DISCUSSION THREAD 2
International Business
Engaging in international business can create several opportunities for companies.
Importing/exporting, joint ventures, foreign direct investments, mergers and acquisitions, and e-
commerce and online formats are all examples of ways companies can cross over into the
international business space. Today, globalization plays a key role in fostering business
development abroad. Globalization has been fueled by advances in technology and it continues
to shape the way international business is conducted. According to (Contractor, 2022;
Kormakova et al, 2023), globalization creates an interconnectedness between countries adding
cross-border movements of ideas, people, technology, portfolio capital, and effective institutional
practices. Being connected to “well-connected” countries may provide greater opportunities for
knowledge transfers from partners of partner countries (Contractor, 2022; Gould et al, 2021;
Kormakova et al, 2023; Petricevic & Teece, 2019). This discussion will focus on why companies
should engage in international business, provide examples of companies who have been
successful doing so, and then end with suggestions for future research.
Companies should consider expanding internationally because of the numerous
advantages it can offer. The entry of enterprises and organizations into foreign
markets provide them with new opportunities that are vastly different from those present in
the domestic market (Kormakova et al., 2023). Penetrating a global market requires a company
to be strategic in nature in order to capitalize on the benefits. The strategic decisions made by
companies are critical in how successful they will be in establishing themselves. Those
companies who choose to engage in international business and are successful at it will enhance
their competitiveness and ultimately improve their growth and profitability. A competitive
advantage is constantly a crucial and vital component to make a business stand out above its
DISCUSSION THREAD 3
competition in the international market (Gomez-Prado et al., 2022). Some benefits of entering
international markets that create a competitive advantage for those companies include increased
opportunities for innovation, improved supply chain efficiency by reducing operational and
production costs, increased brand recognition, and increased sales and revenues through the
expansion of their customer base. It also gives them a sense of flexibility to adapt to the changing
needs of their business and the opportunity to spread risk throughout their portfolio. In the US,
we see successful penetration into foreign markets from companies in various industries that
include technology and electronics, automotive, pharmaceuticals, consumer goods, and retail.
Amazon, Apple, Toyota, Pfizer, and Nestle are examples of companies who have been
successful in the international market space. Each of these companies used different strategic
approaches to make a statement and establish themselves. Amazon was notorious for expanding
their presence by leveraging digital technologies, Apple was successful by investing in research
and development, Toyota used strategic collaborations, joint ventures and acquisitions to nudge
them ahead, Pfizer leveraged licensing agreements and mergers, and Nestle focused on
marketing strategies and innovation. In comparison to the strategies used by the three companies
in the article by Hout, Porter, and Rudden (1982), the company with the most similar strategy is
Nestle. Nestle leveraging marketing strategies allowed them to tailor their products to suit
regional preferences, tastes, and cultural nuances. Tailoring their products to make them more
attractive is similar to what Honda did to grow their motorcycle sales in the late 1950s to late
1960s.
Globalization has created substantial flows of capital and technology, and it has
motivated many nations to use this system as a vehicle to guide their industrial development
process (Petricevic & Teece, 2019). However, expanding internationally requires a company to
DISCUSSION THREAD 4
understand the differences in conducting business in the new country versus their home country.
Future research is needed on the role cultural intelligence plays in being successful in penetrating
foreign markets (Kormakova et al., 2023). Businesses must understand the cultural nuances and
expectations to be able to tailor their strategies to resonate with local consumers. Being able to
identify and utilize cultural knowledge can reduce challenges that arise with cross-cultural
communication barriers. Understanding the culture of the country businesses are looking to
expand into is critical to help them navigate the complexity of international business.
DISCUSSION THREAD 5
References
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