As a relatively strong domestic personal computer company, you are considering e

Question

As a relatively strong domestic personal computer company, you are considering expanding your current operations to other countries outside the United States. You are well aware that multinational companies function, behave, and develop and implement strategies differently than companies that only operate domestically.

3(a): Under what conditions would a different strategy across national borders be effective and lead to a sustainable competitive advantage? Describe and take into consideration political and economic risks as well as cross-country differences in demographic, cultural, and market conditions and the risks associated with adverse exchange rate shifts.

3(b): As the Chief Executive Officer of your strong domestic personal computer company, you have identified three target national markets outside of the United States for potential expansion: Russia, Canada, and the combined 19 national markets that comprise the Eurozone (only those European Union member nations that use the Euro as their sole primary currency). Which one of the five general strategy options from Chapter 7 (page 138) would you use to gain market share in any one of the three target national markets outside of the United States? Provide sufficient detail to justify your choice of strategy.

Explanation / Answer

The conditions under which a different strategy across national borders is effective and lead to a sustainable competitive advantage include taking into consideration the cultural, geographic, and political differences, governmental regulations, multiple currencies, and several languages in the global market. The data should be collected for economic, financial, political, legal, and social information on various countries and their markets for different products or services based on which the company could decide economically feasible opportunities for global expansion. Knowing tax, trade, and other related policies is essential for a successful international business. Managers must also account for cultural differences in labor relations such as worker motivation, compensation, hours; etc
the appropriate strategic option to expand its operations in Russia is through acquisition due to highly competitive market, entry barriers, and lack of room for a new entrant. This method provides advantages of already existing distribution channels and customer bases, a prompt entry to a foreign market.

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