Presentation on IB Strategies 2

7/28/2019 Presentation on IB Strategies 2

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Presentation on IB Strategies

By khushpreet kaur

Roll no. 326th sem


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What is International Business? Meaning

International Business conducts business transactions all over the world.These transactions include the transfer of goods, services, technology,managerial knowledge, and capital to other countries. Internationalbusiness involves exports and imports.

International Business is also known,called or referred as aGlobal Business

or International Marketing.


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An organizations strategy shows what the organization wants to achieveand how it will achieve. It includes:The purpose of the organizationGoals and objectivesPlans and methods to achieve these goals and objectives.

The five HOWS

How to grow?How to please customers?

How to out-compete rivals?How to respond to changing markets?How to achieve objectives?

strategy


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To reduce costs

To specialize in competencies

To avoid or counter competition

To gain knowledgeTo gain location-specific asset

To overcome governmental constraints

To diversify geographically

To minimize exposure in risky environments

REASONS


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Diversification Mergers Take overs

Strategic Alliance Joint Ventures Licensing Franchising

Management contracts Wholly-owned subsidiary (WOS)

TYPES OS STRATEGIES ADOPTED BY INTERNATIONAL

COMPANIES


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It involves a substantial change in the business singly or jointly-

in terms of customer groups or alternative technologies of one or

more of a firms businesses. There are two categories:

Concentric Diversification: when an organization takes up an

activity in such a manner that is related to the existing business

definition of one or more of firms businesses, either in terms ofcustomer groups, customers functions or alternative technologies.

Marketing related concentric diversification

Technology- related concentric diversification

Marketing- technology related concentric diversification

Conglomerate Diversification: when an organization adopts a

strategy which requires taking of those activities which are

unrelated to the existing businesses.

Diversification


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Mergers Strategies

A merger is a combination of two or more organizations in which

one acquires the assets and liabilities of the other in exchange for

shares or cash or both the organization are dissolved and the

assets and liabilities are combined and new stock is issued.

If both the organization dissolves their identity to create a neworganization, it is consolidation.

Horizontal Mergers

Vertical MergersConglomerate Mergers

Concentric Mergers


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Takeover Strategies:

Takeover or acquisition is a popular strategic alternative adopted

by Indian companies. Acquisitions usually are based on the

strong motivation of the buyer firm to acquire. Takeovers are

frequently classified as hostile takeovers and friendly takeovers

A welcome takeover is usually referring to a favorable and friendly

takeover. Friendly takeovers generally go smoothly because both

companies consider it a positive situation or by mutual consent.

A hostile takeover is where it is expected to be opposed, by the

existing management or professionals and it can be

accomplished through a tender offer .


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Joint Venture Strategies

Joint ventures is a case where two or more companies form a

temporary partnership for a specified purpose.

Joint ventures may be useful to gain access to a new business

mainly under these conditions:

When an activity is uneconomical for an organization to do alone.When the risk of business has to be shared.

When the organization has to overcome the hurdles, such as

import quotas, tariffs, nationalisticpolitical interests, and cultural

roadblocks.

When more than two companies are involved it becomes a

consortium


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Strategic alliances

They are partnership between firms whereby their resources,capabilities and core competencies are combined to pursue

mutual interest to develop, manufacture, or distribute goods or

services

For example: A major website could form a strategic alliance with

an analytics company to improve its marketing efforts.


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Licensing

Licensing, in the business world, is a contractualagreement to use a brand name, patent or property

that is owned by another business entity.

For example, a greeting card company can obtain a

license to use images of Hannah Montana or "TheSimpsons" characters on greeting cards.

Licensing involves Patents, Formulas, Designs,Copyrights, Trademarks, Brand names, Franchises,

Methods/programs


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Franchising

Franchising: A specialized form of licensingin which franchisor not only sells anindependent franchisee for the use ofintangible property but assist in areas suchas promotion and training.

A franchise is a business that operates under an

existing brand name. Many popular businesses are

franchises, including McDonald's, Subway


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Management Contract

Management contracts involve not just selling a

method of doing things (as

with franchising or licensing) but involve actually

doing them. A management contract can involve a

wide range of functions, such as technical operationof a production facility, management of personnel,

accounting, marketing services and training.

Management contracts are often formed where

there is a lack of local skills to run a project


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Wholly-Owned Subsidiary (WOS)

A wholly-owned subsidiary is a company

whose stock is entirely owned by another company.

The owner of a wholly-owned subsidiary is known as

the parent company or holding company. Because the

parent company owns all of the stock of the wholly-owned subsidiary, the parent company can control all

of its activities.

This arrangement is common among high-techcompanies who want to retain complete control and

ownership of their technology.


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Expansion through concentration

It involves converging resources in one or more of firmsbusinesses in terms of their respective customer

needs, customer functions, or alternative technologies

either singly or jointly, in such a manner that it results

in expansions .

Concentration can be done through

Market development

Product development


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Presentation on IB Strategies 2

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