International business strategies
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Many business enterprises and organizations view the world as one village today. International business transactions take place worldwide with the realization of huge profits in numerously known companies. The type of business strategy that an organization ventures in determines its success and profitability during its course. The aim, goal, or instead target of any business enterprise is to achieve its target in the stipulated due time. On the other hand, the market industries are flooded by many countries whose companies and organizations seek trading activities for the sale of their products. Due to the uniqueness of the goods and products on sale, companies are required to engage in international business strategies that will win out the competitors hence enabling them to thrive in the global market.
In the article “How Companies Win Out” by Hout, Porter, and Ruddens (1982)), three critical companies have been shown to participate in securing significant market shares by embracing the concept of international business (Cavusgil et al., 1993). The America, Japanese and European companies have devised strategies of thriving in the markets and also making huge profits in the international markets. The only important aspect to consider in their plan is to ensure that they win out their competitors, thus creating an open demand for their products.
In today’s current global environment, a company should engage in international business because there are many advantages that the company will reap from the featured market (Beam, 2002). One of the reasons for this is based on the adoption of a positive change from the old forms of multi-domestic competitor that allows elementary subsidiary firms to compete alone in domestic markets and instead focus on a sizeable worldwide system and position of a market for competition. Hout, Porter, and Rudden’s assert that such companies that engage in international markets get a chance to control leverage points in foreign economies. They will get a chance of understanding their competitor’s sources of cash flow and thus unconventionally lower their prices in the competitive markets.
Financial comparison of two well-known companies, such as Caterpillar and Komatsu, shows a vast difference in how these companies compete in the market (Beam, 2002). Based on their estimated sales of construction material, their return on capital employed, cash flow in operations, among others, it becomes evident that different companies manage to control a varying extent of market share.
Honda, a motorbike manufacturing firm in Japan, embraced similar strategies as described by Hout, Porter, and Rudden. The company focused on the production of unique product amidst others in the market. The 750Cc bike with increased engine efficiency has made the company receive much acclaim in the motor industry worldwide. As Hout, Porter, and Rudden show, it is upon the utilization of the needs gap in the market and introduction of novel ideas that will ensure that companies succeed in international markets.
The majority of Japanese car brands sell quite well in the world today as compared to those from China, America, and even Europe. The aspect of vulnerability has been effective in replacing the notion of invincibility in numerous international businesses. Businesses have put up essential strategic goals in improving their entire competitive positions (Beam, 2002). The increment of a global market share presents another criterion used by companies in the whole world. There have been aspects of an enhanced goal implementation strategy. Any activities of global market participation decrease the risks associated with particular businesses endeavors (Beam, 2002). Other plans include product standardization, concentration, and coordination of value-adding activities and uniform marketing. These offer vital economies of scale hence improving the overall profitability of a company.
References
Beam, H. (2002).From Global to Metanational: How Companies Win in the Knowledge
EconomyFrom Global to Metanational: How Companies Win in the Knowledge Economy By DozYves, SantosJosé, and WilliamsonPeter. Boston, MA: Harvard Business School Press, 2001. Two hundred fifty-eight pages, hardcover, $29.95. Academy Of Management Perspectives, 16(2), 173-174. https://doi.org/10.5465/ame.2002.7173656
Cavusgil, S. T., Zou, S., & Naidu, G. M. (1993). Product and promotion adaptation in export ventures: an empirical investigation. Journal of International Business Studies, 24(3), 479-506.
Hout, T., & Porter, M. E. Rudden. E. (1982). How global companies win out. Harvard
Business Review, September-October, 98-108.