Strategies for Operating Internationally

Strategies for Operating Internationally

Joint Ventures and Strategic Alliances

• Partnerships established between two businesses can increase their reach and market penetration. This could involve significant knowledge sharing, resources, and technology.
• Assess the relevance and importance of synergy between the businesses for a successful international operation.

Franchising

• This is a commonly used method for business expansion where a franchisee obtains the right to use a franchisor’s business model and brand.
• Factoring in aspects such as territory, market size, and feasibility of implementing the franchise model are essential.

Licensing

• Licensing allows another company in a different territory to produce your product, reducing the risk of exporting but provides lower potential returns.

Exporting

• Direct exporting involves selling directly in the foreign market, whereas indirect exporting involves selling to an intermediary who then sells the products abroad.
• Be aware of complexities such as language barriers, cultural differences, and logistics.

Foreign Direct Investment (FDI)

• Ownership of facilities in a foreign country can be achieved through mergers, acquisitions, or start-ups.

E-commerce

• Advantages include lower transaction cost, increased reach, potentially wider customer base, and real-time feedback.
• Highlight the role of technological advancements and digital strategies in broadening international operations.

Risk Management

• Identify, quantify, and manage the risks associated with international trade, including economic, political, and exchange rate risks.
• Remember the necessity of contingency plans to deal with potential risks and how it influences a company’s international strategy.