PROGRAM : (MBA) – CORPORATE MANAGEMENT

SUBJECT : INTERNATIONAL BUSINESS MANAGEMENT

SUBJECT CODE : BUS 5112
YEAR OF STUDY : 2018/2019
NATURE OF WORK : GROUP TEST
NAME OF INSTRUCTOR : Dr. MUSHUMBUSI PAULO KATO
SESSION : 1600HRS

NAMES OF PARTICIPANTS

NAME REGISTRATION NUMBERS

1. FREEDOM W. WIMMO : 221050173/T.17

2. KOBELO, GEOFREY NYAMWINO
3. MTABULA FERDINAND
4. JOEL WILSON
5. KENAN ABDUEL
6. AGRIPINA S MSUMARI
7. STELLA W NYASULU
8. VENANCE, J PETER
9. CASTRO M. EDWARD
: 2210503249/T.18
: 221050251/T.18
: 221050263/T.18
: 221050260/T.18
: 221050282/T.18
: 221050307/T.18
: 221050272/T.18
: 221050298/T.18
1. Discuss how international marketing relates to international strategy

International marketing is concerned with the process of identifying and satisfying consumer needs
abroad better than the national and international competitors under the constraints of the
internationalization stage of the firm and global environment.

International strategy is a business plan or strategy created by a company to do its business in

international markets. An international strategy requires analyzing the international market,
studying resources, defining goal, understanding market dynamics and develop offering.
international strategy for a company looking to grow is a continuous process.

The two concepts relate in the sense that, International strategy is concerned with plans/strategies
of doing business in international markets, while international marketing is concerned with
identifying and satisfying customers’ needs in those markets. Both of them use somehow similar
methods in embarking to international markets. In order for the firm to embark in international
markets it must use either of the following international strategies,

 Global strategy
Where under global strategy the firm considers the world as single market place therefore
creates standardized good and services to satisfy the needs of customers worldwide.
 Home replication
Under home replication strategy the firm uses the core competency or firm specific
advantage created at home as its main competitive weapon in the foreign markets.
 Multidomestic strategy or international strategy
Whereas under the multidomestic strategy the firm views itself as collection of relatively
independent operating subsidiaries’ each of which focuses on a specific domestic market.

While the Firm when considering, whether to standardize or customize their market mix it must
adopt the following approaches

 Ethnocentric approach
Where under this approach the firm simply markets its goods internationally the same way
it does domestically.
 Polycentric approach

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 Under the polycentric approach the firm customizes the marketing mix to meet the specific
needs of each foreign market it serves.
 Geocentric approach
While under the geocentric approach the firm analyzes the needs of customers worldwide
and then adopts a standardized market mix for all markets it serves.

Considering the methods that can be used under the international marketing and International
strategy, it can be seen that both uses similar approaches in reaching/operating in international
markets. If a firm uses the Global strategy under the International strategy, it will be similar with
a geocentric approach under the International marketing. And if Firm uses the Multi domestic
strategy under the International strategy it will be similar with the polycentric approach under the
international marketing. The Home replication strategy under the international approach will be
similar to ethnocentric approach under the international marketing.

2. Describe and discuss the three sources of competitive advantage available to international
business that are not available to purely domestic firms. Why is it difficult for firms to
exploit these three competitive advantages simultaneously?

Competitive advantage means a strategic advantage one business entity has over its rival entities
in the industry. Achieving competitive advantage strengthens and positions a business better
within the business environment.

2A). The three sources of competitive advantages that are available to firms operating in
International business, but not available to firms operating purely domestically are the
following-;

1. Global efficiencies

This main focus on achieving cost economies and revenue maximization through global
integration and response to customer needs in different markets. Companies achieve global
efficiency through economies of scale, economies of scope and location efficiency. In location
efficiency the multinational organization usually locate their facilities anywhere in the world that
yield them to lowest production or distribution cost with the aim of improving quality of services
they offer to their customers.

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Economies of scale, the organization build factories to serve more than one country; the
international firms may also lower their production costs by capturing economies of scale. e.g.
Mercedes-Benz has achieved economies of scale by focusing production of its M-CLASS at its
assembly plant in Vance, Alabama.

Economies of scope, in this aspect firms or companies broadened their product line in each country
they enter. this helps, international firms to enjoy economies of scope, lowering their production
and marketing costs and enhancing their bottom lines.

2. Multinational flexibility

This is refers to the ability of an organization to address or accommodate the challenges and
opportunities which surface or it encounter as a result of the dynamic nature of the macro and
micro environments factors in international business. In the context of multinational flexibility,
companies need to address four primarily risks which are macro -economic risks, political risks,
competitive risks and resource risks.

Macroeconomic risks refer to risks such as exchange rates fluctuations, inflation rates, interest
rates. Political risks include issues like relationship between Governments, threat of sanctions,
competitive threats relate to risk in the micro environment which primarily look at the competitor
strategies. Resource risks relates to risks of availability and access to critical resources like law
material, labor, capital and technology. These are the core resources for running a particular firm
or company.

3. Worldwide learning

This focus on gaining insight of the different countries on issues relating to key business
environment, key business stake holders, varied technology platforms, ways of doing business.
Generally, it stresses on utilizing the insights for further strengthening of operation in each country.
It is about cross application of business insight for overall benefits of the worldwide network. The
learning can be a key competitive advantage for company, since the company acquires new ideas;
knowledge on how business is operated in other countries. Therefore, a firm may learn from these
differences and transfer this learning to its operation in other countries.

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2B) In the course of business, an international organization faces difficult to exploit all the
three resources simultaneous due to the following reasons;

1. Difference in National Culture

Presence of differences between countries in customer preference, tastes and business methods
exhibit cultural differences. Culture holds assumptions, values, traditions and behavioral norms.
All these issues trigger dynamics on marketing behavior of these countries. Therefore, it is not
easy for a company to penetrate to the international market without facing this, e.g. Wal-Mart in
German and Korea, Disney with EURO Disney land and Mark & Spenser in Europe and North
America. Following to this scenario many European companies enter into contracts with local
firms as a means of expanding their business to a foreign country. This is evident in Asian
countries.

2. Competition

This is also one among the factor that hinders an organization to free excel in the international
market due to stiff competition that happen in the international arena. The presence of competition
fails companies to establish their brands overseas and fail to enjoy the international
competitiveness advantage.

3. Laws and Government regulations

In many cases Governments are the most important source of obstacles to globalization. Legal and
regulatory condition creates procedures and regulations that make companies to fail to excel in
international markets. There several rules and procedures that differ from one country to the other,
for instance in the financial services, pharmaceutical and health services, and telecommunication.
This hampers a smooth penetration to an international market.

4. Distribution channels

Differences between the distribution systems of different countries are among the biggest barrier
to global marketing strategies. Different infrastructure development between countries makes
difficult a company to easily enter international market

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5. Economic factors

Economic performance between countries differ in wider dimension, so the difference in economic
parameters such as GDP, National income, Individual income yield different returns to businesses.
Therefore, it is not easy for a company to operate in different countries with the same profit margin
motives.

6. Technological Factors

Rapid change in technology can be another factor which may hinder a firm from exploiting all the
sources of the competitive advantage available at its disposal. If the firm fails to acquire the level
of technology needed to compete at the international level due to, may be lack of financial
resources it may not effectively exploit all the competitive advantages available.

Conclusion

From the above discussed reasons, it may clearly be seen that it is not possible for the firm to
exploit all the competitive advantages simultaneously; an organization must choose its best
strategy.

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REFERENCES

Aaker, D.A (2001) Developing business strategies, 6th edition, John Wiley &Sons, Inc.

Harrison. A. Dalkiran, E, Elsey. E, (2000) international Business, Oxford University Press.