Expansion through Internationalization

Introduction

Expansion through internationalization refers to an expansion strategy that helps organizations to market their products or services internationally. Organizations need to devise their strategies to enter into foreign markets. Today, many organizations are internationalizing their business activities because of high competition in domestic markets. Organizations that plan to operate in international markets need to consider various issues, such as government regulations and economic, social, and legal forces that shape the international markets. Thus, international strategies require a different strategic perspective than domestic strategies.

Types of international strategies

According to Bartlett and Ghoshal, there are four types of international strategies, which are as follows:

• International Strategy:

• Creates value by transferring products and services to foreign markets where these products and services are not available. This helps in acquiring market share in foreign markets.

• Multi-Domestic Strategy:

• Tries to customize organization’s products and services according to the local conditions operating in different countries. Multi-domestic strategy, also known as high level of local responsiveness, matches the products and services according to the conditions prevailing in different countries.

• Global Strategy:

• Implies a low cost approach that is based on reaping the benefits of the experience curve. In global strategy, organizations offer standardized products and services across different countries.

• Transnational Strategy:

• Involves both low cost and high level of local responsiveness approaches. This type of strategy requires a creative approach for managing production and marketing goods and services.

Thus, international strategies offer various strategic alternatives for expansion and provide rewards in the form of lower costs, increased sales, and higher profits.