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International Business Strategy

International Strategic Planning in 2013

Article #2

By: Dr Samuel Aluri Obua

Executive Director
Institute of Corporate Directors Research Center
Pretoria South Africa
www.icdrctrainingcenter.com

Abstract
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In the past years one could separate the distinction between markets, now it is even more
complicated with globalisation which and created movement to a single global market. There is
therefore convergence of consumer norms. Conglomerate companies start their strategy by simply
exporting and later move on to investing in foreign markets and this is a very common market
entry strategy. This article will explore this strategies and shortcomings.
International Market Strategic Planning Entry
Planning strategy that is effective is that which result into a holistic strategic decision making. It is
a formulation and utilisation of specific characteristic that set set business apart and offers the
enterprise with an advantage over the competition. It, therefore, provides: a framework for action
that embodies organization and employees, a framework for managers and others in the
organization to assess the strategic situation, discuss alternatives in everyday language, and decide
on actions, based on shared values.

International Strategic Planning: What It Is and What It Is Not?


International Strategic planning approach is that which formulates an effective global entry
strategy, it external and internal market environment and on the basis of this a company sets both
long and short term objectives according to (www.thegeminigeek.com/what-is-global-strategicplanning) internationalisation means investing away from the mother country into foreign
countries which requires entry strategy.
Nail Ritson (2013), alludes that companies are groomed from a local markets to a global markets
e.g. the oil industry than others like constructions, transport, and services like insurance.
Internationalisation brings risks - currency fluctuations, political changes, etc. so organisations
may be slow to develop fully global presence.

Methods of international Strategy development: Strategic plans mean looking at the companys
mission, vision, financial plans, human resource, and marketing and, above all, financial plans that
fulfil future obligations.
The seven-stage process of Strategic Planning Process
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Collecting and analysing information


External Assessment
Market Assessment
Internal Assessment
Critical Strategic Issues Identification and obstacles
Statement of strategic vision
Statement of Mission
Statements of goals
Goal methodology
Annual or Year Plan
The purpose of this process is to find new avenues for product markets and increasing revenues,
with the hopes of higher profits. These steps are typically the same in international strategic
planning although the individual activities may be somewhat different according to
(http://www.wisegeek.net/what-is-international-strategic-planning.htm).International strategic
planning calls for controls and evaluations similar to other business operation. Unprofitable
foreign operations can create an immense drag on a companys profits. Low returns on substantial
direct investment can also scare off investors. Strategic planning process can help dissuade
investor fear and show that the company has a proper and cost-effective strategy for business
expansion (http://www.wisegeek.net/what-is-international-strategic-planning.htm)
Reasons for International Strategic Business Planning
Global strategy helps a conglomerate to evaluate internal as well as external environment that in a
long run allows a company to formulate short or long term plans, and then structure
implementation of the plan to attain goals. The wind of globalization and regionalization have
reshaped the world economic landscape over the past quarter century according to (www.imf.org).
While global trade have been growing at a much faster rate than global output as asserted by
(www.imf.org), trade within regional; blocks of economies continue to play a pivotal prominent
function in global business. Linkages between regional blocks have also become much stronger
with the proliferation of regional trade agreements (www.imf.org)

James Cahn (2011) asserted in his lecture on international marketing strategy that, planning is of
great use in international strategic planning. When planning for global strategy a company should
be present in the foreign country where the company wants to enter. And, then develop
marketable corporate profile detailing correctly who the company represents; its core ideology and

what is on offer; this should be in a language understood clearly by the host country. A business
should speak a language known and understood by people.
(http://www.youtube.com/watch?v=zDQ_tI_TZrA). Regional blocs like in Europe, Africa, Latin
America and Asia has expedited the move to globalisation because regionally countries are
removing barriers to trades and agreeing more on trade tariff making it easy for global
conglomerate to expend.
Challenges of International Strategic Planning
Hofstede eludes that cultural values exist with everyone depending on the environment they find
themselves. Precisely not everyone fits in culturally, Trends and tendencies can be singled out.
These is not therefore defective or used to create negative stereotypes but recognized as different
patterns of values and thought. In a multi-cultural world, it is necessary to cooperate to achieve
practical goals without requiring everyone to think, act, and believe identically
(http://www.amanda.com/cms/uploads/media/AMA_CulturalDimensionsG
lobalWebDesign.pdf)
Keith Cuthbertson and Dirk Nitzsche ( 2004) asserts that the other factors that might affect foreign
or global strategic planning businesses is regulation risk that is the primary factor that gives rise to
market failure e.g. natural monopoly, cartels and information problems. Barriers affecting
international businesses are the following;
Cultural challenges: cultures are about peoples behaviours, attitudes, and their preference
choice.
Language challenges: communication becomes one of the major obstacles, the
multinational company should consider which language to use while in foreign market
Human resource challenges: Government regulation of employment is a key to success or
failures to the foreign firm survivals.

Dealing with the Challenges of International Strategic Planning


Implementation is not the end of the road; after implementing the plan of action of the company,
there is a need for control by the enterprise. Controlling is an effort under which organizations
compare the expected performance of up to date behaviours of the strategy and check for any

deviations. If there are any deviations, the organizations take corrective actions to control the plan.
In this way, International Strategic Planning helps the multinational organizations to achieve their
goals in the global business environment (http://www.thegeminigeek.com/what-is-globalstrategic-planning/)
Conclusion
Global strategic decisions making tools reveals the right course of action for leaders and their
organisation intend to pursue .Business global leaders who are committed to realising their global
potentials have a challenging job and yet a pleasant one. Despite many challenges that can be
faced by multinational companies in developing their strategic plans, there are many options
pricing available to choose from. International strategic plans open the ways for a company to
understand both external and internal environment; as well as foreign laws and culture and people
perceptions and as a result a company fully aligns itself with the needs of the market thereto.
Bibliography
Keith Cuthbertson and Dirk Nitzsche (2004) Financial engineering: Derivatives and risk
management: John Wiley and Sons Ltd
James Cahn (2011): International Marketing Strategies: Export University.
http://www.youtube.com/watch?v=zDQ_tI_TZrA
Nail Ritson (2013) Managing Change: The theory of constraints in the mental health service.
Strategic Change
http://www.amanda.com/cms/uploads/media/AMA_CulturalDimensionsG
lobalWebDesign.pdf)
http://www.amanda.com/cms/uploads/media/AMA_CulturalDimensionsG
lobalWebDesign.pdf
http://www.thegeminigeek.com/what-is-global-strategic-planning
http://www.wisegeek.net/what-is-international-strategic-planning.htm