International Trade Management

Developing an International Competitive Strategy

SUBMIT TO: PROF. FERNANDO

MONTERO

PRESENTED BY: AKASH PATEL-000332846

TABLE OF CONTENT

What is Goal of Competition?Developing an International Competitive StrategyInternational Competitive StrategyOffensive StrategyDefensive StrategyDiversification StrategyCounter-cyclical StrategyNiche StrategyConclusionReferences

What is Goal of Competition?

Its is a competitive advantage arises from the intersection of what the customer wants with how the company delivers it and its fundamental indicator is profitability.

We can build Competitive advantage by utilizing this basic steps:

1.Determine what customers of that business really need or want.

2.Analyze which part of a company’s operation can be enhanced.

3.On the basis of resources and capabilities, develop a strategy for competitiveness.

DEVELOPING AN INTERNATIONAL COMPETITIVE STRATEGY

Factors to Consider

- The Value chain is an area through which company can identify opportunity to lower costs or to find sources of differentiation.

- These feature or characteristic can be found anywhere in company, if they applied properly then they can achieve efficiency, enhance quality, pursue innovation or improve service.

- Distinctive competencies are based on resources and capabilities. Resources consist of both tangible and intangible assets.

- Capabilities are build on resources.

CONTINUED……- Valuable capabilities are those that create demand among customers (Customers value).

- For an example APPLE Macs, iPod and iPhones an extremely elegant technology.

- Amazon web-based catalogues and purchasing. - Capabilities that are difficult to imitate based on trade secrets such as KFC’s combination of herbs and spices or Coco Cola’s Secret formula.

What do you understand by this Picture…..

INTERNATIONAL COMPETITIVE STRATEGY

COMPETTIVE STRATEY: can be divided into the OFFENSIVE and the DEFENSIVE.

OFFENSIVE STRATEGY: Companies pursuing this strategy directly target competitors from which they want to capture market share.

DEFENSIVE STRATEGY: Companies use this strategy to discourage or turn back an offensive strategy on the part of the competitor

OFFENSIVE STRATEGY:

DIRECT ATTACK: it can slash prices, introduce new features, launch comparison advertisements unfavourable to the competition, or go after parts of the market that the competition has served poorly.

END-RUN: companies can avoid direct competition but still pursue an offensive attach by going into unoccupied markets or countries that have been ignored completely by the rest of the industry.

PRE-EMPTION: sometimes the first company into market gains a position from which later entrants cannot dislodge it. They can secure relationship with supplier and build relationships with best customers.

ACQUISTION: company with deep pockets can eliminate a rival simply by purchasing it. Acquiring a company in foreign market can also bring advantages such as marketplace, geographic coverage, and established relationships.

DEFENSIVE STRATEGIES:

EXCLUSION: By setting up exclusive arrangements with key suppliers in the market. This agreement will block new companies from accessing best suppliers, sources, or partners.

PRICING: A simple strategy is to match any price cuts by the competition with similar discounts, as long as the price war does not get out of hand and ruin both sides.

FEATURES: Adding new features or capabilities can be a positive and appealing way of countering a competitive challenge.

SERVICE: By promoting after sale service you can respond to competitor price cuts or new features.

ADVERTISING: A strong public campaign demonstrating commitment to the market, confidence in the products, or their willingness to meet the competitors challenge.

COUNTER-PARRY: Companies respond to an attack in their own market from a foreign competitor by moving into the competitors home market. For an example: Fujitsu entered the American market, Kodak responded by marketing in Japan. 2) Goodyear responded to Michelin in North America by marketing in Europe.

STRATEGIC OPTIONS FOR GROWTH:DIVERSIFICATION STRATEGY: As company grows in international market, company may decide to pursue a strategy of related diversification.For an Example: A company succeeded in marketing house hold cleaning products in market they may diversify by developing product lines in other household consumer goods.

- A different diversification strategy is to acquire unrelated companies in any industry, as long as they are fundamentally sound and display strong growth potential.

COUNTER-CYCLICAL STRATEGY: Multinational corporations can pursue a counter-cyclical strategy they can acquire positions in separate industries that are affected by different or even contradictory long-term trends.For an Example: A petroleum producer may also invest in alternative sources of energy as a hedge against the time when supplies of crude oil start to dwindle.

Continued…

NICHE STRATEGY:

In effect to put the company in a position where it does not have to compete with other. This is idea behind the niche strategy, where it firm identifies needs that are not being well addressed by existing products or services and tries to satisfy those needs, often using new technologies or combinations of technology.However companies pursuing niche strategies cannot assume that the niche they identify is really viable market.

FIVE GENERIC COMPETITIVE STRATEGY:

•Low cost Provider Strategies.•Broad Differentiation Strategies.•Focused low Cost Provider Strategies.•Focused Differentiation Strategies.•Best-Cost provider strategies.•https://www.youtube.com/watch?v=V14kuqYEsxE

CONCLUSION:

• Classifying competitive strategies we can define value disciplines to marketing strategy and deliver superior value to customer. Each value add an pillar to build lasting customer relationship.

• It will help our firms to analyze competitors and design effective Competitive Strategies to gain Competitive advantage.

WHAT YOU GUYS THINK ABOUT THIS…???

References:

http://www.fao.org/docrep/w5973e/w5973e0a.htm http://

businesscasestudies.co.uk/business-theory/strategy/developing-a-global-strategy.html#axzz33ztsRBAK

http://www.quickmba.com/strategy/global/ http://highered.mcgraw-hill.com/sites/0073530425/student_view0/chapter7/ http://ijbssnet.com/journals/Vol._2_No._13_Special_Issue_July_2011/1.pdf

THANK YOU

ANY QUESTIONS??