Chapter 7 - Strategies for competing in foreign markets. In this chapter, the following content will be discussed: Why companies expand into foreign markets, factors that shape strategy choices in foreign markets, the concepts of multicountry competition and global competition, strategy options for entering and competing in foreign markets, the quest for competitive advantage in foreign markets, strategies to compete in the markets of emerging countries. | Competing in Foreign Markets Screen graphics created by: Jana F. Kuzmicki, . Troy University-Florida Region The Four Big Strategic Issues in Competing Multinationally Whether to customize a company’s offerings in each different country market to match preferences of local buyers or offer a mostly standardized product worldwide Whether to employ essentially the same basic competitive strategy in all countries or modify the strategy country by country Where to locate a company’s production facilities, distribution centers, and customer service operations to realize the greatest locational advantages How to efficiently transfer a company’s resource strengths and capabilities from one country to another to secure competitive advantage Why Do Companies Expand into Foreign Markets? Gain access to new customers Capitalize on core competencies Achieve lower costs and enhance competitiveness Spread business risk across wider market base Obtain access to valuable natural resources Cultures and lifestyles differ among countries Differences in market demographics and income levels Variations in manufacturing and distribution costs Fluctuating exchange rates Differences in host government economic and political demands Cross-Country Differences in Cultural, Demographic, and Market Conditions Consumer tastes and preferences Consumer buying habits Market size and growth potential Distribution channels Driving forces Competitive pressures One of the biggest concerns of companies competing in foreign markets is whether to customize their product offerings in each different country market to match the tastes and preferences of local buyers or whether to offer a mostly standardized product worldwide. How Markets Differ from Country to Country Manufacturing costs vary from country to country based on Wage rates Worker productivity Inflation rates Energy costs Tax rates Government regulations Quality of business environment varies from country to country Suppliers, trade . | Competing in Foreign Markets Screen graphics created by: Jana F. Kuzmicki, . Troy University-Florida Region The Four Big Strategic Issues in Competing Multinationally Whether to customize a company’s offerings in each different country market to match preferences of local buyers or offer a mostly standardized product worldwide Whether to employ essentially the same basic competitive strategy in all countries or modify the strategy country by country Where to locate a company’s production facilities, distribution centers, and customer service operations to realize the greatest locational advantages How to efficiently transfer a company’s resource strengths and capabilities from one country to another to secure competitive advantage Why Do Companies Expand into Foreign Markets? Gain access to new customers Capitalize on core competencies Achieve lower costs and enhance competitiveness Spread business risk across wider market base Obtain access to valuable natural resources Cultures
