1、1 Going International Richard. E. Caves Management and Administration, Macmillan Press Ltd., 2005 Business enterprises have become increasingly international but most of them go international by a process of creeping incremental-ism rather than by strategy choice. Some firms are first attracted to f
2、oreign markets by unsolicited export orders and, after discovering new opportunities, move through a series of stages to the establishment of foreign production facilities. Other firms initiate international activities in response to threats to an oligopoly position. Still others respond to specific
3、 opportunities for developing supplies of resources, acquiring foreign technology, or achieving greater production efficiency through foreign operations. And at some stage of becoming a global enterprise, many firms could be best characterized as a portfolio of diverse and separate country companies
4、 tied together by a network of ad hoc relationships. Rarely are these early moves part of a comprehensive global strategy. But as pressures arise from competition in an international scale and from country control programs, and as firms become increasingly aware of synergistic benefits, more and mor
5、e are building global strategies and adopting global planning procedures. A global strategy is a plan expressing an enterprises strategy for maximizing its chosen objectives through geographical allocation of its limited resources, taking into account competition from whatever geographical source an
6、d the geographical opportunities and constraints. A global strategy encompasses the planning, timing, and location of a firms activities and resources as well as its strategies for how it will enter new markets, what it will own, and how it will manage the global operation. The construction of a glo
7、bal strategy on a rational basis requires a careful assessment of the global alternatives and the risks involved for each. To build a global strategy, the decision 2 maker must be free of any national blinders and consider world markets and world resource locations and now simply the markets or reso
8、urces of a particular country in isolation. A global strategy aims at maximizing results on a multinational basis rather than treating international activities as a portfolio of separate country business. The basic reasons for having a global strategy are that most product and factor markets extend
9、beyond the boundaries of a single country and the competition that ultimately determines performance is not constrained to individual locations and country markets. To remain competitive, or to become competitive, the strategy horizon for most firms must, therefore, encompass threats and opportuniti
10、es of both domestic and foreign origin. If its domestic competitors extend their horizons to include a broader scale base, the firm could find itself unable to maintain the same pace of research or product development given its smaller scales base. Even where domestic competition is not moving rapid
11、ly to other markets, foreign firms may be developing strategies that pose a threat. European and U. S. firms in a number of industries were largely unprepared for the competitive challenge when the Japanese firms broke into their traditional markets xn a significant scale. Automotive firms that had
12、failed to build global coverage in the price segments the Japanese attacked were at an intermediate cost disadvantage. In the motorcycle industry the effects of leaving rapidly growing markets to Japanese competitors were even more dramatic. Many well-known firms disappeared completely. Many U. S. f
13、irms did not need in the past to think globally at the early stages of a products life because leadership coincided with achievement in the U. S. market. With its large population, high-wage rates, high discretionary spending power, and high propensity to innovate, the U-S. market was for many years
14、 the leader in adoption and growth rates for many products. Conversely, firms outside the United States had more need to plan globally from the beginning of any product development. A U. K. firm introducing a technological advance was likely to find that U. S. demand grew more rapidly than U. K. dem
15、and. If U. K. demand was left to U. S. competitors, the sales and experience of U. S. competitors soon outpaced that of the U. K. firm. Now that U. S. wage rates and per capita GNP no longer have such a lead over Europe, 3 perhaps, U. S. firms in their turn should be designing products against Europ
16、ean markets that might lead the United States in adoption of those products. Absence of global thinking also shows up where firms have been left behind in the competitive race because they failed to tap the cheapest sources of supply. In still other cases, firms may have achieved global market share
17、 and cheapest supplies, but at the expense of their financial strength or flexibility relative to foreign competitors. Assisted by a fluctuation in demand or technological changes, smaller competitors have been able to overtake them. Since there are so many countries in the world, the multinational
18、firm must establish priorities for selecting those markets against which it will make this strategic evaluation and choice of its business mission. It must decide whether strategic evaluation is carried out against one major single market, many single markets, or some segments of many markets. It mu
19、st also decide how it is going to organize the responsibility for carrying through this strategic assessment. Will it be done by central headquarters, by multinational committees, or by national units? In the major single market, or central market, approach, the firm selects its mission based on one
20、 national market and establishes a marketing mix, and later expands to other national markets. This approach reduces decision problems and can bring high profits because of the low marginal cost of geographic extensions. But which central market should the firm choose? Normally, the firm begins with
21、 its home market, but this may not be the best choice. Some Japanese and European firms have selected the high-income, sophisticated U. S. market for selected product lines. The sizes of the U. S. market have both advantages and disadvantages. Many Europeans see the cost of communications and coordi
22、nation efforts in such a large market as a deterrent to producing products first in the United States as part of their world product strategy. The multiple market approach implies a high degree of decentralization. It may be the best strategy in situations where special local conditions require particular products, such as fertilizers and pesticides, where economies of large-scale production are not important, and where the firms competitive advantage depends upon
