What exactly is an international business strategy?
Business Strategy: A general term that encompasses not only the means of how a corporation will reach its end goal, but also the methodology of how it will do so. Does this mean to change the brand in accordance to demographics, or does it mean to sell a completely different service or product to various regions worldwide?
McDonald’s, for example, has created different products for different tastes worldwide. In China, chicken is much more preferred over beef, leading franchises located in China to focus on creating chicken-based foods in their product line. In condensed areas like South Korea and Singapore, McDonald’s has introduced delivery services, allowing fast food to be even faster.
Starbucks, on the other hand, has chosen to stay with consistency, offering an almost identical service worldwide, and to avoid changing or modifying the brand it has grown over time. So if you go to any Starbucks worldwide, you are guaranteed the same service as well as the same quality of coffee.
What are the international strategies of each of these two companies? To observe it in a qualitative standpoint, they have merely focused on their core competitiveness and branding. Starbucks is recognized as a top-performing service brand, meaning that people will go to Starbucks with expectations of it having a consistency in quality. McDonald’s, however, focuses on value: making tasty fast food that satisfies their customers.
For such front-end businesses, focusing on their core-competency is key. How about back-end businesses, such as logistics or freighting? These businesses have implemented strategies that emphasize efficiency and cost cutting measures. Since their businesses are much less defendant on marketing and branding, back end industries often focus on cutting costs — which is a vital part of their survival as oftentimes profit margins can be quite low.
How to companies ensure minimum expenses?
Oftentimes, nations outsource operations to places where it is cheaper — the main reason why China is currently the center of manufacturing. iPhones for example are assembled in China, but many parts of often outsourced by companies that have the infrastructure and the sufficient supply chain to do so, such as how the screens and some of the semiconductors of iPhones are made by South Korean companies.
Then there are companies that are more dependent on international trade and thus need diversified business strategies. An example is the shipping industry (which Maersk line is the largest in the industry). This industry is known to be volatile and sensitive to international demand, meaning that it needs to be ready when shipments are low and that it is able to complete orders on time. As this industry is more dependent on global economic performance, survival is key: particularly in a time where some of the largest shipping companies are failing to meet payments, as Hanjin’s imminent entrance into court receivership.
It is hard to subjugate operations and strategies into either just a business strategy or international strategy. In fact, there may not be a large gap between the two as borders continue to disappear among trade agreements and increasing economic interdependence among regions worldwide. Businesses focus on creating content fitted for their domestic consumers, just the same as they do for international ones. If they are located in a large country like the U.S., there will also be regional offices to oversee local operations.
The biggest difference between domestic business supply chains and international ones may be the handling back-industry operations, such as logistics, sourcing, and distribution. As domestic distributors and logistics may not have the capacity to facilitate international trade, larger companies need to invest a lot on how their product will be introduced abroad, hence “international market entry.”
Tridge also aims to help close the line between “business strategy” and “international business strategy” by closing the gaps between buyers and manufacturers. Tridge Trade allows those with connections to buyers to facilitate trade by introducing them to Tridge, where Tridge will work in closing trades. Whoever introduces us to buyers will be compensates with up to 25% of the total profits of our trade. Sign up at trade.tridge.com to partake in connecting the world through trade.
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