INTERNATIONAL BUSINESS 1
Discussion: International Business
Alliesha LeGarde
School of Business, Liberty University
Author Note
Alliesha LeGarde
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Alliesha LeGarde
Email: allegarde@librty.edu
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Abstract
In today’s climate, companies are constantly wanting to have their products reach as many
consumers as possible. If you have found your target market and sales are steadily increasing
when or if you decide should you engage in international business? This paper will briefly
discuss companies who chose to successfully compete globally and why should a company
engage in international business.
Keywords: international business, global market, global strategy
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Discussion: International Business
In today's current global environment, why should a company engage in international
business? The amount of focus currently being placed on globalization is due to events and
innovations in recent years that have served to accelerate the progress and awareness of
globalization. For instance, technology has increased our ability to interact as a global society in
many aspects of our lives and has specifically facilitated the accomplishment of business across
geographic boundaries (Milhauser & Rahschulte, 2010). Additionally, economic markets and
national governments have fueled the interconnectivity of the world thus creating the means for
greater levels of globalization.
Chatterjee, J. (2017) identified two different capabilities that are critical for success in the
global IT services industry: business‐domain capability and technological capability. The focal
firm made deliberate investments in general human capital with the strategic intent of developing
these capabilities and competing successfully with established foreign rivals. These investments
bore fruit. The results suggest that firms can develop these capabilities through formal methods,
such as specialized training and evaluation, or informal methods, such as experiential learning.
The firm realized positive returns to its general human capital investments, at least in the short
run. The firm has been and continues to be highly profitable. In knowledge‐based industries such
as IT services, capability upgrade through continuous learning is the only way to maintain
competitive parity, due to the rapid change in technologies and customers' business requirements.
Hewett & Bearden (2001) the authors explore how a global firm's ability to foster
successful relationships between its foreign subsidiaries' and headquarters' marketing operations
can enhance the performance of products across markets. The results show that cooperative
behaviors are positively associated with product performance in the subsidiaries' markets.
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National culture in the foreign markets is also found to moderate the effect of trust on relational
behaviors. In addition, the subsidiaries' acquiescence becomes increasingly important as the firm
attempts to standardize marketing programs. An important aspect of the MNC's marketing
strategy is the extent to which the marketing program for the product is standardized across
markets or adapted to each market. This choice of marketing program orientation has
implications for both relationship quality and product performance. In situations in which the
marketing program for a particular product is customized, such that the subsidiary's marketing
function is more autonomous in its developmental efforts or strategy implementation,
acquiescence to the headquarters may be less important for the product's ability to meet its
objectives.
Hodgon & Hoque (2017) A number of the theories underlying the concept of strategy can
be identified in Aspen’s development, such as:
investing in strategically valuable resources (physical assets, intangible assets or
capabilities) to obtain a competitive edge over rivals
reacting opportunistically to emerging possibilities; deliberately choosing a
distinctive set of activities to deliver a unique mix of value
selecting a strategic position by identifying which activities are incompatible and
purposefully limiting what the company offers.
The study suggests that leadership is at the core of strategy, and that the challenge of developing
a clear strategy is dependent on leadership. The manufacturing capabilities core competence was
through continuous investment and development, thereby creating a competitive advantage.
Many of the growth strategies adopted by Aspen were in keeping with the trends identified in the
studies on the pharmaceutical industry.
Khurana (2015) researched showed while globalization raises complex policy and socio-
economic issues around jobs, education and immigration, managers can view it as the
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introduction of a new and superior technology, coupled with the creation of new markets in the
BRIC countries. As technology globalization introduces a new way of doing business, and the
responsibility is on companies to either adopt this new technology or raise the efficiency of
existing technologies. When applied to R&D, this trend of globalization of R&D can be expected
to continue, possibly following the trajectory of the international product lifecycle, wherein R&D
centers in leading markets will become the innovative leaders, while product adaptation and
support tasks will be undertaken at R&D centers in secondary markets.
Maloney (2015) stated that the key to successful market entry and undertaking an
assessment of the costs, benefits and risks is a collaborative partnership with the global
custodian. Global custodians have vast amounts of information available on the various markets.
As an investor, it is important to be aware of the risks of holding assets in various markets. This
starts with a general knowledge of the risks at the global custodian, sub custodian and market
infrastructure levels as well as the operational risks and nuances of the local market. Another
important component is knowledge of which areas the investor is able to influence and those that
are not negotiable. Ultimately, an investor must be able to assess the benefits, costs and risks of
investing in the various geographies around the world and this will flow into an evaluation of the
attractiveness of the investment thesis. Through focused discussions with the global custodian,
investors can navigate the market entry process, identify the applicable risks and work together
to put appropriate mitigation and oversight processes in place to ensure they maintain an
awareness. An effective partnership with the global custodian is essential to understanding and
navigating the overall mosaic of complexity of investing in world markets.
Is their strategy similar to the Hout, Porter, & Rudden (1982) article?
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There are two studies that coincide as a similar strategy with Hout, Porter, & Rudden
(1982) article. Chatterjee (2017) study showed how the firm made deliberate investments in
general human capital with the strategic intent of developing these capabilities and competing
successfully with established foreign rivals. To reiterate, the study of Hodgon & Hoque (2017)
and how it showcased that Aspen’s core strategy was leadership. The core competence was
through continuous investment and development, thereby creating a competitive advantage.
Many of the growth strategies adopted by Aspen were in keeping with the trends identified in the
studies on the pharmaceutical industry. Chatterjee (2017) strategy is similar because the firm
willingly to commit financial resources. Hodgon & Hoque (2017) study on the growth of Aspen
Pharmacare how it improved the company’s worldwide cost position.
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References
Chatterjee, J. (2017), Strategy, human capital investments, business‐domain capabilities, and
performance: a study in the global software services industry. Strat. Mgmt. J., 38: 588-
608. doi:10.1002/smj.2505
Hewett, K., & Bearden, W. O. (2001). Dependence, trust, and relational behavior on the part of
foreign subsidiary marketing operations: Implications for managing global marketing
operations. Journal of Marketing, 65(4), 51-66.
http://dx.doi.org.ezproxy.liberty.edu/10.1509/jmkg.65.4.51.18380
Hodgon, V. M., & Hoque, M. E. (2017). The growth strategies of a global pharmaceutical
company: a case study of Aspen Pharmacare Holdings Limited. Problems and
Perspectives in Management, 15(1), 248-259.
http://dx.doi.org.ezproxy.liberty.edu/10.21511/ppm.15(1-1).2017.12
Khurana, A. (2006) Strategies for Global R&D. Research-Technology Management, 49(2), 48-
57. DOI: 10.1080/08956308.2006.11657368
Maloney, S. (2015). How investors can enter new markets and the questions they should ask their
custodian. Journal of Securities Operations & Custody, 8(1), 28-34.
Milhauser, K.L. &Rahschulte, T. (2010) Meeting the Needs of Global Companies Through
Improved International Business Curriculum. Journal of Teaching in International
Business, 21(2), 78-100. DOI: 10.1080/08975930.2010.483912
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