chapter 7: STRATEGiES FOR iNTERNATiONAL MARKET

bismillah.....allahumma yassir wala tu'assir :)

Assalamualaikum wbt.

first of all, we have to know the reasons why companies decide to enter the foreign markets. some of the reasons are:

1. to gain access to new customers.
2. to further exploit core competencies.
3. to spread business risk across a wider market base.
4. to achieve lower costs through economies of scale, experience and increased purchasing power.
5. to gain access to resources and capabilities located in foreign markets.

POLITICAL RISKS stem from instability or weaknesses in national governments and hostility to foreign business. ECONOMIC RISKS stem from the stability of a country's monetary system, economic and regulatory policies, the lack of property rights protections.

EFFECT OF EXCHANGE RATE SHIFTS:

- exporters experience a rising demand for their goods whenever their currency grows weaker relative to the importing country's currency.

exporters experience a falling demand for their goods whenever their currency grows stronger relative to the importing country's currency.

COLLABORATIVE STRATEGIES involving alliances or joint ventures with foreign partners are a popular way for companies to edge their way into the markets of foreign countries.

CROSS-BORDER ALLIANCE enable a growth-minded company to widen its geographic coverage and strengthen its competitiveness in foreign markets: at the same time, they offer flexibility and allow the company to retain some degree of autonomy and operating control.

strategic approaches in competing internationally:

1) MULTIDOMESTIC STRATEGY: is one in which a firm varies its product offering and competitive approach from country to country in an effort to be responsive to differing buyer and preferences and market conditions.it is a think-local, act-local type of international strategy, facilitated by decision making decentralized to the local level.

2) GLOBAL STRATEGY: is one in which a company employs the same basic competitive approach in all countries where its operates, sells much the same products everywhere, strives to build global brands and coordinates its actions worldwide with strong headquarters control. it represents a think-global, act-global approach.

3) INTERNATIONAL STRATEGY: is a strategy for competing in two or more countries simultaneously.

4) TRANSNATIONAL STRATEGY: is a think-global, act-local approach that incorporates elements of both multidomestic and global strategies.

PROFIT SANCTUARIES are country markets that provide a firm with substantial profits because of a strong or protected market position. CROSS-MARKET SUBSIDIZATION supporting competitive offensives in one market with resources and profit diverted from operations in another market- can be a powerful competitive weapon.

always pray that all Muslim in all around the world is being protected from any harm. day-to-day, the new about flash flood appear in newspaper. so,it is our responsibility to pray for the safety our relatives. i hope my family will be fine and strong to face the test from Him. ameenn.

when we face the problem, we always thought that we are the only one who has the biggest problem. you are wrong.keep calm and look people around you..you will noticed that everyone has their problems and what make it difference is you are the chosen one to handle the problem which prove that you are strong enough to face it. congratulations and say ALHAMDULILLAH :) 

OSHIMA RESTAURANT

alhamdulillah..thanks to Allah for giving me the chance to breath and live until this day.
for this entry, i would like to write about the OSHIMA RESTAURANT.  the founder of OSHIMA RESTAURANT, Puan Asnidar Hanim Yusuf, came to our lecture to give her talk and share about her restaurant. i'm proud of her as she be the one of  successful Muslim Enterpreneur :)

the word of 'OSHIMA' is taken from the name of a big island in Japan. this restaurant was set up on 2009 which this restaurant provides HALAL JAPANESE FOOD. being positive and never give up make her keep sustain in the business field. i want to share here what i got from the sharing moment last day. the strategies that applied by the owner of the restaurant are very impressed me like; as a entrepreneur we should  have our own niche but in understand needs, have a good location of the business, increase brand awareness, full use of social media and website, retain current customer and increase the new one and last but not least is promotion.she also highlighted that the most important in business is our customer satisfaction. The phrase "customer always right" is not totally accepted in her business. she said that customer also has to respect towards the product or service provider. As Muslim, she remind us to do the business as the part of ibadah and not only focusing on profit. 

the success that achieved by the founder of Oshima Restaurant give me inspiration to have my own business and to bring along the name as Muslim entrepreneur all around the world.

FAILURE MAKE YOU A BETTER PERSON :D 

never give up and keep fighting in what we dream about.don't let the failure bring down our dream along but take it as stairs where we have to climb it first to arrive what we want to be there. 

DO NOT ASK FOR MONEY. IKHLAS FOR ALLAH AND MONEY WILL COME.

chapter 6: strengthening a company's competitive position: STRATEGIC MOVES, TIMING AND SCOPE OF OPERATIONS.

       

bismillahirrahmanirrahim...SALAM ALAYK!
let's us move on to the next chapter :)

OFFENSIVE

STRATEGIC OFFENSIVE PRINCIPLES

• focus on relentlessly building competitive advantage and then converting it into sustainable advantage.
• apply resources where rivals are least able to defend themselves.
• employ the element of surprise as opposed to doing what rivals expect and are prepared for.
• display the strong bias for swift, decisive and overwhelming actions to overpower rivals.

the best company's strategic option is to SEIZE THE ATTACK, GO ON ATTACK and LAUNCH A STRATEGIC OFFENSIVE to improve its market position.

basis for COMPETITIVE ATTACK:

- avoid directly challenging a targeted competitor where it is strongest.

- use the firm's strongest strategic assets to attack a competitor's weaknesses.

- the offensive may not yield immediate results if market rivals are strong competitors.

- be prepared for the threatened competitor's counter-response.

the best offensives use a company's most powerful resources and capabilities to ATTACK RIVALS in the areas where they are weakest.

best targets for OFFENSIVE ATTACK

• market leaders that are in vulnerable competitive positions.
• runner-up firms with weaknesses in areas where the challenger is strong.
• struggling enterprises on the verge or going under.
• small local and regional firms with limited capabilities.

BLUE OCEAN STRATEGY (OFFENSIVE)

                                          

A BLUE OCEAN market space, where the industry has not yet taken shape, with no rivals and wide-open long-term growth and profit potential for a firm that can create demand for new types of products.

It offers growth in revenue and profits by discovering or inventing new industry segments that create altogether new demand.

 example: im4u, starbucks, ebay, FedEx,etc.

DEFENSIVE

Purposes of Defensive Strategies:

- lower the firm's risk of being attacked.

- weaken the impact of an attack that does occur.

- influence challengers to aim their efforts at the other rivals.

Blocking the avenues open to challengers:

• adopt alternative technologies as a hedge against rivals attacking with a new or better technology.
• introduce new features and models
• maintain economy-pricing
• discourage buyers from trying competitor's brands.
• make early announcement about new products price changes to induce buyers to postpone switching.
• challenge quality and safety of competitor's products.
• grant discounts or better terms to intermediaries.

*TIMING'S IMPORTANCE TO MAKE OFFENSIVE AND DEFENSIVE STRATEGIC

- knowing when to make a strategic move is as crucial as knowing what move to make.

- moving first is not guarantee of success or competitive advantage.

- the risks of moving first to stake out a monopoly position must be carefully weighed.

HORIZONTAL and VERTICAL

Horizontal scope is the range of product and service segments that a firm serves within its focal market. Meanwhile, vertical scope is the extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system.

HORIZONTAL

1) MERGER: is the combining of two or more firms into a single corporate entity that often takes on a new name.

2) ACQUISITION: is a combination in which one firm, the acquirer purchases and absorbs the operations of another firm, the acquired.

VERTICAL

a vertically integrated firm is one of that performs value chain activities along more than one stage of an industry's value chain system.

1) VERTICALLY INTEGRATED FIRM: is one of that participates in multiple segments or stages of an industry's overall value chain.

2) VERTICAL INTEGRATION STRATEGY: can expand the firm's range of activities backward into its sources of supply and/or forward toward ed users its products.

TYPES OF VERTICAL INTEGRATION STRATEGIES

1)Full Integration: a firm participates in all stages of the vertical activity chain.

2) Partial Integration: a firm builds positions only in selected stages of the vertical chain.

3) Tapered Integration: involves a  mix of n-house and outsourced activity in any stage of vertical chain.

ADVANTAGES

1) add materially to a firm's technological capabilities.

2) strengthen the firm's competitive position.

3) boost the firm's profitability.

FORWARD and BACKWARD 
BACKWARD INTEGRATION involves entry into activities previously performed by suppliers or other enterprises positioned along earlier stages of the industry value chain system.
FORWARD INTEGRATION involves entry into value chain system activities closer to the end user.



OUTSOURCING involves contracting out certain value chain activities to outside vendors.

STRATEGIC ALLIANCES is a formal agreement between two or more separate companies in which they agree to work cooperatively toward some common objective.
JOINT VENTURE is a partnership involving the establishment of an independent corporate entity that the  partners own and control jointly, sharing in its revenues and expenses.




Don't despair and never lose hope,cause Allah always by our side.
nothing is easy in life. remind in mind that success will be very meaningful if we have to go through all the obstacles which  not everyone can face it..Allah will not burden us out of our capabilities. ALHAMDULILLAH :D