Discuss

1.

International strategic management involves a management and planning process that formulates comprehensive strategies and objectives that allow a business to exist and grow on an international scale.

2.

The three sources of competitive advantage available to international businesses include worldwide learning, which provides the said business with the opportunity to learn on a global Plainfield thereby acquiring skills necessary for effective management of companies from different parts of the world, secondly is multinational flexibility which is the acquired ability of any given organization in the international market to address and take on various opportunities that arise due to the nature of the micro and macroeconomic environment of the business. Lastly, global efficiency is acquired through cost-minimizing activities while maximizing revenue by taking care of customer needs in the varying markets in international trade.

3.

It is difficult for a firm to exploit these three competitive advantages simultaneously since to do so, the firm would require numerous strategic perspectives. In pursuit of one, it could also fail in another due to the issue of prioritization.

4.

When selecting an entry mode for a new foreign market, a firm should first consider the competition in the said area because areas, where the firm's strategy is competitively unmatched will cause the firm to drown competition-wise. The firm should also consider the kind of trade barriers since these are the rules that guide how trade is conducted in the said area. Another essential factor to consider would be the localized knowledge, a combination of facts about this particular market. When choosing a strategy, the firm should possess sufficient knowledge about the new market.

5.

Exporting is the sale of goods and services from a home country to a foreign country. Exports have increased over the years since most countries have decided to specialize in that countries nowadays buy what they lack instead of trying to find ways to manufacture it. This has increased demand in the international market(Feenstra et al., 2019).

6.

International licensing is the issuing of agreements to foreign companies allowing them to non-exclusively or at times exclusively manufacture some given products for a given period. This may be advantageous to the host country in that there is a likelihood for an increase in job opportunities and an increased revenue offered to the government. However, it may also be disadvantageous since the company may provide stiff competition to other local companies involved in the same trade, leading to the falling of local industries, which reduces productivity in the said country.

7.

Foreign direct investments occur when one company invests in another company in a foreign land. The first type is Horizontal FDI, where investments are made abroad in the same industry; this is advantageous as it reduces competition in the said area and increases market share. It may, however, suffer under regulatory scrutiny. Secondly is vertical FDI, which involves a business investment into a foreign company that it may supply. It is advantageous in that it creates more profit but disadvantageous given it limits flexibility, making it difficult to change or reverse. Finally, there is Conglomerate FDI which is where an investment is made in a different industry. It is advantageous in that it expands market share and promotes diversification, but unfortunately, there is loss compensation in case one business performs poorly.

8.

A joint venture consists of an agreement between given parties who achieve a particular goal and or objective by coming together to form one entity.  It differs from other strategic alliances since the business in other strategic alliances comes together but retains its identity in its strategic partnerships.

 

Outline

 

 

 

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Outline

The document answers all the eight questions asked in detail regarding to the demands of the question.

1. Describes the meaning of international strategic management.
2. Describes three sources of competitive advantage available to international businesses that are not available to purely domestic companies, including; multinational flexibility, global efficiency and worldwide learning.
3. Describes why it is difficult for a firm to exploit these three competitive advantages simultaneously. The main argument being prioritization.
4. Describes what a firm should consider when selecting an entry mode for a new foreign market. This part focuses on; competition, trade barriers and knowledge.
5. Explains the concept of exports and why they are increasing over time.
6. Explains the meaning of International licensing and its advantages and disadvantages.
7. Explains What is FDI? And the three primary forms including; vertical, horizontal and Conglomerate, as well as their advantages and disadvantages.
8. This is the final question, and it provides information on the joint venture in comparison to other strategic alliances.
9. Reference. Shows areas cited.