Globalization and International
Strategy
Definitions:
International business: Profit-related activities conducted across national boundaries.
International management: Process of planning, leading, organising and controlling in organisations
engaged in international business.
Explanation
Organisations develop from Domestic markets towards International markets at different rates and some
industries are more prone to this process (e.g. the oil industry) than others (eg constructions, transport,
and services like insurance).
Internationalisation brings risks – currency fluctuations, political changes, etc. so organisations may be
slow to develop s fully global presence.
Methods of international development
In the first instance organisations might create an Export Department or website
Next, they might open a marketing office in the host country
Then they might invest in production facilities –much more risky.
Other avenues include:
- Licensing of products or production techniques
- Strategic alliances with partners from the host country
- Wholly- or partly-owned subsidiaries – may include both marketing and production, and
may issue shares locally.