Mid Term Exam Essay

1132 Words May 15th, 2013 5 Pages
Compare and contrast the traditional motivations for internationalization with the emerging motivations.

Traditional motivations for internationalization were the starting point of expansion. The original mental outlook of foreign operations was that they needed to merely be strategic and organized extensions of the domestic business; therefore, traditional motivations reflected that perspective. For example, one of the initial, traditional motivations was the need to secure key supplies. If a company’s resources were domestically scarce and/or costly, the motivation to expend to a country where the resources needed were widespread became a priority. In addition, companies developed a market-seeking behavior that brought about
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This strategy is commonly seen in companies that have a technologically advanced home country in which they can create and leverage innovations in order to use to their advantage. They initially rely on their home country for new products and then transfer them to less advanced international markets. However, this strategy does not allow companies to be as efficient and flexible as companies with a global strategy because an international strategy lacks a centralized and high-scale operation. Companies that utilize the international strategy achieve their objectives by focusing on national differences. This technique focuses on generating revenue by allowing companies to individualize their products and services in response to consumer preferences, the characteristics of the industry, as well as government regulations within each country. Companies carrying out the multinational strategy commonly have assets and resources that are widely distributed. This allows them to be self-sufficient, carrying out most of their activities locally, therefore having a flexible, active local-responsiveness as compared with the international strategy. The main focus of a global strategy approach is to develop global efficiency by attaining the optimum cost and quality positions for products. These companies focus on manufacturing to capture global

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