Weekly Discussion 7

Please respond to the following: What incentives influence firms to use international strategies? What are the three basic benefits firms can gain by successfully implementing an international strategy? Why? Determine why, given the advantages of international diversification, some firms choose not to expand internationally. Provide specific examples to support your response. As firms attempt to internationalize, they may be tempted to locate their facilities where business regulation laws are lax. Discuss the advantages and potential risks of such an approach, using specific examples to support your response. Respond to Jay: The incentives that influence firms to use international srategies would be to gain easier access to raw materials, to extend a product’s life cycle,to have opportunities to integrate operations on a global scale, to gain access to consumers in emerging markets, and to gain access to consumers in emerging markets. The three basic benefits firms can gain by successfully implementing an international strategy, increased market size, increased economics of scale and learning and also development of a competitive advantage through low-cost, labor,critical resources, or customers. Given the advantages of international diversification some firms choose not to expand because of enviromental trends, because of these conditions, some large multinational firms with diverse products use a multidomestic strategy with certain product lines and a global strategy with others when diversifying goegraghically. Liability of foreignness and regionalization are two important trends influencing a firms’ choice and use of international strategies, particularly international Corporate level strategies. Corporations attempt to internationalize in business have their advantages and potential risk, therefore they have to choose an international entry mode, which consist of exporting, licensing, strategic alliances, acquisitions, and new wholly owned subsidiary, and deal with the characteristic of them. The choice of the entry mode can affect the degree of success the firm achieves by implementing an international strategy.