CHAPTER 7: STRATEGIES FOR COMPETING IN INTERNAL MARKETS

“ENJIT-ENJIT SEMUT, SIAPA SAKIT NAIK ATAS...”


are you still remember this song??Yes!! This jingle is easily memorized because we often singing at primary school right? But how many of us know the meaning of this phrase. Each challenge is a bitter pill to swallow. Each disaster is great to be borne “Heavy eyes looking more heavier shoulder”. To nourish the plants in the garden do not the fertilizer with sugar water but stinky shit is the best fertilizer for blooming plants refresh. Man who will "winner" are those who brave soul. Excellent man is not the one who burned suffering in life, but the brilliance belongs to those who successfully bucked everything with patience and perseverance.

The above sentence is enough to explain that in order to compete the international market is complicated. It’s because the market is large and the competition is fierce. A person should be willing to sacrifice and also create a good strategic plan to control so that it runs smoothly. That’s why before enter to the foreign market several factors need to be identified which is :

•  To gain access to new customers.

•  To spread business risk across a wider market base.

• To gain access to resources and capabilities located in foreign markets.

• To exploit its core competencies.

• To achieve lower costs through economies of scale, experience, and increases purchasing power.

Figure shown the diamond of national competitive advantage 

A strong industries are made up of strong firms, the strategies of firms that expand internationally are usually grounded in one or more of these factors. The four major factors are summarized in a framework developed by michael porter.

One a company decides to expand beyond its domestic borders, it must consider the question of how to enter foreign market.There are six primary strategic options for doing so :

• Export strategies.

•  Licensing strategies.

• Franchising strategies.

•  Foreign subsidiary strategies.

• Alliance and joint venture strategies.

• The risk of strategic alliances with foreign partners.

While competing internationally there are three main strategic approaches was applied:

§  Multidomestic strategy : company varies its product offering and competitive approach from country to country in and effort to be respobility to differing buyer preferences and market conditions.
§  Global strategy : company employs the same basic competitive approach in all countries where it operates, sells much the same products everywhere, strives to build global brand, and coordinates its actions worldwide with strong headquarters control. It represents a think-global, act-global approach.
§  Transnational strategy-Think global,Act global : incorporates elements of both multidomestic and global strategies.