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Chapter 6
CHAPTER DISCUSSION QUESTIONS
Discuss why companies “go international,” giving specific reactive and proactive reasons.
As a reactive response, companies go international in order to respond to challenges from foreign competitors; to get around restrictive trade barriers; to do something about expensive host government regulations and restrictions; and to respond to consumer demands that may emerge. From a proactive point of view, companies internationalize in order to seek economies of scale; to overcome limited expansion opportunities at home; to gain access to resources and to realize cost savings abroad; and to improve competitiveness at home.
Discuss the ways in which managers arrive at new strategic directions—formal and informal. Which is best?
Formally, managers can use formal planning techniques like industry structure analysis leading to a SWOT analysis of the firm. They can carefully screen countries and opportunities to find a match between their resources and opportunities. Informally, they can use their intuition and their network of contacts and employees, to develop and implement venture ideas. Formal planning is by definition more systematic and is, therefore, more likely to uncover weaknesses in the company, threats in the environment, and/or strengths upon which to build and opportunities to exploit.
Explain the process of environmental assessment. What are the major international variables to consider in the scanning process? Discuss the levels of environmental monitoring which should be conducted. How well do you think managers conduct environmental assessments?
Environmental scanning is the process of information gathering and forecasting relevant trends, competitive actions, and circumstances that will affect operations in geographic areas of potential interest. Major international variables that are considered in scanning include: political instability, currency instability, nationalism, and degrees of international comp
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