Strategies for competing in international markets

Assalamualaikum.....for this lecture i can understand primary reason companies choose to compete in international markets. Among of reason :

1) to gain access to new customers

2) to further exploit core competencies

3) to spread business risk across a wider market base

4) to gain access to resources and capabilities located in foreign markets

5) to achieve lpwer costs through economies of scale, experience and increased purchasing power

Competing internationally

3 strategic approaches

-multidomestic strategy

-global strategy

-transnational strategy

Strengthening of a company's competitive position

Assalamualaikum.....ok for this topic as we know as a company should have more strength in competitive position.Firstly,the company should making choices that complement a competitive approach and maximize the power of strategy. Among from that

1) offensive and defensive competitive action

2) competitive dynamics and the timing of strategic moves

3) scope of operations along the industry's value chain

Considering strategy enhancing measures

        •Whether and when to go on the offensive.

        •Whether and when to employ defensive strategies.

        •When to undertake strategic moves—first mover, a fast follower, or a late                               mover.

        •Whether to merge with or acquire another firm.

        •Whether to integrate backward or forward into more stages of the industry's activity chain

        •Which value chain activities, if any, should be outsourced.

        •Whether to enter into strategic alliances or  partnership arrangements.

Blue-ocean strategy 

A special kind of offensive

A blue ocean strategy offers growth in revenues and profits by discovering or inventing new industry segments that create altogether new demand

Timing a firm's offensive and defensive strategic moves

1) knowing when to make a strategic move is as crucial as knowing what move to make

2) moving first is no guarantee of success or competitive advantage

3) the risks of moving first to stake out a monopoly position must be carefully weighed

Strengthening a firm's market position via its scope of operations

1) range of its activities performed internally

2) breadth of its product and service offerings

3) extent of its geographic market presence and its mix of businesses

4) size of its competitive footprint on its market or industry

Generic Strategies

For this time my lecturer ask me to answer several question about 5 generic competitive strategies...

1) Broad cost-leadership:

IKEA  : which is they promote with low price strategy and innovatively designed furniture.

2) Focused cost-leadership

MYDIN : they offer wholesale prices all year round that could easily for customer get from branches company 

3)Broad differentation

OLD TOWN KOPITIAM : they own have taste of coffee that are not easily copied and different with their competitors

4)Focused differentation

BONIA : provides a wide variety of high quality leather and fashion products through innovative and creative marketing activities and offer niche customer needs.

Evaluates a Company's Resources, Capabilities And Competitiveness

For this time i have learned how well a company's strategy is working...and understand why a company's resources and capabilities are central to its strategic approach and also how to evaluate their potential for giving the company a competitive edge over rivals.

The best indicator of firm's present strategy working which is they achieving its stated financial and their strategic objectives. And also their firm is an above-average industry performer

Furthermore, a company also should have a specific indicators of strategic success. For instance 

- growth in firm's sales and market share

-acquisition and retention of customers

-strengthening image and reputation with customers

-increasing profit margins, net profits and ROI

-growing financial strength and credit rating

-leadership in factors relevant to market/industry success

-continuing improvement in key measures of operating performance

Besides that, the company should able to seize market opportunity and nullify external 

threats. For example use SWOT analysis as a tool for sizing up firms. 

1-internal strength (the basis for strategy)

2-internal weaknesses (deficient capabilities)

3-market opportunities (strategic objectives)

4-external threats (strategic defenses)

And the importance things in company's strategy is BENCHMARK. 

Benchmarking is a potent tool for improving a company's own internal activities which is we compare with other companies performance and borrowing their "best practices"

Where we can get benchmarking information???

                           -reports, trade groups, analysts and customers

-visits to benchmark companies

-data from consulting firm

Company's External Environment ( PESTEL analysis & Porter's Five Competitive Forces )

Assalamualaikum....ok today i want share about PESTEL analysis & Porter's 5 Competitive Forces

Originally known, pestel analysis is a macro environmental that used to understand of external factors of organization. PESTEL stands for:

1)POLITICAL

for example:

  - Political stability

  - Tax policy

  - Employment and labor law

  - Environmental regulations

  - Trade restrictions

   -Tariffs etc

2) ECONOMY

for example:

 -Economic growth

 -Interest rates

 -Inflation rate

3)SOCIOCULTURAL

for example:

-Age distribution

-Population growth rate

-Emphasis on safety

-Career attitudes

4) TECHNOLOGICAL

for example:

-Basic infrastructure level

-Rate of technological change

-Spending on research & development

-Technology incentives

5) ENVIRONMENTAL

for example:

-Weather

-Climate change

-Laws regulating environment pollution

-Air and water pollution

6)LEGAL

for example:

-Employment law

-Health and safety law

-Data Protection

  PESTLE analysis can be very effective for understanding market and business position. The PESTLE analysis alongside SWOT can be used as a basis for analyzing the business and environmental factors of a project.

Porter's 5 Competitive Forces

Porter has identified 5 basic forces that collectively described of competition in an industry

1- intensity of rivalry among of competitors

2- threat of new entrants to the market

3- bargaining power of buyer

4- bargaining power of supplier

5- new substitute