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International Business Practice Essay

3957 words - 16 pages

MGTAE2012 |
International Business Practice |
International Strategies |
Ryan Woodley-Mitchell-329606 |
5/12/2008 |

Tutor: Christine Foulkes |

1 Executive Summary 3
2 Introduction 3
3 Strategy Definitions 3
4 Development of a strategic plan 4
5 Choosing a Strategy 7
6 Conclusion 9
7 Case Studies 10
8 Bibliography 15

Executive Summary
My coursework asks me to write a 2,000-2,500 word report which both explains and illustrates my findings on the well-formulated strategic plans of successful Multinational Enterprises (MNEs). In this report I need to consider how a MNE develops and implements a strategic plan, also, I have to support my ...view middle of the document...

Value creation is a strategy adopted by a company with a strong brand name. The company knows that it can charge more than its competitors because they know that the consumer knows that it is a good product; they perceive value in the product. Lieberman and Montgomery (1988) explain ‘this is because the customer captures some of that value in the form of what economists call a consumer surplus.’ A company can lower the cost of production by increasing the margin between cost and value. This is called a Low-cost strategy. Alternatively they can make the product more attractive to the consumer by using superior design, features and making the product more reliable by offering an after sale service, e.g a warrantee period. This is called a differentiation strategy.
Research and Development (R&D) can also create value within a company. Whether it’s R&D to develop the product to make it more attractive to the customer or whether it’s performed to create more efficient production processes, and cutting the cost of production, being either the production of a product available to a customer or production of a service to be delivered to a customer. You can create value by revising the production methods within the company, by reducing production costs or by producing a higher quality product.
Another department within a company that can increase the value is the marketing and sales department. Marketing and sales functions can increase value through brand positioning and advertising, they can increase the value the customer perceive in the product. So if they can create a better opinion of their product in consumers’ minds, they can increase the value they put on their product.

Development of a strategic plan

SWOT Analysis
To successfully develop a strategic plan a company has to implement extensive research. A good way of doing this is by performing a SWOT analysis of the markets that you are looking to enter. The SWOT analysis discriminates strengths and weaknesses and finds opportunities and tries to eliminate possible threats. It does this by tackling the following questions:
* How can we use each strength?
* How can we improve each weakness?
* How can we exploit each opportunity?
* How can we mitigate each threat?
This form of analysis enables companies identify which direction to pursue.

PEST Analysis
This form of analysis identifies the political, economic, social and technological issues that arise when wanting to expand a domestic operating company into an international company. This highlights all problems with each international market that is analysed. It helps identify the best market to enter into and which market-entry strategy to adopt.

Global Expansion Issues and increasing profitability
This is about identifying and looking into the issues involved when considering international expansion. The issues that firms address when operating internationally or are considering international...

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