knowledge accessible quickly and effectively to other employees that need it. It is often necessary
to establish facilities in other international locations to gain access to required knowledge.
4. Define the Corporate Mission, Vision, and Values Statements.
These broad statements communicate to the firm’s stakeholders what the company is and where it
expects to go. Some firms have all three statements; others combine two or more.
a. Mission Statement defines the firm’s purpose and scope.
b. Vision Statement describes the desired future position, what it hopes to accomplish if it can
acquire needed competencies and successfully implement its strategy.
c. Values Statement is clear, concise description of the fundamental values, beliefs, and
priorities of the organization’s members.
NOTE: Additional examples can be found on company websites.
5. Set Corporate Objectives.
Objectives direct the firm’s course of action, maintain it within the boundaries of the stated
mission, and ensure its continuing existence.
6. Quantify the Objectives.
If objectives can be quantified, they should be. Firms frequently do have non-quantifiable or
7. Formulate the Competitive Strategies
a. Managers will formulate alternative competitive strategies and corresponding action plans
that seem plausible, taking into consideration the directions of external forces and the firm’s
strengths, weaknesses, opportunities, and threats.
b. Companies competing internationally confront two opposing forces: (1) reduction of costs
and (2) adaptation to local markets. To be competitive, firms must do what they can to lower
costs per unit so customers will not perceive their products or services as being too
expensive. This results in pressure for some of the company’s facilities to be located in places
where costs are low, as well as developing products that are highly standardized. Managers
must respond to local pressures to modify products to meet local market demands where they
do business. This pressures the company to differentiate strategy and product offerings from
nation to nation, reflecting differences in distribution channels, governmental regulations,
cultural preferences, and similar factors. Modifying products and services for the specific
local market requirements is costly.
As a consequence of the two opposing pressures, reduction of costs and local adaptation,
companies have four basic strategies for competing internationally: Home Replication
Strategy, Multidomestic Strategy, Global Strategy, and Transnational Strategy. As suggested
in Fig. 9-3, the strategy that would be most appropriate for the company, overall and for
various activities in the value chain, depends on the amount of pressure the company faces to
adapt to local markets and achieve cost reductions. The Worldview discusses the potential
value of the concept of regional strategies, sometimes termed semiglobalization, particularly
due to the potential to introduce a perspective that is neither nation-by-nation nor global in its
orientation. Such a perspective also reflects the tendency for many multinationals to generate
a majority of their revenues from a single region of the world.
c. Each strategy has its own set of advantages and
i. Home Replication Strategy centralizes product development strategy in the home
country, and after differentiated products are developed in this home market, they are