ASA University Bangladesh (ASAUB)

AN ASSIGNMENT
On
International Strategic to expand the
Business of Bangladesh
COURSE CODE : MGT 506
COURSE NAME : ST!T"GI# M!$!G"M"$T
PROGRAM NAME : MB! %&
SEMESTER : S'I$G ( )0*+
SUBMITTED TO
Md M!tahar"l Isla#
!ssociate 'rofessor
,acult- of Business
!S! .$I/"SIT0 B!$G1!2"S3 %!S!.B&
SUBMITTED B$
PAN%A& %UMER SA'A
ID : *4()(*+(006)
BATC' NUMBER : *5th
SECTION : "
Date !( S")#issi!n* )4th !pril6 )0*+
+ETTER O, TRANSMITTA+


)4th !pril6 )0*+
To6
Md7 Motaharul Isla8
!ssociate 'rofessor
,acult- of Business
!S! .ni9ersit- Bangladesh %!S!.B&
Su:;ect: Su:8ission of !ssign8ent7
2ear Sir6
I a8 9er- glad to infor8 -ou that under -our <ind guidance = Instruction7 I ha9e
#o8pleted 8- !ssign8ent paper on International Strategic to expand the
Business of Bangladesh 7 I ha9e tried 8- :est to 8a<e it a good one >ithin gi9en
ti8e7 !n- sort of suggestion regarding this ter8 paper >ould :e gladl- appreciated
and >e >ould :e gratified if this paper ser9es its purpose7
?e are pleased to pro9ide -ou this ter8 paper >ith necessar- notes6 reference and
>e shall :e a9aila:le for an- clarification6 if re@uired7
Sincerel- 0ours6
AAAAAAAAA77
'an<a; Bu8er Saha
I2: *4()(*+(006)
Batch: *5
th
'rogra8: MB! % &
!S! .ni9ersit- Bangladesh %!S!.B&
-De.larati!n/
I do here:- sole8nl- declare that the >or< presented in this !ssign8ent paper
#arried Out :- 8e and has not :een pre9iousl- to an- others
.ni9ersit-C#ollageCOrganiDation7
The >or< I ha9e presented dose not :reach an- exciting cop-right no portion
of this !ssign8ent paper is copied fro8 an- >or< done 7
I further underta<e to inde8nif- the depart8ent !gainst an- loss or da8age
arising fro8 :reach of the forgoing o:ligation 7
AAAAAAAAAAAA7
'an<a; Bu8er Saha
I2: *4()(*+(006)
Batch: *5
th
'rogra8: MB! % &
!S! .ni9ersit- Bangladesh %!S!.B&
Ta)le !( C!ntents
Intr!d".ti!n*
International Strategic Manage8ent is a planning process of de9eloping
international strateg- in the direction of achie9ing strategic(fit :et>een the
organiDationEs co8petence = resources and the glo:al en9iron8ent under >hich it
S+ N! Parti."lars
0
!c<no>ledge8ents
1
Introduction
2
O:;ecti9e
3
I8portance of International strateg-
4
Methodolog-
5
Identif-ing Business Opportunities in Bangladesh
6
International Strategies
7
Benefits of International Strateg- !ppl-ing in Bangladesh
8
2eter8inants of $ational !d9antage
09
Business 'olic- in Bangladesh
00
S?OT !nal-sis
01
3O? 2O ,IMS GO I$T"$!TIO$!1F G "$T0 ST!T"GI"S
02
is<s in Bangladesh "n9iron8ent
03
Su88ar-
04
,indings
tends to operate7 It is an ongoing process that adhere an organiDation to co8pete in
an international scenario7 International Strategic Manage8ent %ISM& is an ongoing
8anage8ent planning process ai8ed at de9eloping strategies to allo> an
organiDation to expand a:road and co8pete internationall-7
Business li9es in a d-na8ic en9iron8ent >hich is changing 9er- fast7 So to <eep
up >ith the pace of change and to update = upgrade of 9alue in the 8ar<eting
theor-Es principles and practices 8ust :e a continuous :asis7 In :rief 8ar<eting
acti9ities are perpetual acti9ities7 .nile9er follo>s these principles and
continuousl- in9ol9e in 9alue inno9ation7
O):e.tive !( Internati!nal Strategi.*
International strategy is A strategy through which the firm
sells its goods or services outside its domestic market.
#o8panies adopt an international strateg- >hen the- ai8 to le9erage their core
co8petencies :- expanding opportunisticall- into foreign 8ar<ets7 International
fir8s include the li<es of Mc2onaldHs6 Bellogg6 Google6 3air6 ?al(Mart6 and
Microsoft7
The international 8odel relies on local su:sidiaries in each countr- to ad8inister
:usiness as instructed :- head@uarters7 So8e su:sidiaries 8a- ha9e freedo8 to
adapt products to local conditions as >ell as to set up so8e light asse8:l-
operations or pro8otion 'rogra8s7 Still6 ulti8ate control resides >ith 8anagers at
head@uarter >ho reason the- :est <no> the :asis and potential extension of the
co8pan-Es core co8petencies7
3istoricall-6 critical ele8ents of the co8pan-Es 9alue chain6 such as research and
de9elop8ent to :randing6 ha9e :een centraliDed at head@uarters7

I#;!rtan.e !( Internati!nal strategy*
International :usiness strateg- refers to plans that guide co88ercial transactions
ta<ing place :et>een entities in different countries7 T-picall-6 international
:usiness strateg- refers to the plans and actions of pri9ate co8panies rather than
go9ern8entsI as such6 the goal is increased profit7
Most co8panies of an- apprecia:le siDe deal >ith at least one international partner
at so8e point in their suppl- chain6 and in 8ost >ell(esta:lished fields co8petition
is international7 Because 8ethods of doing :usiness 9ar- apprecia:l- in different
countries6 an understanding of cultural and linguistic :arriers6 political and legal
s-ste8s6 and the 8an- co8plexities of international trade is essential to
co88ercial success7
2o8estic strategic planning onl- includes the product and strateg- that has to do
>ith that product and target 8ar<ets7 International strategic planning includes
different cultures so for each culture the product 8a- ha9e to :e 8odified7 So8e
countries 8a- also allo> :ri:es and expect it in order to allo> the product into
their countr-7 !ll these factors ha9e to account for >hen introducing the product
>hile do8esticall-6 these issues do not exist7 #ertain legal issues also need to :e
loo<ed at and anal-Ded in order to 8a<e sure that e9er-thing is done legall- and all
the proper paper>or< is done in order to ensure that in the end the product or its
8ar<eting is not :rea<ing an- la>s7 ! 8ar<et stud- needs to also :e done to 8a<e
sure the product doesnHt offend the people in that 8ar<et7
Meth!d!l!gy*
,or this stud- 8ainl- secondar- data and infor8ation ha9e :een used7 In so8e
cases pri8ar- infor8ation has :een used to clarif- the decision of inno9ati9e side7
Secondar- data and infor8ation ha9e :een collected fro8 internet6 ne>spaper6
existing literature6 8agaDines etc7 'ersonal o:ser9ation has :een a <e- source for
data 9alidit- and relia:ilit-7 So8eti8es personal inter9ie> has :een conducted
>ith 9arious e8plo-ees of different 8o:ile phone co8panies7 /arious 8ass 8edia
ad9ertising are closel- o:ser9ed and ta<ing the reaction of 9ie>ers for creati9e
ad9ertising7
-INTERNATIONA+ STRATEG$ TO E<PAND
BUSINESS O, BANG+ADES'/
Identi(ying B"siness O;;!rt"nities in Bangladesh*
! strateg- through >hich the fir8 sells its goods or ser9ices outside its do8estic
8ar<et
Reas!ns (!r an Internati!nal Strategy*
J 'otential ne> opportunities
J Inno9ation occurs in ho8e(countr- 8ar<et and de8and for product
de9elops in other countries
J"xtend product life c-cle
JSecure needed resources
J'ressure for glo:al integration and glo:all- :randed products
JGlo:al econo8ies of scale
J3igh potential de8and for products and ser9ices
J#urrenc- fluctuations and tariffs
Internati!nal Strategies*
,ir8s can choose one or :oth of t>o :asic t-pes of international Strategies:
= Business >level strategy*
,ollo>s generic strategies of lo> cost6 differentiation6 focused lo> cost6 focused
differentiation6 or integrated lo> cost and differentiation
There are four generic strategies that are used to help organiDations esta:lish a
co8petiti9e ad9antage o9er industr- ri9als7 ,ir8s 8a- also choose to co8pete
across a :road 8ar<et or a focused 8ar<et7 ?e also :riefl- discuss a fifth :usiness
le9el strateg- called an integrated strateg-7
0 C!st +eadershi; G OrganiDations co8pete for a >ide custo8er :ased on price7
'rice is :ased on internal efficienc- in order to ha9e a 8argin that >ill sustain
a:o9e a9erage returns and cost to the custo8er so that custo8ers >ill purchase
-our productCser9ice7 ?or<s >ell >hen productCser9ice is standardiDed6 can ha9e
generic goods that are accepta:le to 8an- custo8ers6 and can offer the lo>est
price7 #ontinuous efforts to lo>er costs relati9e to co8petitors is necessar- in
order to successfull- :e a cost leader7 This can include:
Building state of art efficient facilities %8a- 8a<e it costl- for co8petition
to i8itate&
Maintain tight control o9er production and o9erhead costs
Mini8iDe cost of sales6 =26 and ser9ice7
P!rter?s 4 ,!r.es M!del
"arlier >e discussed 'orterEs Model7 ! cost leadership strateg- 8a- help to re8ain
profita:le e9en >ith: ri9alr-6 ne> entrants6 suppliersE po>er6 su:stitute products6
and :u-ersE po>er7
i9alr- G #o8petitors are li<el- to a9oid a price >ar6 since the lo> cost fir8
>ill continue to earn profits after co8petitors co8pete a>a- their profits
%!irlines&7
#usto8ers G 'o>erful custo8ers that force fir8s to produce goodsCser9ice
at lo>er profits 8a- exit the 8ar<et rather than earn :elo> a9erage profits
lea9ing the lo> cost organiDation in a 8onopol- positions7 Bu-ers then loose
8uch of their :u-ing po>er7
Suppliers G #ost leaders are a:le to a:sor: greater price increases :efore it
8ust raise price to custo8ers7
"ntrants G 1o> cost leaders create :arriers to 8ar<et entr- through its
continuous focus on efficienc- and reducing costs7
Su:stitutes G 1o> cost leaders are 8ore li<el- to lo>er costs to entice
custo8ers to sta- >ith their product6 in9est to de9elop su:stitutes6 purchase
patents7
1 Di((erentiati!n ( /alue is pro9ided to custo8ers through uni@ue features and
characteristics of an organiDationEs products rather than :- the lo>est price7 This is
done through high @ualit-6 features6 high custo8er ser9ice6 rapid product
inno9ation6 ad9anced technological features6 i8age 8anage8ent6 etc7 %So8e
co8panies that follo> this strateg-: olex6 Intel6 alph 1auren&
#reate /alue :-:
1o>ering Bu-ersE #osts G 3igher @ualit- 8eans less :rea<do>ns6 @uic<er
response to pro:le8s7
aising Bu-ersE 'erfor8ance G Bu-er 8a- i8pro9e perfor8ance6 ha9e
higher le9el of en;o-8ent7
Sustaina:ilit- G #reating :arriers :- perceptions of uni@ueness and
reputation6 creating high s>itching costs through differentiation and
uni@ueness7
Ris@s !( Using a Di((erentiati!n Strategy
.ni@ueness
I8itation
1oss of /alue
P!rter?s ,ive ,!r.es M!del G "ffecti9e differentiators can re8ain profita:le e9en
>hen the fi9e forces appear unattracti9e7
i9alr- G Brand lo-alt- 8eans that custo8ers >ill :e less sensiti9e to price
increases6 as long as the fir8 can satisf- the needs of its custo8ers %audio
files&7
Suppliers G Because differentiators charge a pre8iu8 price the- can 8ore
afford to a:sor: higher costs and custo8ers are >illing to pa- extra too7
"ntrants G 1o-alt- pro9ides a difficult :arrier to o9erco8e7 Su:stitutes
%trans7 +()6& G Once again :rand lo-alt- helps co8:at su:stitute products7
2
,!."sed +!A C!st( OrganiDations not onl- co8pete on price6 :ut also select a
s8all seg8ent of the 8ar<et to pro9ide goods and ser9ices to7 ,or exa8ple a
co8pan- that sells onl- to the .7S7 go9ern8ent7
3 ,!."sed Di((erentiati!n ( OrganiDations not onl- co8pete :ased on
differentiation6 :ut also select a s8all seg8ent of the 8ar<et to pro9ide goods and
ser9ices7
,ocused Strategies G Strategies that see< to ser9e the needs of a particular custo8er
seg8ent %e7g76 federal go9ern8ent&7
#o8panies that use focused strategies 8a- :e a:le ser9e the s8aller seg8ent %e7g7
:usiness tra9elers& :etter than co8petitors >ho ha9e a >ider :ase of custo8ers7
This is especiall- true >hen special needs 8a<e it difficult for industr-(>ide
co8petitors to ser9e the needs of this group of custo8ers7 B- ser9ing a seg8ent
that >as pre9iousl- poorl- seg8ented an organiDation has uni@ue capa:ilit- to
ser9e niche7
Ris@s !( Using ,!."sed Strategies*
Ma-:e out focused :- co8petitors %e9en s8aller seg8ent&
Seg8ent 8a- :eco8e of interest to :road 8ar<et fir8%s&
4 Using an Integrated +!A>C!stBDi((erentiati!n Strategy
This ne> strateg- 8a- :eco8e 8ore popular as glo:al co8petition increases7
,ir8s that use this strateg- 8a- see i8pro9e8ent in their a:ilit- to:
!dapta:ilit- to en9iron8ental changes7
1earn ne> s<ills and technologies
More effecti9el- le9erage core co8petencies across :usiness units and
products lines >hich should ena:le the fir8 to produce produces >ith
differentiated features at lo>er costs7
Thus the custo8er realiDes 9alue :ased :oth on product features and a lo> price7
South>est airlines is one exa8ple of a co8pan- that does uses this strateg-7
3o>e9er6 organiDations that choose this strateg- 8ust :e careful not to: :eco8ing
stuc< in the 8iddle i7e76 not :eing a:le to 8anage successfull- the fi9e co8petiti9e
forces and not achie9e strategic co8petiti9eness7 Must :e capa:le of consistentl-
reducing costs >hile adding differentiated features7
=Internati!nal .!r;!rate >level strategy*
K The ty;e !( .!r;!rate strategy sele.ted Aill have an i#;a.t !n the
sele.ti!n and i#;le#entati!n !( the )"siness>level strategies
So8e strategies pro9ide indi9idual countr- units >ith the flexi:ilit- to
choose their o>n strategies7
Other strategies dictate :usiness(le9el strategies fro8 the ho8e office
and coordinate resource sharing across units7
K ,!."ses !n the s.!;e !( !;erati!ns*
'roduct di9ersification
Geographic di9ersification
K ReC"ired Ahen the (ir# !;erates in*
Multiple industries6 and
Multiple countries or regions
K 'eadC"arters "nit g"ides the strategy
But :usiness or countr-(le9el 8anagers can ha9e su:stantial strategic
input7
M"ltid!#esti. Strategy*
K Strateg- and operating decisions are decentraliDed to strategic :usiness units
%SB.& in each countr-7
K 'roducts and ser9ices are tailored to local 8ar<ets7
K Business units in one countr- are independent of each other7
K !ssu8es 8ar<ets differ :- countr- or regions7
K ,ocus on co8petition in each 8ar<et7
K 'ro8inent strateg- a8ong "uropean fir8s due to :road 9ariet- of cultures
and 8ar<ets in "urope7
Gl!)al Strategy*
K 'roducts are standardiDed across national 8ar<ets7
K Business(le9el strategic decisions are centraliDed in the ho8e office7
K Strategic :usiness units %SB.& are assu8ed to :e interdependent7
K "8phasiDes econo8ies of scale7
K Often lac<s responsi9eness to local 8ar<ets7
K e@uires resource sharing and coordination across :orders %hard to 8anage&7
Transnati!nal Strategy*
K See<s to achie9e :oth glo:al efficienc- and local responsi9eness7
K 2ifficult to achie9e :ecause of si8ultaneous re@uire8ents:
Strong central control and coordination to achie9e efficienc-
2ecentraliDation to achie9e local 8ar<et responsi9eness
K ,ir8 8ust pursue organiDational learning to achie9e co8petiti9e ad9antage7
Bene(its !( Internati!nal Strategy A;;lying in
Bangladesh*
K In.reased Mar@et SiDe
L2o8estic 8ar<et 8a- lac< the siDe to support efficient scale
8anufacturing facilities7
K Ret"rn !n Invest#ent
L1arge in9est8ent pro;ects 8a- re@uire glo:al 8ar<ets to ;ustif- the
capital outla-s
L?ea< patent protection in so8e countries i8plies that fir8s should
expand o9erseas rapidl- in order to pree8pt i8itators7
K E.!n!#ies !( S.ale (!r +earning)
L"xpanding siDe or scope of 8ar<ets helps to achie9e econo8ies
of scale in 8anufacturing as >ell as 8ar<eting6 =2 or distri:ution7
L #an spread costs o9er a larger sales :ase7
L #an increase profit per unit7
K +!.ati!n Advantages
L1o> cost 8ar<ets aid in de9eloping co8petiti9e ad9antage :-
pro9iding access to:
K a> 8aterials
K Transportation
K 1o>er costs for la:or
K Be- custo8ers
K "nerg-

Deter#inants !( Nati!nal Advantage*
K ,a.t!rs !( ;r!d".ti!n
LThe inputs necessar- to co8pete in an- industr-
K 1a:or M 1and M $atural resources
K #apital M Infrastructure
K Basi. (a.t!rs
L $atural and la:or resources
K Advan.ed (a.t!rs
L 2igital co88unication s-ste8s and an educated >or<force
K De#and C!nditi!ns
L #haracteriDed :- the nature and siDe of :u-ersE needs in the ho8e
8ar<et for the industr-Es goods or ser9ices7
K SiDe !( the #ar@et seg#ent .an lead t! s.ale>e((i.ient (a.ilities
K E((i.ien.y .an lead t! d!#inati!n !( the ind"stry in !ther .!"ntries
K S;e.ialiDed de#and #ay .reate !;;!rt"nities )ey!nd nati!nal
)!"ndaries
K Related and S";;!rting Ind"stries
L Supporting ser9ices6 facilities6 suppliers and so on7
K Support in design
K Support in distri:ution
K elated industries as suppliers and :u-ers
K ,ir# StrategyE Str".t"re and Rivalry
L The pattern of strateg-6 structure6 and ri9alr- a8ong fir8s7
K #o88on technical training
K Methodological product and process i8pro9e8ent
K #ooperati9e and co8petiti9e s-ste8s
B"siness P!li.y in Bangladesh*
L To act on co88ercial consideration >ith due regard to the interest of industr-6
co88erce6 depositors6 in9estors and to the pu:lic in general7
LTo pro9ide financial assistance to pro;ects su:;ect to their econo8ic and
co88ercial 9ia:ilit-7
LTo arrange e@uit- support and loans for pro;ects singl- or through consortiu8 of
financial institutions including :an<s7
LTo encourage and de9elop entrepreneurship in the countr-7
LTo di9ersif- in9est8ents7
LTo inspire s8all and 8ediu8 sa9ers for in9est8ent in securities7
LTo create e8plo-8ent opportunities
LTo encourage and :roaden the :ase of In9est8ent in agro and infor8ation =
co88unication technolog- %I#T& sectors7
SFOT Analysis*
! SFOT anal-sis %alternati9el- SFOT #atriG& is a structured planning 8ethod
used to e9aluate the strengths6 Aea<nesses6 !pportunities6 and threats in9ol9ed in a
pro;ect or in a :usiness 9enture7 ! S?OT anal-sis can :e carried out for a product6
place6 industr- or person7 It in9ol9es specif-ing the o:;ecti9e of the :usiness
9enture or pro;ect and identif-ing the internal and external factors that are
fa9ora:le and unfa9ora:le to achie9e that o:;ecti9e7 The techni@ue is credited to
!l:ert 3u8phre-6 >ho led a con9ention at the Stanford esearch Institute %no>
SI International& in the *560s and *5N0s using data fro8 ,ortune 500 co8panies7
O*PO)P
The degree to >hich the internal en9iron8ent of the fir8 8atches >ith the
external en9iron8ent is expressed :- the concept of strategic fit7
Setting the o:;ecti9e should :e done after the S?OT anal-sis has :een perfor8ed7
This >ould allo> achie9a:le goals or o:;ecti9es to :e set for the organiDation7
Strengths: characteristics of the :usiness or pro;ect that gi9e it an
ad9antage o9er others7
Fea@nesses* characteristics that place the :usiness or pro;ect at a
disad9antage relati9e to others
Opportunities: ele8ents that the pro;ect could exploit to its ad9antage
Threats: ele8ents in the en9iron8ent that could cause trou:le for the
:usiness or pro;ect
Identification of S?OTs is i8portant :ecause the- can infor8 later steps in
planning to achie9e the o:;ecti9e7
,irst6 the decision 8a<ers should consider >hether the o:;ecti9e is attaina:le6
gi9en the S?OTs7 If the o:;ecti9e is not attaina:le a different o:;ecti9e 8ust :e
selected and the process repeated7
.sers of S?OT anal-sis need to as< and ans>er @uestions that generate
8eaningful infor8ation for each categor- %strengths6 >ea<nesses6 opportunities6
and threats& to 8a<e the anal-sis useful and find their co8petiti9e ad9antage7
'OF DO ,IRMS GO INTERNATIONA+H I ENTR$ STRATEGIES*
,oreign 8ar<et entr- strategies differ in degree of ris< the- present6 the control and
co88it8ent of resources the- re@uire and the return on in9est8ent the- pro8ise7
There are t>o 8a;or t-pes of entr- 8odes:
*& non(e@uit- 8ode6 >hich includes export and contractual agree8ents6
)& e@uit- 8ode6 >hich includes ;oint 9enture and >holl- o>ned su:sidiaries7
The 8ar<et(entr- techni@ue that offers the lo>est le9el of ris< and the least 8ar<et
control is export and i8port7 The highest ris<6 :ut also the highest 8ar<et control
and expected return on in9est8ent are connected >ith direct in9est8ents that can
:e 8ade as an ac@uisition %so8eti8es called Bro>nfield& and Greenfield
in9est8ents7
EG;!rting and i#;!rting*
The first and the 8ost co88on strateg- to :e an international co8pan- is: i8port
and export of goods6 8aterials and ser9ices7 "xporting is the process of selling
goods or ser9ices produced in one countr- to other countries7
There are t>o t-pes of exporting: direct and indirect7 Indirect export 8eans that
products are carried a:road :- other agents and the fir8 doesnEt ha9e special
acti9it- connected >ith international 8ar<et6 :ecause the sale a:road is treated li<e
the do8estic one7 ,or these reasons it is difficult to sa- that it is an
internationaliDation strateg-7 In the case of direct exporting6 the fir8 :eco8es
directl- in9ol9ed in 8ar<eting its products in foreign 8ar<ets7
+i.ensing
1icensing is another >a- to enter a foreign 8ar<et >ith a li8ited degree of ris<7
The international licensing fir8 gi9es the licensee patent rights6 trade8ar< rights6
cop-rights or <no>(ho> on products and processes7 In return6 the licensee >ill:
produce the licensorEs products6 8ar<et these products in his assigned territor- and
pa- the licensor fees and ro-alties usuall- related to the sales 9olu8e of the
products7 This t-pe of agree8ent is generall- >elco8ed :- foreign pu:lic
authorities :ecause it :rings technolog- into the countr-7
,ran.hising
,ranchising is si8ilar to licensing except that the franchising organiDation tends to
:e 8ore directl- in9ol9ed in the de9elop8ent and control of the 8ar<eting
progra8 7The franchising s-ste8 can :e defined as a s-ste8 in >hich se8i(
independent :usiness o>ners %franchisees& pa- fees and ro-alties to a parent
co8pan- %franchiser& in return for the right to :eco8e identified >ith its
trade8ar<6 to sell its products or ser9ices6 and often to use its :usiness for8at and
s-ste87 #o8pared to licensing6 franchising agree8ents tends to :e longer and the
franchisor offers a :roader pac<age of rights and resources >hich usuall- includes:
e@uip8ents6 8anagerial s-ste8s6 operation 8anual6 initial trainings6 site appro9al
and all the support necessar- for the franchisee to run its :usiness in the sa8e >a-
it is done :- the franchisor7 In addition to that6 >hile a licensing agree8ent
in9ol9es things such as intellectual propert-6 trade secrets and others in franchising
it is li8ited to trade8ar<s and operating <no>(ho> of the :usiness7
&!int Jent"res
,oreign ;oint 9entures ha9e 8uch in co88on >ith licensing7 The 8a;or difference
is that in ;oint 9entures6 the international fir8 has an e@uit- position and a
8anage8ent 9oice in the foreign fir87 ! partnership :et>een host( and ho8e(
countr- fir8s is for8ed6 usuall- resulting in the creation of a third fir8 7
This t-pe of agree8ent gi9es the international fir8 :etter control o9er operations
and also access to local 8ar<et <no>ledge7 The international fir8 has access to the
net>or< of relationships of the franchisee and is less exposed to the ris<
expropriation than<s to the partnership >ith the local fir87 This t-pe of agree8ent
is 9er- popular in international 8anage8ent7 Its popularit- ste8s fro8 the fact that
it per8its the a9oidance of control pro:le8s of the other t-pes of foreign 8ar<et
entr- strategies7 In addition6 the presence of the local fir8 facilitates the integration
of the international fir8 in a foreign
"n9iron8ent7
Ris@s in Bangladesh Envir!n#ent*
K P!liti.al Ris@s
Insta:ilit- in national go9ern8ents
?ar6 :oth ci9il and international
'otential nationaliDation of a fir8Es resources
K E.!n!#i. Ris@s
2ifferences and fluctuations in the 9alue of different currencies
2ifferences in pre9ailing >age rates
2ifficulties in enforcing propert- rights
.ne8plo-8ent
K Te.hn!l!gi.al Ris@*
1ac< of securit- in electronic transactions
The cost of de9eloping ne> technolog-6 and technolog- 8a- fail
?hen all of these are coupled >ith the outdated existing technolog-6
the result 8a- create a dangerous effect in doing :usiness in the
international arena7
K O;erati!nal Ris@
K Strategi. Ris@
K Envir!n#ental Ris@
K ,inan.ial Ris@
K Terr!ris# Ris@
SUMMAR$*
In the international co8petiti9e en9iron8ent6 the a:ilit- to de9elop a transnational
organiDational capa:ilit- is the <e- factor that can help the fir8 adapt to the
changes in the d-na8ic en9iron8ent7 !s the fast rate of glo:aliDation renders the
traditional >a-s of doing :usiness irrele9ant6 it is 9ital for 8anagers to ha9e a
glo:al 8indset to :e effecti9e7 Glo:aliDation of :usiness has led to the e8ergence
of glo:al strategic 8anage8ent7 ! co8:ination of strategic 8anage8ent and
international :usiness >ill result in strategies for glo:al cooperation7 3o>e9er6
there are o:stacles to progress along the >a-7
The pro:le8s caused :- these o:stacles can :e sol9ed :- cooperati9e 9entures
:ased on 8utual ad9antages of the parties in9ol9ed7 'roper effecti9e
co88unication >ill :e a <e- ele8ent for glo:al strategies :ecause >hat is proper
and effecti9e in one culture 8a- :e ineffecti9e and i8proper in
another7 Mar<eting products glo:all- is co8plex and difficult :ecause of se9eral
factors including: International Strategic !lliances6 coordination and control of
international 8ar<eting6 co88unication6 regional trade :loc<s6 and choice of
glo:al strateg-7 The fir8 >ith the choice of an effecti9e glo:al that ta<es into
consideration its strengths and >ea<nesses in the face of the opportunities and
threats in the en9iron8ent6 >ill sur9i9e
,indings *
This stud- found that high :usiness relatedness :et>een a su:sidiar- and parent
fir8 are positi9el- associated >ith a :road 8ar<et scope and differentiation
strateg-7 Secondl-6 international experience is positi9el- associated >ith a
differentiation strateg-7 The stud- also found that percei9ed co8petition is
positi9el- associated >ith a :road 8ar<et scope and percei9ed lo> co8petition
influences a narro> productC8ar<et scope7 ,inall-6 percei9ed :arriers positi9el-
i8pact a differentiation strateg-7