Published by MBA Skool Team, Last Updated: May 16, 2020
What is International Strategy?
International strategy is a business plan or strategy created by a company to do its business in international markets. An international strategy requires analyzing the international market, studying resources, defining goals, understanding market dynamics & develop offerings. International strategy for an company looking to grow is a continuous process.
Importance of International Strategy
In marketing and strategy, the market of operation is a very crucial parameter. Thus, a company operating in India cannot employ the same strategies should it want to expand to Russia. So for a company seeking international foothold, framing of an international strategy assumes a very crucial role. Depending upon the business strategy decided, companies either become aggressive exporters and start exporting goods or open their business units in the market they want to capture
Steps for Preparing an International Strategy
To prepare an international strategy, a five step method can be followed. The process is schematically represented and enunciated below.
1. The first step in forming an international strategy should be analysing the markets, in general, if not specifically. This will include analysis of general macroeconomic data of the country, balance of trade, trading partners, per capita income, etc.
2. Next, the company should identify the resources for its international expansion. It is obvious that not all products will fit in all markets. Also for greater profits, resources with higher competitive advantages must be selected.
3.The third step in international strategy is setting the international and global objectives, which, counter-intuitively is not done in the first step. The reason is that objectives should be stand-alone and misfits to the market in question. So a prior market analysis is necessary.
4. The subsequent step should be deciding the market entry and mode. The company may choose routes like launching of a brand new product or venturing jointly with another willing partner company, already present in that market.
5. The final step in this international strategy process is development of the service offering which will encompass details like pricing, products and distribution.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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