international business by achieving sustainability in international business operations by consideration of the scope of production, supply, and marketing of a particular corporation. The thinking has helped to shape global business through sustainability. Businesses produce for the current customers with the needs of the future customers in mind, based on market research results. Reference List Douglas, S. P. & Craig, C. S., (2011). Developing a Semiglobal Marketing Strategy. Journal of International Marketing, 19(1): 82-101 Dunning, J. H., (2001). The Electric (OLI) Paradigm of International Production: Past, Present and Future. Int. F. of The Economics of Business, 8(2): 173-190 Ghamawat, P. (2007). Managing Differences: The Central Challenge of Global Strategy. Harvard Business Review Ghemawat, P. & Hout, T., (2008). Tomorrow’s Global Giants Not the Usual Suspects. Havard Business Review. Read More