Internationalization Strategies Essay Example | Topics and Well Written Essays - 2250 words

Internationalization Strategies - Essay Example An organization can also have facilities and economic interests in several countries. According to Hitt, Ireland, Hoskisson (2011), the main reason firms go international is to extend the lifecycle of their products. Firms require expanding to secure required resources. Supply of raw materials has caused many Chinese companies to expand internationally. Industries such as electronics and clothing move their operations to foreign companies due to lower production coasts. Industrialization in different countries has caused similar demand for products. This has caused pressure in several companies to integrate their operations globally. People in developed countries have similarities in lifestyles and companies are forced to expand globally to meet increased demands. Business level- integrated cost leadership and differentiation Every business requires a competitive strategy in its domestic market. In international business the home country is the main source of competitive advantage. T he ability of a firm to expand into international countries depends on the resources and abilities established in the home country. However, as the business expands into the global market, the home country becomes less significant in providing competitive advantage Hitt, Ireland, Hoskisson (2011). As stated by Michael (1998), this advantage occurs in two types: cost leadership and differentiation. ... dership and differentiation are integrated actions aimed delivering goods or services at prices lower than competitors with features acceptable to customers. A business requires efficient scale facilities and control production costs and overhead tightly. Monitoring costs of competitor products helps an organization adjust its prices to lower levels. Advantages The firm concentrates on a segment of customers and tailors its strategies and resources to its service. Hoskisson (2008) argues that strategic competitiveness is achieved when the firm satisfies a group of customers. The firm is committed at providing customers with superior value to gain advantage over competitors. This helps a company increase its profit. For example, Ford Motors estimates that increase in customer loyalty creates approximately $100 million additional profits annually. Firms concentrate more on their core business activities. Firms channel most of their resources on core activities and carry out innovations aimed at satisfying their customers. SAS institute is a software company that allocated more than 30 percent of their revenues to R&D. the firm concentrates on its core competences to serve customers such as the U.S bureau. Companies maintain low costs while serving a wide segment of customers. In the case of airlines, flight attendants may be required to purchase their own uniforms and customers are charged to check luggage. Flight attendants spend time selling products like water, digital cameras and MP3 players to passengers. Global companies can participate in e-commerce. This improves customer relations management. Careful integration of technology in a firm increases successful competition of a business. CEMEX SA, a Mexican global cement company, uses the internet as a link between