International Strategy and Corporate Social Responsibility (CSR)

1⃣ What is International Strategy?

• Definition: A plan of action by which a business expands its operations into new global markets to achieve growth and competitiveness.

2⃣ What are the main reasons for International Expansion?

1. Market Development: Access to new customer bases.

2. Economies of Scale: Lower average costs due to larger production volumes.

3. Diversification of Risk: Reducing dependency on the domestic market.

4. Access to Resources: Acquiring cheaper raw materials or labor.

5. Competitive Advantage: Gaining a stronger position in the global market.

3⃣ What are the main methods of International Expansion?

1. Exporting: Selling products directly to foreign markets.

2. Licensing: Allowing a foreign company to produce and sell products under the business's name.

3. Franchising: Expanding the brand through franchise agreements.

4. Joint Ventures: Partnering with foreign companies to enter the market.

5. Direct Investment: Establishing or acquiring facilities abroad.

4⃣ What is Globalisation?

• Definition: The increasing integration and interdependence of national economies through trade, investment, capital flow, labor migration, and technology.

5⃣ What are the advantages of Globalisation?

1. Larger Market Access: More customers and higher sales potential.

2. Economies of Scale: Cost reductions through mass production.

3. Access to Technology: Sharing innovations across borders.

4. Diverse Labor Markets: Hiring from a larger pool of global talent.

6⃣ What are the disadvantages of Globalisation?

1. Increased Competition: Local businesses may struggle against global brands.

2. Currency Fluctuations: Risk of exchange rate volatility.

3. Cultural Barriers: Differences in language, customs, and regulations.

4. Political Risk: Instability or changes in government policies.

7⃣ What are Trade Barriers?

• Definition: Restrictions imposed by governments on international trade to protect local businesses.

• Types:

  • Tariffs: Taxes on imported goods.

  • Quotas: Limits on the amount of imported goods.

  • Subsidies: Government support to local businesses to reduce costs.

8⃣ What is Corporate Social Responsibility (CSR)?

• Definition: A business's commitment to contribute positively to society, including social, economic, and environmental concerns.

9⃣ What are the main elements of CSR?

1. Environmental Responsibility: Reducing pollution and managing waste.

2. Social Responsibility: Fair treatment of employees, ethical supply chains, community support.

3. Economic Responsibility: Contributing to the economic growth of communities and countries.

🔟 What are the benefits of CSR for a business?

1. Enhanced Brand Image: Positive public perception and stronger brand loyalty.

2. Employee Motivation: Greater job satisfaction and morale.

3. Risk Management: Reducing risks associated with unethical practices.

4. Competitive Advantage: Differentiation through ethical practices.

1⃣1⃣ What are the disadvantages of CSR for a business?

1. Higher Costs: Ethical practices and sustainable sourcing may increase costs.

2. Short-term Profit Sacrifice: Immediate costs may outweigh long-term benefits.

3. Potential for Greenwashing: If not implemented genuinely, it can damage reputation.

1⃣2⃣ How does CSR link to Competitive Advantage?

• Companies that engage in CSR can differentiate themselves from competitors, appealing to ethically-conscious consumers and attracting talent.

1⃣3⃣ What is the Triple Bottom Line?

• Definition: A framework for measuring business success through three areas:

  1. Profit: Financial performance.

  2. People: Social impact.

  3. Planet: Environmental impact.

1⃣4⃣ What is Ethical Trading?

• Definition: Ensuring fair wages, safe working conditions, and ethical treatment of workers in supply chains.

1⃣5⃣ What is Sustainable Development?

• Definition: Meeting the needs of the present without compromising the ability of future generations to meet their own needs.

1⃣6⃣ What is Social Audit?

• Definition: An evaluation of a company's procedures, codes of conduct, and policies concerning social responsibility.

1⃣7⃣ What are the main ethical considerations for international strategy?

1. Labor Standards: Ensuring fair wages and working conditions.

2. Environmental Impact: Reducing pollution and managing natural resources responsibly.

3. Cultural Sensitivity: Adapting to local customs and avoiding cultural insensitivity.

4. Anti-corruption Measures: Preventing bribery and unethical business practices.

1⃣8⃣ How is CSR evaluated in a business strategy?

• Through:

  1. Social Audits: Regular checks on ethical practices.

  2. CSR Reporting: Publicly reporting on sustainability and ethical initiatives.

  3. Stakeholder Feedback: Engaging with communities, customers, and employees.