International Business: Strategy, Markets, Entry Modes, and Marketing

Planning

The process of identifying and selecting an organization's objectives and deciding how the organization will achieve them.

Strategy

The set of planned actions taken by managers to help a company meet its goals.

Corporate Level Strategy

Focuses on the overall scope of the firm, managing a portfolio of businesses across countries.

Business Level Strategy

Focuses on how a specific business unit competes within its industry.

Departmental Level Strategy

Focuses on how functional areas implement policies that support the business- and corporate-level strategies.

International Division Structure

Groups all international activities into a single separate division, leaving domestic operations untouched.

International Area Structure

Organizes the company's global operations into specific geographic regions, ideal when local responsiveness is critical.

Global Product Structure

Divides the company by product lines worldwide, emphasizing global efficiency and product knowledge over local adaptation.

Global Matrix Structure

A dual-chain of command where local managers report to both a geographical area manager and a product division manager.

Self-Managed Teams

Employees who are given the autonomy to manage their daily work schedules, assignments, and quality checks.

Cross-Functional Teams

Composed of employees from different departments working together on a single project.

Global/Virtual Teams

Geographically dispersed team members who collaborate electronically across borders to solve international business challenges.

Identify Basic Appeal

Assess basic demand for the product and resource availability.

Assess the National Business Environment

Analyze macro factors like political risk, economic stability, legal systems, cultural barriers, and infrastructure constraints.

Measure Market or Site Potential

Examine purchasing power, industrial growth, and demographic trends.

Select the Market or Site

Conduct final on-site analysis, competitor assessments, and financial analysis before committing resources.

Secondary Data

Information that already exists somewhere, having been collected for another purpose.

Primary Data

Original information gathered specifically for the current research objective.

Problems with Conducting International Research

Issues like availability of data, comparability of data, and cultural differences can skew results.

Sources of International Data

Includes international organizations, government agencies, and trade associations.

Exporting

The sale of goods or services produced in one country to buyers residing in another country.

Letters of Credit (L/C)

A guarantee issued by a bank ensuring the exporter receives payment as long as specific shipping documents are presented.

Bill of Exchange (Draft)

A document ordering an importer to pay an exporter a specified sum of money at a specified time.

Open Account

The exporter ships goods directly to the importer, who bills them later.

Licensing

A company grants intangible property rights to another entity for a specific period in exchange for a royalty fee.

Franchising

A specialized form of licensing where the franchisor provides a complete brand name and business model.

Turnkey Projects

A contractor handles every detail of a project for a foreign client and hands over the 'key' once operational.

Management Contracts

One company supplies its management expertise to another company for a specified period of time in exchange for a fee.

Wholly Owned Subsidiary (FDI)

A facility entirely owned and controlled by a single parent company.

Joint Venture

An independent entity created and jointly owned by two or more parent companies.

Strategic Alliance

A cooperative relationship between two or more firms to share resources without forming a separate legal corporation.

Countertrade

Selling goods or services that are paid for, in whole or in part, by other goods or services instead of hard currency.

Standardization

Keeping the product completely identical across all international markets to save costs.

Adaptation

Modifying a product's features, packaging, or functional characteristics to match local consumer tastes.

Push Strategy

Directing marketing efforts at intermediaries to push products through distribution channels.

Pull Strategy

Directing heavy advertising and consumer promotions toward final consumers to create brand demand.

Intensive Distribution

Placing products in as many retail outlets as possible.

Exclusive Distribution

Giving only one or two distributors the right to sell a product within a specific geographic territory.

Worldwide Pricing

Charging the exact same price for a product regardless of the global destination.

Dual Pricing

Charging different prices for the same product in domestic vs. international export markets.

Transfer Pricing

The internal pricing charged when one subsidiary sells goods to another subsidiary.

Marketing Communication

The process of sending promotional messages about products to target audiences across international borders.

Reinvestment

Funneling profits back into an existing foreign market to expand operations.

Divestment

Scaling back operations, selling off assets, or completely exiting a foreign market.