Top of Form

Week 5: The Strategy of International Business and Entering Foreign Markets – Discussion

Strategies of International Business (graded)

Do the Internet and international e-commerce change the choice of using a transnational strategy that has historically been successful for firms expanding globally? Would it make a difference if a firm relied heavily on traditional business channels versus just e-commerce?

Responses

Responses are listed below in the following order: response, author and the date and time the response is posted.

Expand AllSort by Read/UnreadResponseAuthorDate/Time
Mark as Unread Transnational Professor Hamilton Email this Author 3/30/2013 4:57:25 PM I would not limit my thinking to just e-commerce for this conversation. I would look at e-business platforms not just e-commerce platforms.     Mark as Read RE: Transnational Maria Zeledon Email this Author 4/1/2013 11:49:14 AM Professor;

I believe that any business must continue to pursue traditional business channels without loosing the e-commerce, e-business side, and vice versa…

Let’s revise the definition for each terminology

e-commerce definition.- “E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, especially the World Wide Web. In practice, this term and a newer term, e-business, are often used interchangably. For online retail selling, the term e-tailing is sometimes used.”

http://searchcio.techtarget.com/definition/e-commerce


e-business definition.- “E-business (electronic business), derived from such terms as “e-mail” and “e-commerce,” is the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners.”

http://searchcio.techtarget.com/definition/e-business

While we may continue to look at Amazon.com as an e-commerce because it has literally revolutionize the industry, and so many more e-commerce business have been created since, and continue to follow that model.. There are businesses like DeVry.edu, or our own classroom on DeVryu.net… I consider it an e-business because it provides a great service online for me, and all online students . Allowing us to take classes in an online environment. I have access to the same resources any student would need weather is on Campus or online.

To answer the question.. Would it make a difference if a firm relied heavily on traditional business channels versus just e-commerce? 

For me it would because I can no longer attend DeVry on campus like I did back from 1986 to 1989, the online classes made it very easy to make DeVry my choice again.
I am sure that there are plenty of DeVry students that continue, and need to take their classes on-campus, this is a group that should not be ignored either.. 
Neither group should be overlooked.

Therefore it makes much more sense to keep both…

María Lorena. 




    Mark as Read RE: Transnational Amit Thakkar Email this Author 4/1/2013 6:20:23 PM Transnational strategy are pursued by many organization to achieve low costs through location economies, economies of scale and learning effects, differentiate their product offerings to account for local differences and foster a multidirectional flow of skills between different subsidiaries in the firm’s global network of operations. But implementation of transnational strategy is difficult, so international strategy is used in place of transnational strategy to create value by taking products first produced for the domestic market and selling them internationally with only minimal local customization.  This strategy incorporates the use of e-commerce and e-business which is widely used to gain the competitive advantage against the other rivals and traditional businesses. Hill, C. (2012). Global Business Today. (7th ed.). New York: McGraw-Hill Irwin.     Mark as Read RE: Transnational Tiffany Knight Email this Author 4/1/2013 8:09:22 PM International ecommerce and ebusinesses help benefit businesses by giving them the ability to reach various platforms at a low cost that previously could not be done thus giving them a greater presence and global appeal by widening the auidence who they are able to do business. Ebusiness strategy can be summarized as strategies governing ebusiness through calculated information dissemination. E business gives a business the opportunity to open its portal to the global market and become part of the global business community. Ebusinesses most important feature is that it helps business move on an international scence at minimal cost but with maximum efficientcy. I believe that yes ecommerce and ebusiness change the choice of using transnational strategy because businesses now have easier access to various markets and communities so they can easier strategize ways to differentiate products so they are tailored to meet the demands of a certain location. This has been however a difficult task for many companies to emulate. I believe it would make a difference if a firm relied heavily on traditional business chanels versus ecommerce because some products sell a lot better online than by traditional business channels and it would give the company limited market appeal.

http://www.economywatch.com/business/e-business-strategy.html   Mark as Unread RE: Transnational Professor Hamilton Email this Author 4/1/2013 8:10:16 PM Modified:4/1/2013 8:10 PM Amit, I love that you point out “achieve low costs through location economies, economies of scale and learning effects.”

Here’s is a little article that might stimulate even more thoughts about the learning effects:   building_transnational_knowledge_networks.pdf   Mark as Read RE: Transnational Lanie Soliven Email this Author 4/3/2013 10:28:54 PM Advantages and Disadvantages of Ecommerce The invention of faster internet connectivity and powerful online tools has resulted in a new commerce arena – Ecommerce. Ecommerce offered many advantages to companies and customers but it also caused many problems. Advantages of Ecommerce Faster buying/selling procedure, as well as easy to find products. Buying/selling 24/7. More reach to customers, there is no theoretical geographic limitations. Low operational costs and better quality of services. No need of physical company set-ups. Easy to start and manage a business. Customers can easily select products from different providers without moving around physically. Disadvantages of Ecommerce Any one, good or bad, can easily start a business. And there are many bad sites which eat up customers’ money. There is no guarantee of product quality. Mechanical failures can cause unpredictable effects on the total processes. As there is minimum chance of direct customer to company interactions, customer loyalty is always on a check. There are many hackers who look for opportunities, and thus an ecommerce site, service, payment gateways, all are always prone to attack. http://www.esalestrack.com/blog/2008/09/advantages-and-disadvantages-of.html.     Mark as Read RE: Transnational Alisha Mills Email this Author 4/7/2013 8:19:32 PM Great break-down Lanie.
 It seems there are more advantages than disadvantages of ecommerce. Ecommerce has grown much faster than predicted.   Mark as Read RE: Transnational Larry Romero Email this Author 4/2/2013 10:28:45 PM Professor, It seems to me that by the definition that Amit gave, which is right from our text we would have to know more about the products being sold to answer this question. If the product that is being sold does not require any modifications to account for local differences then this would not fall under the definition of transnational strategy. Would it? Could you clear that up for me? If no or only a minimal amount of local customization is needed then would it be an International strategy? If my understanding is correct then if the product being sold has to be changed for each market then international e-commerce would still use the transnational strategy. E-business by the nature of the way it works seems to already meet the criteria of multidirectional flow of skill between subsidiaries as stated in Amit’s post. Can you please let me know if I am way off base.         Mark as Unread RE: Transnational Professor Hamilton Email this Author 4/3/2013 7:47:03 AM Modified:4/3/2013 7:58 AM Thanks for this great question, Larry. You are on the right track. All companies, not just those pursuing global or regionally based strategies, must deal with local market circumstances to a varying extent. In order to have regional success, local knowledge and international expertise add up to compettive advnatges. In many cases ‘insider contracts” are necessary for marketplace effectiveness. This occurs where local business connections are essential to gain access to key materials, suppliers, distribution, and so forth.

In the retail industry this is particularly challenging. New retail firms constantly emerge to threaten established retail forms. The electronic age has significantly increased the growth of nonstore retailing.


Also, it has generally been my opinion that access to funding and consequently financial infrastructure plays an inportant role in transnational growth strategies where achieving low costs through location economies while differentiating the product across geographic markets. Check out this 2002 issue of the Infrastructure and Financial Markets Review. [This is a publication of the Inter-American Development Bank see http://www.iadb.org/sds/IFM This might stimulte some nmore conversations.   Challenges Transnational Infrastructure Financial Markets.pdf   Mark as Read RE: Transnational Tawny Parker Email this Author 4/3/2013 5:54:38 PM I found it interesting that there was such difficulty in establishing a way to cost/benefit share between nations, I would think that it would be possible to have this evaluation with a third party broker, potentially a neutral third party nation or corporation that would evaluate costs and revenue to establish a more effective cost/benefit sharing situation- it is not that unlike having an auditor evaluate your mutual fund broker, to ensure that you are receiving the max benefit from your portion of a multiparty fund.      Mark as Read RE: Transnational Tiffany Knight Email this Author 4/3/2013 9:52:57 PM I found this interesting as well. Because transnational projects present asymmetric cost and benefits across different countries it sometimes leads countries to make individual decisions resulting in the loss of efficient transnational projects. The article sites three factors that account for the difficulty in transnational projects. The first issue being the difficulty for one country to enjoy the benefits from transnational projects when those benefits are spread across different countries. The second issue is countries are generally reluctant to pay for infrastructure assets located abroad and the third challenge being that there is lack of socially acceptable mechanism to distribute costs and benefits among countries.   Mark as Read RE: Transnational Gregory Jeffers Email this Author 4/3/2013 8:23:42 AM Hey Larry, The more I read this thread the more I find myself agreeing with you. First, Amit’s definition is as you say, “textbook,” and not sure it answers the question. I think you’re right on in thinking that we would need to know more specifics like product type or use before we could really answer the question. If you’re trying to determine if e-commerce changes the use of transnational strategy I think it’s highly dependent on many factors that we may not know? And I think you are right about the differences between transnational strategy and international strategy. If there’s very little need for change or differences then would seem be more international strategy? I’m seeing e-commerce as nearly equally beneficial for both international and transnational strategies. Really not seeing the advantage for international only?     Mark as Read RE: Transnational Amit Thakkar Email this Author 4/3/2013 5:56:33 PM Larry & Gregory,

Transnational projects are usually presents asymmetric costs and benefits across many countries depending upon local business strategies, political and legal barriers, and native culture. In several cases strategies may look it may work for a company but it may not work for local countries and they may not want to invest in a company which incurs more cost compared to benefits in one country and it may benefits more than it incurs cost in another country. Such asymmetric benefits and costs among different countries makes it difficult to implement transnational strategy to produce symmetrical benefits and costs across the countries. In such cases company decides the effective location for production or manufacturing and distribute to other countries gaining the benefits of the location where the policies are in favor of the company which produces more benefits then it incur costs. So, as compared international strategy are found to be more effective and having use of e-commerce and e-business helps such companies to go global to sell their products and services to gain competitive advantage and save money in facilities across the countries.     Mark as Read RE: Transnational Aaron Estep Email this Author 4/3/2013 6:51:05 PM Modified:4/3/2013 6:52 PM I think I get it and have a good example.  If a company is using a transnational strategy then they design their product for their home market, then they take that same product and see if it will catch on overseas without modification.  It is a much cheaper approach since it would take many differant models and lots of research to customize each countries product:

For an example I’d like to use the iphone.  Apple only produces one design (the GSM/WCDMA radio being the only difference in some), and then sells that design everywhere.  That is a Transnational strategy.

Now that apple has seen where their brand has had success they may be (there’s lots of speculation in the news) designing an iphone targeted towards the Chinese consumers.  So, they are shifting towards an international strategy now that they better understand their customer’s markets.


-Aaron   Mark as Read RE: Transnational Larry Romero Email this Author 4/4/2013 10:00:21 PM Hello Amit,

I am trying to understand your post and I believe that you are saying that that an international strategy is found to be more effective when companies use e-commerce and e-business to go global in an effort to sell their products. I try to read and understand the textbook first and I don’t see that or any reference to that statement in our textbook. Would you mind giving me the source for you statement so I can read it? If your statement is true it brings me back to the fact that it would have to depend on the product being marketed for an international strategy to be the most effective for e-commerce and e-business. I can’t find anywhere that says that. Can you please help me out with a source?      Mark as Read RE: Transnational Gregory Jeffers Email this Author 4/5/2013 1:26:51 AM Modified:4/5/2013 1:34 AM Hi Amit, Really no disrespect but I cannot understand what you are saying exactly? Asymmetric costs and benefits means they vary from country to country depending on local conditions? Is this what you are saying in reference to these? And that international strategy is more supportive of e-commerce and e-business? Or are you saying the reverse? That transnational strategy is more supportive of e-commerce and e-business? Due to your point about asymmetric costs I’m guessing you are supporting transnational strategy in this case?

International strategy is used when price pressure and competition or customization is low?

Transnational strategy is cost focused and continually trying to achieve economies of scale through internal knowledge transfer, economies of scale and realize some localized economies?

Does either of these models better support e-commerce and/or e-business? I don’t think based on these definitions alone we can properly support a decision, which is why I like Larry’s suggestion that you really need to know more details, like product type?     Mark as Read RE: Transnational Amit Thakkar Email this Author 4/5/2013 6:51:41 PM Modified:4/5/2013 6:55 PM Gregory,  see below and see I tried to answer your questions hope this make sense…

Asymmetric costs and benefits means they vary from country to country depending on local conditions?

Yes, because local tax structure, legal barriers and local government policies affects the operational costs and benefits of doing business. Each country has their own policies which makes the asymmetric costs and benefits.

this what you are saying in reference to these?

Yes, because transnational strategy implementation is complex and challenging in countries which lacks distributing costs and benefits among other countries.


International strategy is used when price pressure and competition or customization is low?

Yes, because International companies perform the R&D in local countries and sell their products in other countries where customization to products is not required and it can sell at desired cost which means price pressure and competition is low.


International strategy is viable when competition is low and it is not for long term, because you will have new emerging business which will bring competition and increase the price pressure and at that point business focus on transnational strategy to identify the local market in a country where they can customize the cost and product to sustain their competitive advantage.

At this point company invests in new products (R&D) in local countries and market new products internationally because price pressure and product customization is low for new products.

See attached article and pg. 405-406 in our text for more details. Hill, C. (2012). Global Business Today. (7th ed.). New York: McGraw-Hill Irwin.

  Challenges Transnational Infrastructure Financial Markets.pdf Mark as Read RE: Transnational Lanie Soliven Email this Author 4/7/2013 12:21:37 AM Transnational Project Groups (TPGs) involving experts from institutions representing at least three Member States and/or Partner States are carrying out the ESPON projects.

Each TPG has to apply the “Lead Partner Principle”. This project management structure implies that one partner (Lead Partner) holds the financial and administrative responsibility for the entire project and the involved project partners. Project partners in ESPON Projects under Priority 1, 2 and 3 can include public as well as private bodies. For Priority 4, Transnational Network Activities, the TPG’s are composed of institutions nominated by Member and Partners States as national ESPON Contact Points and confirmed by the Monitoring Committee.   Mark as Unread RE: Transnational Professor Hamilton Email this Author 4/1/2013 8:12:22 PM Thanks for the clarification, Maria. I think the course designers created a limit to our thinking by only mentioning one of these.     Mark as Read RE: Transnational Brandy Jazdzewski Email this Author 4/3/2013 5:53:00 PM I agree with you Maria. I believe that both is very important and they should go hand in hand!

If a business relies on traditional business practices they would be limited to their customer availability and sales.

E-commerce is very important in todays business world.     Mark as Read RE: Transnational Fannie Cameron Email this Author 4/6/2013 8:45:44 PM E-business is the function of deploying technology to maximize customer value while E-commerce is the function of creating exchange (i.e., buying and selling) over digital media. the new paradigm of E-business that is being currently defined is simply technology driven.   Mark as Read RE: Transnational Lanie Soliven Email this Author 4/7/2013 12:24:13 AM I would also have to agree, E-commerce is important in the commercial market nowadays.E-commerce proved its importance based on the fact where time is essence. In the commercial markets, time plays an important role to both the business and consumers. From the business perspective, with less time spent during each transaction, more transaction can be achieved on the same day. As for the consumer, they will save up more time during their transaction. Because of this, Ecommerce steps in and replaced the traditional commerce method where a single transaction can cost both parties a lot of valuable time. With just a few clicks in minutes, a transaction or an order can be placed and completed via the internet with ease. For instance, a banking transaction can be completed through the Internet within a few minutes compared to the traditional banking method which may take up to hours. This fact obviously proves that Ecommerce is beneficial to both business and consumer wise as payment and documentations can be completed with greater efficiency.     Mark as Read RE: Transnational Brandy Jazdzewski Email this Author 4/7/2013 5:49:36 PM I agree. Due to E-commerce businesses are more competitive, has increased the number of customers, and allows a time savings as well as cost savings to due to business.

E-commerce has removed the personaization effect of doing business.   Mark as Read RE: Transnational Lanie Soliven Email this Author 4/3/2013 10:26:57 PM In corporate circles, the words e-commerce and e-business have for long been used synonymously and few have come to acknowledge the innate differences between them. And indeed there is! Traditionally, e-commerce relates only to those processes in a business which directly affects the customers, suppliers, vendors and other business partners. These processes include sales activities such as order taking delivery, payment via credit cards, customer support et al. It may also include interactions with suppliers regarding purchase of raw materials and office supplies.     Mark as Read RE: Transnational Tawana Robinson Email this Author 4/3/2013 10:35:27 PM Maria, you have a great point.  Both e-commerce and brick-and mortar platforms have a place in the business world.  There are more examples of hybrids popping up.  For example, you can go to Best Buy’s website and make a purchase and then have it delivered to the store for you to pick up.  Brick-and-mortar and e-commerce businesses both have a place in the world.  There are customers who do not feel comfortable making purchases online for various reasons such as distrust of submitting credit card information online.  You also have customers (like me) who hate waiting in lines and dealing with crowds and prefer the convenience and simplicity of buying online.  As long as these types of customers exist, there will continue to be a need for both types of business platforms.   Mark as Read RE: Transnational Makki Makki Email this Author 4/1/2013 9:20:43 PM As of today e-business has develop standard operating procedure for the vast common of companies. Setting up and running an e-business, especially one that the trades that provide the most reliable, most functional, most user-friendly and fastest services will be the ones that succeed and Commerce is the exchange of goods and services for other goods and services or for cash payment. E-commerce is all that a firm conducts commerce through electronic technology. Since commerce is clearly a sort of business, all the keys to success for e-business automatically apply for e-commerce also.     Mark as Read RE: Transnational Joe DeLoach Email this Author 4/2/2013 6:13:00 PM If a firm relied heavily on traditional business channels market penetration and business expansion is constricted. On the other hand, an e-commerce methodology allows businesses to reach a wider audience at reduced costs and without time restrictions.     Mark as Read RE: Transnational Scott Tsai Email this Author 4/2/2013 9:26:30 PM E-business surely is taking global market possibilities to a whole new level. If you happen to have a unique product that you want to sell overseas, these are the websites that will help you find customers on a global basis.

www.alibaba.com
www.globalsource.com

They’ve grown to be very sophisticated in terms of managing your products from sourcing to selling, keeping track of your client leads and even allow you to trade your partners in real-time. Of course there are many good e-business platforms out there like Oracle, Salesforce.com,     Mark as Read RE: Transnational Lazara Cuza Email this Author 4/3/2013 7:28:56 PM In the transnational strategy, a business depends on information systems and technologies to assist in the integration of its international business.      Mark as Read RE: Transnational Scott Tsai Email this Author 4/5/2013 6:26:08 PM Yes, Lazara, and I think one of that information systems and technologies is the integration of business solution for international transaction in most currencies (I bring it up because it has one of the most rewards and challenges) any multinational business needs. This is critical because it depends on how products and services get delivered overseas and how the organization gets paid.

The dilemma is that an international business is reluctant to get its products or services delivered without upfront payment and yet the overseas customers do not want to pay the upfront payment unless they see the products or services presented before their eyes. But of the many business solutions out there, I was wondering if there is one that really helps out with that problem?     Mark as Unread RE: Transnational Professor Hamilton Email this Author 4/5/2013 8:09:03 PM Modified:4/5/2013 8:13 PM Yes, Scott and Lazara, I do also believe that the Internet and development of enterprise resource planning systems and cloud services have propelled many companies to pursue a transnational strategy.

Check out what Jeffrey Rayport has to say about the effect of E-Business.   Monitor_Truth_About_Internet_Business_Models.pdf   Mark as Read RE: Transnational Tawny Parker Email this Author 4/5/2013 9:36:16 PM When I read what Mr. Rayport had to say I was struck by the realization, that what made (makes) the internet unique isn’t the business models or the changes that have occured, as those tend to look much like models that can be foudn in the regular economy. What was striking was the speed at which changes occured, the development of the internet is high paced, not necessarily special in any way. Interesting thought, when this article was written, AOL was on top of the world, Amazon’s future was in question and Yahoo was the world’s dominant search engine- the irnoy is that whan took a more in depth look at some of these companies for where they are now, I Googled them.     Mark as Read RE: Transnational Scott Tsai Email this Author 4/6/2013 4:05:46 PM That pdf file also kind of amazed me, but it was not a whole lot of surprises. Indeed (e-commerce) is just another kind of pyramid where you have a lot of those at the bottom and very few on the top. So the whole concept of this “innovative” marketing model is no different compared with any other brick-mortar businesses.    Mark as Read RE: Transnational Tawana Robinson Email this Author 4/6/2013 5:17:00 PM Scott, you bring up a valid point.  I work for an e-commerce company and we do require our customers to pay upfront.  This is mostly because drop shipping is utilized to deliver the products from the manufacturer directly to the customers.  Vendors bill their invoices on the ship date and most require payment anywhere from upon receipt of the invoice, to 45 days after the invoice date.  This is the reason why we charge our customers upfront.  If an e-commerce business were to expand globally with vendors in various vendor locations and customers around the world, most likely they will have to require customers to pay at the time of sale.  I think a good way to handle this situation is to have a really customer-friendly return / guarantee policy.  One that reassures the customer about paying for their purchase upfront.   Mark as Read RE: Transnational Fannie Cameron Email this Author 4/6/2013 8:49:14 PM Language barriers and cultural differences often present unique challenges to domestic companies operating internationally. Transnational companies address these issues by providing customers with language options. Communication strategies and technological infrastructures provide for resources in the local market that speak the native language and understand the local cultures and customs. Diversity in the workforce provides an expansion in customer reach by increasing the languages that the organization can service, in addition it provides experience in managing cultural diversity among its customer and employee base.   Mark as Read RE: Transnational Alisha Mills Email this Author 4/3/2013 6:46:03 AM Traditional businesses require a lot of man power. The cost and risks of starting a traditional business can be intimidating. A traditional business would not be able to keep up with it’s competition if it did not offer online shopping. E-business has taken over as for as the retail world. E-business provides versatility and flexibility to business owners as well as consumers. As a business owner, your risks are much lower using e-business.     Mark as Unread RE: Transnational Professor Hamilton Email this Author 4/3/2013 8:05:05 AM Modified:4/3/2013 8:54 AM Great discussions here about technology and transnational strategies. SAP has grown to be a powerful technology partner for many firms developing an eBusiness platform. Some of you might want to engage them as an outsource partner for your class projects. {Globalizing of Apparel Businesses} see http://www.sap.com   SAP_Business_Suite.pdf Mark as Read RE: Transnational Sean Mccauley Email this Author 4/3/2013 5:23:54 PM Alisha, you bring up a good point in regards to the excessive cost of traditional business in comparison to e-business.  The traditional business not only has to incorporate the personnel to staff a traditional type of commerce, but also the obvious production aspects.  In an e-commerce environment, there isn’t the need to have such a legitimate work force given that the focus of a less traditional, online business is aimed at the consumer accessing a website and not coming to a physical location.  Without an online purchasing application, a newly operational business is likely to fail, or at the least have a difficult time staying competitive with other companies. Online business has become a staple of business in today’s market and in order to maintain pace with others, e-commerce is a must.      Mark as Read RE: Transnational Lanie Soliven Email this Author 4/7/2013 2:39:08 PM I agree that Diversity is very much given an attention when it comes to e-commerce because people around the world are given the option of what language to use, also I do believe that sometimes people can get to intimidated or feel uncomfortable going to stores or talking to people in person or over the phone so having an online store or given the option to chat is really great. Also, being able to shop while you are at home or when you don’t have the time to go to the mall, at anytime time of the day of night is great thing.   Mark as Read RE: Transnational Fannie Cameron Email this Author 4/6/2013 8:33:55 PM Modified:4/6/2013 8:35 PM Yes it would make a difference if a firm relied heavily on traditional business channels versus just e-commerce. The WWW changes the traditional landscape of the business environment from that of being a Marketplace to one that is more of a Market space. This marketspace is an information and communication based electronic exchange environment occupied by sophisticated computer and telecommunication technologies and digitized offering.   Mark as Read Strategies of International Business Daterryon Sturghill Email this Author 3/31/2013 6:46:28 PM Traditionally, e-commerce relates only to those processes in a business which directly affects the customers, suppliers, vendors and other business partners.E-business however is a super set of e-commerce and includes a gamut of other management processes that include inventory management, production and product development, supply chain management and financial management apart from e-commerce itself.

With more businesses embracing the Internet revolution with ascending fervour day by day, it is fast becoming imperative for businesses to quickly carve a niche for themselves in cyberspace and better their competitors.

http://www.carltoncove.com/wahm/1643/ebusiness-vs-ecommerce/     Mark as Read RE: Strategies of International Business Ermira McCaskey Email this Author 3/31/2013 9:02:50 PM The e-commerce has allowed businesses to expand their global presence at a lower cost than ever before. Businesses through internet and e-commerce have reached market beyond their traditional locality and have gained access to new customers and suppliers. E-commerce has become important not only in consumer market (B2C) but in Business to Business market (B2B). Use of internet and e-commerce has become a necessity for many business that have entered or want to enter global market.      Mark as Read RE: Strategies of International Business Bethuel Toroitich Email this Author 3/31/2013 10:33:44 PM I agree with you that e-commerce is one of most important forms of business currently, and without e-commerce a businesses will be faced will a lot of competition from those who e-commerce in their day to day running. It would make a lot of deference if a business relied heavily on traditional business channels because with e-commerce transactions between B2B ,B2C is faster than traditional ways. Also handling inventory using the e-commerce is very effective and efficient because with something just- in- time, company are able to replenish inventory very fast which will increase the turn around time of all its materials which is good for business.     Mark as Read RE: Strategies of International Business Renee Parker Email this Author 4/1/2013 12:56:10 PM To add to the discussion is not only B2B, B2C, is the idea of C2C, each step in the e-commerce transaction chain is considered a customer of the next step. In other words R&D is a customer of procurement in the e-commerce model whereby each step in the supply chain is a customer of the next step. Buy thinking of each step as a transaction C2C relationship are created to improve the supply chain efficiency. In addition to improved efficiency there is realtime data reporting to track market trends, quality control and deliverables. Each customer in turn has customers is support it the supply chain which improves customer service lowers costs while improving productivity. In one sense C2C e-commerce is efficiently using e-business to create value in the development and delivery of new products and services to an expanding global market.     Mark as Unread RE: Strategies of International Business Professor Hamilton Email this Author 4/1/2013 8:16:09 PM Thanks for that thread, Renee. B2C [business to consumer] networks are a step up for certain companies. It gets even more complicated with B2B [business to business] networks.
 
How can B2G [business to government] networks effect transnational strategies?     Mark as Unread RE: Strategies of International Business Gregory Jeffers Email this Author 4/2/2013 11:19:22 PM My first reaction to this question is, to think of B2G networks as highly promotional of transnational strategies, although not for some idealistic benefit, but rather governments can be pretty selfish and demanding, often making organizations comply with sometimes crazy local requirements. If you’re a global organization, whether you’re a traditional business and/or e-commerce/e-business it doesn’t matter. If you want to do business in a certain market you can expect the local government to get involved… and this involvement will likely force you to adopt a more transnational strategy to comply.     Mark as Unread RE: Strategies of International Business Maria Zeledon Email this Author 4/3/2013 11:57:04 AM I am not picking on you today Gregory, just found your comments interesting, and want to make sure you and I are on the same page… Allow me to enter some definitions found online.. Difference between a global, transnational, international and multinational company We tend to read the following terms and think they refer to any company doing business in another country. ·        Multinational ·        International ·        Transnational ·        Global Andrew Hines over at BNET has brief and clear definitions of each of these terms, Get your international business terms right. Each term is distinct and has a specific meaning which define the scope and degree of interaction with their operations outside of their “home” country. ·        International companies are importers and exporters, they have no investment outside of their home country. ·        Multinational companies have investment in other countries, but do not have coordinated product offerings in each country. More focused on adapting their products and service to each individual local market. ·        Global companies have invested and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office that is responsible for global strategy. Emphasis on volume, cost management and efficiency. ·        Transnational companies are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual foreign market. http://leeiwan.wordpress.com/2007/06/18/difference-between-a-global-transnational-international-and-multinational-company/ I work for Comprehensive Health Service International Support… (IT Department of course)…And I believe we are a B2G kind of company.. Our business not only deals exclusively with government agencies in the area of Pre-Placement, Pre-Deployment, and Fitness-for-Duty Exams to Disability Management, Medical Surveillance, and Wellness Programs CHSi manages complex programs for the nation’s largest companies and federal agencies. We also set up, and manage clinics in Iraq, Afghanistan, and Haiti, just to name a few… We have developed and maintain proprietary software to target each of our customer’s needs (different government agencies), and this is very much an e-business, on site business geared to medical providers that service veterans, and international locations.. I guess I am not understanding what you are trying to say.. Yes sometimes there are certain scenarios that need to be address because the world does not run things the way the USA does, and that does not mean that we are right, and that they are wrong… It just means that rules and regulations need to set in a way that is beneficial to the circumstances of that specific country… Also true is that CHS provides a service, and does not sell a product that we can say we are also on the e-commerce business… As Americans I would like to see a little bit more of open mindness not all we do is perfect, and not all we do will work perfectly on the rest of the world. Every country is unique, as we are all unique in this class… The more I read I guess I am having difficulty with two of your statements that I just don’t quite get it… Or I am completely disagreeing… Here they are..   To think of B2G networks as highly promotional of transnational strategies Governments can be pretty selfish and demanding http://www.chsimedical.com/ María Lorena     Mark as Read RE: Strategies of International Business Tawny Parker Email this Author 4/7/2013 9:09:45 PM I’m in agreement with Maria,
  Over the course of my life I have worked with many B2G networks, as a matter of fact we here in the United States benefit from them quite often, our federal government sources a great deal of military technology from the UK, Germany, and Israel, some items for our self defense are not even made in the US any more period (Hand grenades for the US are made exclusively by a Swiss firm), On the other end of the line there are a great many things that are produced by U.S. companies for export to foreign governments. In most countries outside of North America (U.S., Mexico, and Canada) the Rail infrastructure and Railways themselves are government owned, and buy a great deal of material and technology from independent U.S. firms and railways.

Although I don’t think of governments as altruistic (they are run by people after all) I would not go so far as to say that they are all selfish and demanding, or that they force a transnational strategy. I think businesses that are interested in government sales or contracts already operate with a transnational strategy and typically bid on the contracts, there is very little coercion that is being done to US companies to force them to take on government contracts.


I too think of these strategies being transnational.   Mark as Unread RE: Strategies of International Business Daterryon Sturghill Email this Author 4/3/2013 10:35:37 AM Federal buyers use commercial and business-friendly practices, such as buying off-the-shelf items and paying by credit card within 30 days after submitting an invoice. The sooner the government understands your business and how your business can fill their needs, the better your chances of winning a federal contract. The government wants to do business with small businesses because of the innovation and lean operations used to be competitive.     Mark as Read RE: Strategies of International Business Renee Parker Email this Author 4/3/2013 11:20:17 AM Daterryon –  are you referring to home country government working with local businesses? Or are you referring to international business utilizing e-commerce to do business with foreign governments? I think both scenarios can be developed using e-commerce expanding e-business to off shore consumers in foreign governments. Relationships with foreign governments can lead to expanding business opportunities and facilitate transnational strategies for emerging global enterprizes. Products and services can be molded to the local consumer tastes to improve marketability while e-commerce digital chains can move goods from where they are manufactured to the market in any region. The possibilities extend the reach of business in the global context to anyone with a computer and an internet connection.   Mark as Read RE: Strategies of International Business Robert Williams Email this Author 4/3/2013 2:13:18 PM The global marketplace of today is increasingly complex, affected by such interlacing factors as new regulatory frameworks and tax policies, a rapidly evolving copyright environment, shifting relations between countries, environmental concerns, and the strong influence of domestic political pressures on governments’ policies worldwide. Constant change in both policy and market forces is the medium in which international businesses must operate.     Mark as Read RE: Strategies of International Business Joe DeLoach Email this Author 4/3/2013 8:24:40 PM Modified:4/3/2013 8:31 PM Thanks for providing more clarity Maria. l didn’t fully understand the difference between international,multinational,global and transnational companies. After reading  your information from the BNET site, I understand my company structure better now. I work for a global organization. My company has locations in the US,Canada,Europe, and Asia with one  corporate location and a global vision,brand,etc.

http://teaminc.com   Mark as Read RE: Strategies of International Business Makki Makki Email this Author 4/3/2013 8:41:48 PM I think B2G networks provide a highly platform for businesses to bid on government opportunities which are presented as solicitations in the form of RFPs in a reverse auction fashion.

Makki      Mark as Unread RE: Strategies of International Business Professor Hamilton Email this Author 4/3/2013 10:16:06 PM Good observation, Makki.   Mark as Read RE: Strategies of International Business Bethuel Toroitich Email this Author 4/3/2013 10:24:24 PM I think the way the B2G  network affect  transnational strategies is that because it involves other countries, then i think the issues of trade tariffs ,agreement and regulations in different countries will affect the way business will be transacted and  ” In essence, firms that pursue a transnational strategy are trying to simultaneously achieve low costs through location economies, economies of scale, and learning effects; differentiate their product offering across geographic markets to account for local differences; and foster a multidirectional flow of skills between different subsidiaries in the firm’s global network of operations. As attractive as this may sound in theory, the strategy is not an easy one to pursue since it places conflicting demands on the company.Differentiating the product to respond to local demands in different geographic markets raises costs, which runs counter to the goal of reducing costs.” (Hill 404)
Hill, Charles W.L.. Global Business Today, 7th Edition. McGraw-Hill Learning Solutions, 2012.       Mark as Unread RE: Strategies of International Business Ddungu Wasswa Email this Author 4/5/2013 10:30:51 PM Businesses to government network are the networks when a business deals with the government bodies for their business requirements. When an organisation does this it is very essential that the organisation or the company to make sure that the business dealings are done according to the norms of the government. Government follows strict norms and do not accept all types of businesses. Hence the companies have to change their transactional strategies according to the government. The strategies used in B2B (business to business) and B2C (business to customer) type of business are very different from that of B2G type of business.   Mark as Read RE: Strategies of International Business Fannie Cameron Email this Author 4/7/2013 11:02:56 PM On the Internet, B2G is business-to-government (a variation of the term B2B or business-to-business), the concept that businesses and government agencies can use central Web sites to exchange information and do business with each other more efficiently than they usually can off the Web. For example, a Web site offering B2G services could provide businesses with a single place to locate applications and tax forms for one or more levels of government (city, state or province, country, and so forth); provide the ability to send in filled-out forms and payments; update corporate information; request answers to specific questions; and so forth. B2G may also include e-procurement services, in which businesses learn about the purchasing needs of agencies and agencies request proposal responses. B2G may also support the idea of a virtual workplace in which a business and an agency could coordinate the work on a contracted project by sharing a common site to coordinate online meetings, review plans, and manage progress. B2G may also include the rental of online applications and databases designed especially for use by government agencies.     Mark as Read RE: Strategies of International Business Fannie Cameron Email this Author 4/7/2013 11:04:22 PM On the Internet, B2G is business-to-government (a variation of the term B2B or business-to-business), the concept that businesses and government agencies can use central Web sites to exchange information and do business with each other more efficiently than they usually can off the Web. For example, a Web site offering B2G services could provide businesses with a single place to locate applications and tax forms for one or more levels of government (city, state or province, country, and so forth); provide the ability to send in filled-out forms and payments; update corporate information; request answers to specific questions; and so forth. B2G may also include e-procurement services, in which businesses learn about the purchasing needs of agencies and agencies request proposal responses. B2G may also support the idea of a virtual workplace in which a business and an agency could coordinate the work on a contracted project by sharing a common site to coordinate online meetings, review plans, and manage progress. B2G may also include the rental of online applications and databases designed especially for use by government agencies.   Mark as Read traditional business vs e-commerce Shirley Hollins Email this Author 3/31/2013 9:18:31 PM E-commerce simply put means to shop electronically, electronic commerce.  We shop via the internet also known as the WWW or World Wide Web.  E-commerce is also used for trading by businesses to support their buying, selling, hiring, and planning.  The internet is bringing about a conjunction of technologies, mixing markets, entire industries, and firms in the process.  I also think it’s safe to say that traditional boundaries and business relationships are breaking down.  Telephone networks are merging into the Internet, and cellular phones have become Internet access devices.  Traditional markets and distribution channels are weakening and new markets are being created.  Today, networking and the Internet are nearly identical with doing business.  Why Information Systems Matter. (2006). Retrieved March 31, 2013, from Azimuth Interactive Inc.: http://iauec.net/MDF/ch1/chpt1-1main.htm       Mark as Read RE: traditional business vs e-commerce Laura Hatfield Email this Author 4/1/2013 9:18:35 AM When a firm is trying to pursue a transnational strategy they are trying to simultaneously achieve low costs through location economies, economies of scale and learning effect: differentiate their product offering across geographic markets to account for local differences; and foster a multidirectional flow of skills between different subsidiaries in the firm’s global network of operations. This strategy is not easy to pursue because it places conflicting demands on the company. (Hill p404)     Mark as Read RE: traditional business vs e-commerce William Garl Email this Author 4/1/2013 4:56:52 PM Modified:4/1/2013 5:01 PM Shirley, I would have to say that you are correct about the e-commerce and where it is going in not only today’s society but as well as the future. E-commerce is a hot topic in today’s news because of the sales that it brings in via the internet and the amount of businesses/companies that are involved in e-commerce. Here is a website that shows the sales in 2012 for the top five countries in e-commerce. It continues to grow and is expected to hit nearly $1.3 trillion dollars in e-commerce sales. http://mashable.com/2013/02/05/ecommerce-sales-top-1-trillion-worldwide/     Mark as Read RE: traditional business vs e-commerce Jenna Shaffer Email this Author 4/2/2013 9:48:30 AM William, your post got me thinking. I read the comments under this article and saw someone referenced Pinterest and e-commerce so i decided to do a little research on Pinterest myself. For those of you who do not know what Pinterest is, please visit this website: http://about.pinterest.com/

Basically Pinterest is a website where you can save websites that link you to places where you can buy anything you please. This is basically a mecca of ecommerce.

A simple search on that website came up with all of these results: http://pinterest.com/search/?q=ecommerce

What do you think?   Mark as Read Transnational Strategy Daterryon Sturghill Email this Author 4/1/2013 1:53:20 PM There appears to be no doubt that the increasing use of the Internet by firms with global operations will result in changing their move toward a transnational business strategy.  As firms increasingly extend their product offerings into the global marketplace they will have little choice but to develop a transnational business strategy in order to survive.     Mark as Read RE: Transnational Strategy Renee Parker Email this Author 4/2/2013 5:31:55 PM Transnational strategy is how the organization positions itself with regard to the global business environment and how it formulates its strategies to compete in the global market. It seam to me that transnational strategies can take place in all levels of an organization, from Human Resources to Marketing. In the global context organizations must consider the effects of transnational strategies in the home country as well as foreign countries it does business with.     Mark as Read RE: Transnational Strategy Laura Hatfield Email this Author 4/2/2013 9:21:35 PM Many industries are now so competitive that firms must adopt a transnational strategy. But changing a firms strategic posture to build an organization capable of supporting a transnational strategy is a complex and challenging task. In order to create a viable organizational structure and control system to manage this strategy is immense.   Mark as Read RE: Strategies of International Business Robert Williams Email this Author 4/1/2013 2:29:59 PM Modified:4/2/2013 12:20 PM    The Internet and the World Wide Web are both vital components in international business and e-commerce.  The Internet, with its interconnected network of thousands of networks of computers and databases, has established itself as a technology platform free of many traditional international boundaries and limits. Transnational strategy a management approach in which an organization integrates its global business activities through close cooperation and interdependence among its headquarters operations and international subsidiaries, and its use of appropriate global information technologies.     Mark as Read RE: Strategies of International Business Shirley Hollins Email this Author 4/5/2013 8:06:36 PM I’m thinking back to when the Internet first started.  I was applying for a secretary job and needed to know how to use the internet and the computer.  Needless to say, I had never even turned a computer on.  I was just sitting there looking crazy trying to figure it out.  Well it didn’t take the manager long to see that I was clueless.  Now I’m a computer wiz.   Mark as Read week 5 Jenna Shaffer Email this Author 4/1/2013 7:42:13 PM Yes, the Internet and international e-commerce would change the choice of using a transnational strategy because without it companies wouldn’t be able to make as much money. The internet has helped companies to move into selling their products online. According to our text, “…firms that pursue a transnational strategy are trying to simultaneously achieve low costs through location economies, economies of scale, and learning effects; differentiate their product offering across geographic markets to account for local differences; and foster a multidirectional flow of skills between different subsidiaries in the firm’s global network of operations (Hill, 405).” This may seem like a great and easy thing to do but companies are finding it difficult to keep up with implementing transnational strategy.  I think it would make a difference if a firm relied heavily on traditional business channels versus just e-commerce because I think it would be the perfect match if a company would use both traditional business channels and e-commerce.




Charles W.L. Hill. Global Business Today, 7th Edition., 2012. Bookshelf. Web. 02 April 2013
 <http://devry.vitalsource.com/books/0077631471/id/L11-2-15>.     Mark as Read Strategies of International Business Robert Williams Email this Author 4/2/2013 12:35:16 PM Due to the increased popularity and availability of Internet access many traditional  businesses are considering eCommerce as a valid and profitable sales channel. However, eCommerce and traditional commerce are very different, and it’s important to weight carefully the differences between eCommerce and traditional commerce in order to decide if it would be a good fit for any business or just a costly mistake. Traditional commerce is often based around face to face interaction. The customer has a chance to ask questions and the sales staff can work with them to ensure a satisfactory transaction. E-Commerce is usually much cheaper than maintaining a physical store in an equally popular location. With an online shop you can do business with anybody living on a country you are able and willing to send mail to, unlike traditional commerce where you are restricted to people who actually come to your shop.     Mark as Read RE: Strategies of International Business Gloria Armijo Email this Author 4/2/2013 3:14:44 PM The Internet allow both large and small business to stay competitive in the global market, E-market.  In the class project I am working on our  company is doing well but recently gone it to full eCommerce online in the 53 counties they do business with.  So many people are exposed to  electronic media now days if you do not get on the band wagon you will be left behind. The consumers are savvy when it comes to getting the best deal by going on line and shopping around.  The world is flat and small because the internet is  shortening the distances between the businesses and consumers on a global scale.     Mark as Read RE: Strategies of International Business William Garl Email this Author 4/3/2013 7:49:31 PM The internet does in fact allow both the larger and smaller businesses to compete equally online. The internet is what makes it possible for the smaller companies to get recognized at a faster rate and puts them on the same level as the larger companies. There are all sorts of advertising possibilities for both larger and smaller companies. Sites that allow for companies to grow at a faster rate allow for customers of those companies grade/rate their products and offer feedback on the company.   Mark as Read RE: Strategies of International Business Makki Makki Email this Author 4/5/2013 7:46:56 PM Gloria ,I agree with you  that since the Internet has developed a business tool instead of merely a research network, businesses both large and small have seized the opportunity to explore how to use it to become more productive and competitive and also there are more opportunities to exploit the Internet technology beyond its existence as a common global network to encompass enterprise-wide networks and inter-organizational systems.    Mark as Unread Strategies of International Business Ddungu Wasswa Email this Author 4/2/2013 7:05:43 PM Internet has changed the way today international business is done. Earlier the strategies were based on resources of the company. Only big organization used to go international but with internet now small firms can also go global and manage their business in different countries with the help of internet. Nowadays it is important to have proper balance of both traditional business channels and e-commerce in order to succeed in foreign market. The availability of internet infrastructure in majority of countries and advantages like simple, faster and flexible has forced the organization to change their transnational strategies to become cost effective.     Mark as Read RE: Strategies of International Business Jenna Shaffer Email this Author 4/3/2013 11:05:38 AM I agree with this post. I think the internet has helped more specific markets to sell things and get more well known. What do you mean by proper balance of both traditional business channels and e-commerce? Can you explain that a little more?   Mark as Read RE: Strategies of International Business Dana Frank Email this Author 4/3/2013 8:48:34 PM I agree Ddungu, that, if nothing else, the Internet has balanced global opportunity between the individual and the mass.  E-commerce can be buying or selling.  Therefore, a large organization such an American grocery store chain, could buy large amounts of product from global sources via e-commerce.  But still, they have to maintain that “hometown” relationship with the community around it.  These days companies are cashing in on claiming that they buy “local”.  This happens a lot in the Food and Beverage Industry.  You still have to have a personal relation ship with your customers.  Primarily the local ones.  More to the point, I will say that companies, big or small, who operate transnationally, have market opportunities 100 times over.  Also, e-commerce will assist in that transnational function, increasing potential to be efficient on a competitive level.   Mark as Read Strategies of International Business Leslie Musialek Email this Author 4/3/2013 5:37:27 PM From what I read it seems that transnational strategy is not a good idea for a company to do. Not many companies have been successful and instead of having cost reductions, they have had cost increases and serious risks. But perhaps it may work when combining it with the e-commerce strategy. If the company was to use the Internet to introduce their products to other countries and see what the results will be then transnational strategy may work along with the e-commerce strategy. But then it all depends on the product being introduced. For example, the projects I work on requires many of the items to be in metric measurements utilizing Australian standards. How much is that going to cost a US company to provide to the country trying to conduct business in? Well of course the US company would need to acquire a manufacturing company to be able to sell such products with such standards. There is a lot to consider and may be too risky unless the company already has suppliers that follow these standards and others.     Mark as Read RE: Strategies of International Business Ermira McCaskey Email this Author 4/6/2013 1:34:41 PM Modified:4/6/2013 1:38 PM I would say a transnational strategy is a hard strategy to implement, but not impossible, or for every business. But once is in place, I think could be a very good strategy. It is important first in a transnational strategy to carefully decide which countries to enter.  In my opinion,It would help to enter in a country first  that somehow you know the culture or customers preferences, or at least learn about its culture. . It doesn’t hurt to have connection with companies or consultant in that country either. Like Hill says in the opening case of Avon Products  “It didn’t hurt that Jung, a Chinese-American who speaks Mandarin, was instrumental in persuading Chinese authorities to rescind the ban on direct sales, allowing Avon to recruit 400,000 new representatives in China. (Hill 380)   Mark as Read e-commerce impact Daniel Amason Email this Author 4/3/2013 7:00:06 PM e commerce definitely impacts and changes the choice of using transnational business strategies. through the use of e-commerce business have been able to set up online stores or virtual storefronts, create easy B2B purchasing, and the increase of communications via e-mail, and video conferencing. the increase in e commerce has made the expansion of global business seam effortless. transnational business is a necessary global strategy still, however e commerce is the reason why global expansion has moved so fast.     Mark as Read RE: e-commerce impact Shirley Hollins Email this Author 4/6/2013 7:41:19 PM I’m grateful for the advancement that e-commerce has allowed us to have in business and our personal affairs.  However, more and more fraudulent businesses are popping up in domestic and foreign companies, especially over the internet.     Mark as Read RE: e-commerce impact Leslie Musialek Email this Author 4/7/2013 10:47:10 AM Agree, there are times that I am not able to get to the store because either my week is too busy or something else has come up. I like to be able to order online and have it delivered or I can pick it up on my way home from work or while running errands. I am safer staying with companies I already know though. There are many “fake” stores online and that kind of scares me. I also know of people who starts their business online and they see how it goes before opening an actual store front somewhere. I also like to shop on Amazon but I check first who the seller is. There is another website that I often use to buy phones and other used things, cant remember the name right now, but I also check to see who the seller is as well.     Mark as Read RE: e-commerce impact Shirley Hollins Email this Author 4/7/2013 11:16:12 AM About two years ago I purchased a computer from Dell online. One month later a lady called me about a glitch in my new computer. And that’s what made it believable, because I HAD just got the computer, so I thought who would know that but Dell? The lady talked me through a few steps to fix my supposedly flawed computer. Needless to say once I followed those steps my computer froze and she took control of my computer and stole all of my personal info including my checking accounts. I looked at the caller ID so I could call them back but the number was 1234567890. Just imagine how dumb I felt. Two days later my account started coming up short.   Mark as Read Transnational strategy Lazara Cuza Email this Author 4/3/2013 7:16:17 PM What Is a Transnational Business Strategy? by Chirantan Basu, Demand Media A transnational business conducts operations in several countries with varying degrees of coordination and integration of strategy and operations, according to Newcastle Business School professor George Stonehouse and his colleagues. A transnational strategy combines global reach, coordination of operations and leveraging unique advantages of local markets to drive sales, market share and profit growth. Transnational strategy involves operating in different world markets, designing responsive organizational structures and establishing value-added activities that exploit national similarities and differences. Stonehouse defines transnational strategic management as iterations of organizational learning and performance improvements. The foundation of a transnational strategy is a global vision, but with customized implementations for local markets and regions.

http://smallbusiness.chron.com/transnational-business-strategy-20950.html     Mark as Unread regional economic integration & multinational agreements Professor Hamilton Email this Author 4/3/2013 10:09:06 PM Regional economic integration and multinational agreements in place help companies in pursuing and developing a transnational strategy. Do you agree with this statement? Why? Why not?     Mark as Read RE: regional economic integration & multinational agreements Allen Partlow Email this Author 4/3/2013 11:25:11 PM A transnational strategy is necessary when the need for local responsiveness and cost pressures are highest. Regional economic integration and multinational agreements reduce trade barriers and obsticles by operating in other countries. Perhaps it would make more sense to go with a different strategy(other than transnational) if the pressures are lower. 


REF:

Lecture notes (Week 5) Global and Transnational Business: Strategy and Management  By George Stonehouse, David Campbell, Jim Hamill, Tony Purdie
http://books.google.com/books?id=tA1bYJ8FIzIC&lpg=PA192&ots=t74rTKb_16&dq=transnational%20strategy%20example&pg=PA191#v=onepage&q=transnational%20strategy%20example&f=false     Mark as Read RE: regional economic integration & multinational agreements Tiffany Knight Email this Author 4/4/2013 8:26:18 AM I agree with this statement because the aim of regional economic integration is to reduce cost for consumers and producers and to increase trade between countries involved in the agreement. Many transnational companies enter into strategic alliances with suppliers and business partners which bring to the firm specialized competencies, relatively stable, and sophisticated market outlets that help in honing its products and services or stable and flexible supply sources.

http://www.umsl.edu/~joshik/msis480/chapt18.htm     Mark as Read RE: regional economic integration & multinational agreements Laura Hatfield Email this Author 4/4/2013 9:07:04 AM Economic integration is the unification of economic policies between different states through the partial or full abolition of tariff and non-tariff restrictions on trade taking place among them prior to their integration. This is meant in turn to lead to lower prices for distributors and consumers with the goal of increasing the combined economic productivity of the states. The trade stimulation effects intended by means of economic integration are part of the contemporary economic Therory of the second best: where, in theory, the best option is free trade, with free competitionand no trade barriers whatsoever. Free trade is treated as an idealistic option, and although realized within certain developed states, economic integration has been thought of as the “second best” option for global trade where barriers to full free trade exist.

http://en.wikipedia.org/wiki/Economic_integration   Mark as Read RE: regional economic integration & multinational agreements Ermira McCaskey Email this Author 4/4/2013 10:36:25 AM Modified:4/4/2013 10:36 AM I have to agree that Regional economic integration and multinational agreements help companies in developing a transnational strategy, because as Allen and Tiffany are stating both Regional economic integration and multinational agreements reduce trade barriers and obstacles which facilitate firms operating strategy in other countries, but my concern is how a firm thrives when doing business between different regions knowing that each regional has its own tariffs and regulation? How is this helping a firm to pursue transnationl strategy? And if the competition between regions would increase, than this will put the firms in postion where they should consider their transnationl strategy. Am I right?     Mark as Read RE: regional economic integration & multinational agreements Bethuel Toroitich Email this Author 4/4/2013 10:44:32 PM I agree with all of you guys that regional integration and agreement are good for transnational strategy in order to help companies because it help in the maximization of economic of scale between different countries with little or no cost, this is possible because each country can move its production of products to those countries where labor is cheap and the market is there in order to increase it profit margin by cutting overhead cost,labor, transportation and distribution.      Mark as Read RE: regional economic integration & multinational agreements Tawana Robinson Email this Author 4/7/2013 3:53:59 PM Regional economic integration and multinational agreements do help companies to be better able to implement a transnational strategy.  The benefits of a transnational strategy include trying to achieve low costs through location economies, economies of scale, and learning effects (Hill, 2012 p.404).  Another benefit is that companies can differentiate their products across the various global markets in order to account for any local differences; and to create “a multidirectional flow of skills between the different subsidiaries in their global network of operations” (Hill, 2012 p.404).  The potential risks associated with utilizing a transnational strategy are that the strategy is not an easy one to pursue since it places conflicting demands on the company namely in the area of costs.  By differentiating the product in order to respond to local demands in different global markets this strategy actually raises costs, which is counterintuitive to the overall goal of reducing costs.   Mark as Unread RE: regional economic integration & multinational agreements Professor Hamilton Email this Author 4/5/2013 7:49:48 PM Allen, in that case, perhaps international or global strategies would work depending on the pressures for low costs.  Check out this back-of-the-envelope sketch.   Pressures-Low Cost-Local Adaptation.PDF   Mark as Read RE: regional economic integration & multinational agreements Allen Partlow Email this Author 4/6/2013 5:05:44 PM Very nice sketch! This is a slightly more informative version of what is available in the week 5 lecture. Maximizing 

While looking at this chart I was wondering what the average size of corporations are that employ global and transnational business strategies. Does this really apply to smaller business or is this something that is only for the big boys? This information has been difficult to find.
REF:
Pressures-Low Cost-Local Adaptation.PDF

For anyone who is interested I found a very nice free textbook online on this subject. Very indepth. 

http://khurrambukhari.files.wordpress.com/2012/02/qbzovtkwdy.pdf   Mark as Read RE: regional economic integration & multinational agreements Sean Mccauley Email this Author 4/4/2013 6:21:26 PM Regional economic integration and multinational agreements help companies pursue and develop transnational strategies given that once a firm has been able to establish themselves in some way in foreign markets, the ability to become operational in multiple countries is realized.  A firm initiates growth and development in foreign markets for the sole reason of increasing profitability.  Once they do become established, firms are then able to evaluate the situational aspects and make decisions on where to continue to develop as well as how each location is able to work cohesively with each other.  Obviously, a business may be able to form a transnational strategy, but the successfulness is based on the company’s ability to diversify and utilize each location to its fullest ability.      Mark as Read RE: regional economic integration & multinational agreements Joe DeLoach Email this Author 4/4/2013 7:31:58 PM Regional economic integration and multinational agreements help companies pursue transnational strategies by eliminating trade barriers and facilitating business  development in multiple foreign markets. I agree with Sean in that the business is responsible for its own strategy and diversification. Understanding and adoption  of business strategy to the uniqueness of the market is the responsibility of the business.     Mark as Unread RE: regional economic integration & multinational agreements Professor Hamilton Email this Author 4/5/2013 7:52:21 PM I can agree with both of you that it is the responsibility of the business to develop the local relationships and develop the business. Would the use of a Export Management Company help? What could they do?     Mark as Read RE: regional economic integration & multinational agreements Alisha Mills Email this Author 4/6/2013 6:00:06 PM An export management company takes the title of the ecommerce website that they are working for. They get the rights for exporting the goods of the company on their behalf. The EMC can use any techniques to sell the products. In return, the company gets commission for every product that they sell for your ecommerce website.

http://www.webdynamic.com.au/glossary/e/export-management-company-emc.html   Mark as Read RE: regional economic integration & multinational agreements Daniel Amason Email this Author 4/6/2013 6:44:53 PM yes i think the help of an exporting management company could definitely help a company pursuing a transnational strategy and/or multinational agreement. there are several reasons why. an export management company has the resources developed already to help a company make the transition right immediately. they have people to be assigned as sales representatives that are familiar with the customs of the importing country. also, the company knows how to market and promote the sales of the goods being imported due to familiarity of the country. the exporting management company also knows all about the transportation routes of the country and the ports as well.     Mark as Read RE: regional economic integration & multinational agreements Allen Partlow Email this Author 4/7/2013 3:17:32 AM The use of an Export Management Company could help, especially if the market you are entering is not one that the organization has specific competencies working with. Hiring an EMC might actually be cheaper (with commission included in the cost) than building and maintaining an effective export department, especially if the EMC specializes in specific markets or industries.

http://www.investorwords.com/7281/export_management_company.html   Mark as Unread RE: regional economic integration & multinational agreements Lazara Cuza Email this Author 4/4/2013 7:24:02 PM Regional economic integration has enabled countries to focus on issues that are relevant to their stage of development as well as encourage trade between neighbors. There are four main types of regional economic integration. Free trade area. This is the most basic form of economic cooperation. Member countries remove all barriers to trade between themselves but are free to independently determine trade policies with nonmember nations. An example is the North American Free Trade Agreement (NAFTA). Customs union. This type provides for economic cooperation as in a free-trade zone. Barriers to trade are removed between member countries. The primary difference from the free trade area is that members agree to treat trade with nonmember countries in a similar manner. The Gulf Cooperation Council (GCC)[212]Cooperation Council for the Arab States of the Gulf website, accessed April 30, 2011, http://www.gcc-sg.org/eng/index.html. is an example. Common market. This type allows for the creation of economically integrated markets between member countries. Trade barriers are removed, as are any restrictions on the movement of labor and capital between member countries. Like customs unions, there is a common trade policy for trade with nonmember nations. The primary advantage to workers is that they no longer need a visa or work permit to work in another member country of a common market. An example is the Common Market for Eastern and Southern Africa (COMESA).[213]Common Market for Eastern and Southern Africa website, accessed April 30, 2011, http://www.comesa.int. Economic union. This type is created when countries enter into an economic agreement to remove barriers to trade and adopt common economic policies. An example is the European Union (EU).[214]Europa, the Official Website of the European Union, accessed April 30, 2011, http://europa.eu. In the past decade, there has been an increase in these trading blocs with more than one hundred agreements in place and more in discussion. A trade bloc is basically a free-trade zone, or near-free-trade zone, formed by one or more tax, tariff, and trade agreements between two or more countries. Some trading blocs have resulted in agreements that have been more substantive than others in creating economic cooperation. Of course, there are pros and cons for creating regional agreements. Pros The pros of creating regional agreements include the following: Trade creation. These agreements create more opportunities for countries to trade with one another by removing the barriers to trade and investment. Due to a reduction or removal of tariffs, cooperation results in cheaper prices for consumers in the bloc countries. Studies indicate that regional economic integration significantly contributes to the relatively high growth rates in the less-developed countries. Employment opportunities. By removing restrictions on labor movement, economic integration can help expand job opportunities. Consensus and cooperation. Member nations may find it easier to agree with smaller numbers of countries. Regional understanding and similarities may also facilitate closer political cooperation. Cons The cons involved in creating regional agreements include the following: Trade diversion. The flip side to trade creation is trade diversion. Member countries may trade more with each other than with nonmember nations. This may mean increased trade with a less efficient or more expensive producer because it is in a member country. In this sense, weaker companies can be protected inadvertently with the bloc agreement acting as a trade barrier. In essence, regional agreements have formed new trade barriers with countries outside of the trading bloc. Employment shifts and reductions. Countries may move production to cheaper labor markets in member countries. Similarly, workers may move to gain access to better jobs and wages. Sudden shifts in employment can tax the resources of member countries. Loss of national sovereignty. With each new round of discussions and agreements within a regional bloc, nations may find that they have to give up more of their political and economic rights. In the opening case study, you learned how the economic crisis in Greece is threatening not only the EU in general but also the rights of Greece and other member nations to determine their own domestic economic policies. https://new.edu/resources/regional-economic-integration     Mark as Unread RE: regional economic integration & multinational agreements Professor Hamilton Email this Author 4/5/2013 7:54:53 PM Lazara, that’s a good outline of the buld up of various unions. In your opinion, where does the United States land in these models?     Mark as Read RE: regional economic integration & multinational agreements Aaron Estep Email this Author 4/7/2013 8:52:49 PM The United States seems to be mainly involved with Customs unions.  The Unites States trades pretty freely with countries that it has established agreements with.     Mark as Read RE: regional economic integration & multinational agreements Lazara Cuza Email this Author 4/7/2013 9:53:40 PM I agree with Aaron, the US has free trades with over 20 countries.   Mark as Read RE: regional economic integration & multinational agreements Daniel Amason Email this Author 4/7/2013 9:49:22 PM Im pretty sure the united states falls in the free trade area along with the rest of NAFTA.  NAFTA includes the US Mexico and Canada. this is a great agreement and well use of free trade. all free trade agreements have predefined agreements, including NAFTA. NAFTA basically is the agreement between these countries by which they have agreed to drop all tariffs on trade with each other. however, it is not all goods just a pre-selected bunch. other countries have unions and agreements in which free trade is agreed upon.    Mark as Read RE: regional economic integration & multinational agreements Bethuel Toroitich Email this Author 4/6/2013 5:15:07 PM Thanks Lazara for the good insight on integration but i think the pros and the cons are very relevant and i think the pros out-ways the cons and  business integration is good for each countries economy.   Mark as Read RE: regional economic integration & multinational agreements Maria Zeledon Email this Author 4/5/2013 1:36:06 PM Professor: This got me thinking… Maybe drawn by one of your previous questions, as where in the world we would feel comfortable doing business via licensing. As globalization grows, and many obstacles have been overcome. I feel that there are always going to be some countries that would feel left out of this deal. If you are from the USA, or the EU I believe your statement reflects the truth. However they might be certain companies also that could have some sort of “Preferential Trading Agreement” I think is true depending on where you are coming from, but not everyone is going to feel like they are playing on the same plain field.. Pardon me, but in this class we talk about developed and un-developed countries all the time, as if un-developed countries were inferior… So they may not have such privileges. The moment you are consider a developing country you are immediately less economically powerful, and any decision making is lost… María Lorena     Mark as Read RE: regional economic integration & multinational agreements Larry Romero Email this Author 4/5/2013 7:56:59 PM Maria,

I can’t speak for the rest of the class but as for me I don’t consider the people of any under developed country inferior. For any country to be in a preferential trading agreement they have to bring something to the table. It is not that under developed countries are not allowed to have these”privileges” it is that they may not have anything to offer. To enter into a preferential trade agreement you have to have something to trade. This is global business that we are talking about and I don’t know of any business that is out to lose money. In my eyes no statements have been made in this class that points to under developed countries as being inferior and we can’t change the fact that many under developed countries are less economic clout. The phrase “Nothing personal its just business” applies, especially in a global business class. To answer the question I believe that just the removal of tariffs and trade barriers that comes with regional economic integration and multinational agreements will help companies that are pursing transnational strategies.     Mark as Read RE: regional economic integration & multinational agreements Leslie Musialek Email this Author 4/6/2013 9:10:48 AM I agree with you Larry. People go into business because there is a need for something and for that need people will give something in return. If a company or in this case country, doesn’t have anything to offer or offer something no one wants, there is no business being conducted. I understand what Maria is trying to say but then there are changes that need to happen in order for these countries to have a part of these trades. I really do not know details about it but I understand the mentality behind this. And as you said, nothing personal just business.   Mark as Unread RE: regional economic integration & multinational agreements Professor Hamilton Email this Author 4/5/2013 8:01:49 PM Modified:4/5/2013 8:05 PM Maria… the GATT and eventually the IMF (working with the World Bank) were formed to try to create a balance. As you have seen throughout the discussions in this class, that is not a trivial pursuit. I don’t know that there was any inference of superiority or inferiority in total. I think they were just looking at those countries that were better off financially helping those countries that were not so well off financially. That was the philosophy behind those countries joining the IMF. The suposition here being that access to funds would help an undeveloped or underdeveloped country get on par with the other member countries.   Functions of the IMF and World Bank.pdf Mark as Read RE: regional economic integration & multinational agreements Gloria Armijo Email this Author 4/5/2013 5:38:05 PM Modified:4/5/2013 5:40 PM yes I agree Regional economic integration and multinational agreements in place help companies in pursuing and developing a transnational strategy.  The opening case with GM entering into China.  When it decided to enter into China as regional market it concentrated on manufacturing cars for the Chinese population, smaller,  light weight, fuel efficient SUV a much different version  than it was for the SUV manufactured for U.S. market. Although they ventured into the Asian market they consolidated market strategy to a global standard conveying a similar message that look the same world wide.  The smaller vehicles produced for the China market did well in America as well.

GM executives believed that it was crucial for them to establish a beachhead and to team with SAIC (one of the early leaders in China’s emerging automobile industry) before its global rivals did. The decision to enter a joint venture was not a hard one. Not only did GM lack knowledge and connections in China, but also Chinese government regulations made it all but impossible for a foreign automaker to go it alone in the country. (Hill 417)
Hill, Charles W.L.. Global Business Today, 7th Edition. McGraw-Hill Learning Solutions, 2012. <vbk:0077631471#outline(12.2)>.     Mark as Unread RE: regional economic integration & multinational agreements Professor Hamilton Email this Author 4/5/2013 8:16:42 PM Thanks for pointing out that case, Gloria. That’s a perfect example.     Mark as Read RE: regional economic integration & multinational agreements Gloria Armijo Email this Author 4/6/2013 2:51:26 PM I remember when name brand product were being manufactured and sold at a discount in the U.S. “knock off” .   It seems jto me that many Americans companies are selling themselves short.  In order to produce product at a cheaper price they allow other companies access to their technologies and trade secrets and eventually are squeezed out  by their foreign competitors, who once were they joint alliances partner.

U.S. managers were aiding the Japanese by entering alliances that channel new inventions to Japan and provide a U.S. sales and distribution network for the resulting products. Although such deals may generate short-term profits, so the argument goes, in the long run the result is to “hollow out” U.S. firms, leaving them with no competitive advantage in the global marketplace. (Hill 409)
Hill, Charles W.L.. Global Business Today, 7th Edition. McGraw-Hill Learning Solutions, 2012. <vbk:0077631471#outline(11.8.4)>.   Mark as Read RE: regional economic integration & multinational agreements Aaron Estep Email this Author 4/7/2013 8:57:14 PM That seems to be very common in the auto industry.  Whenever I travel I see models sold by various companies modified for the local markets.  In East Asia (Pakistan and Afghanistan) Toyota makes a very popular small truck that is similar to the Toyota Tacoma but fits their road conditions and economy better, that is called the Hilux.   Mark as Read RE: regional economic integration & multinational agreements Brandy Jazdzewski Email this Author 4/6/2013 8:09:18 PM Yes I agree with this statement.  Having an agreement in place can remove barriers to free trade, reducing regional conflict, and helps with allowing strategy that is amicable.

http://en.wikipedia.org/wiki/Regional_integration     Mark as Read RE: regional economic integration & multinational agreements Dana Frank Email this Author 4/6/2013 9:54:51 PM Responding to Gloria above, are you saying that American companies should practice tighter security when it comes to our technologies and knowledge?  If so, I think this is an interesting concept.   American business should have innate confidence in its abilities to develop better products more efficiently for maximum profitability.  There is, of course, the inevitable issue of purchasing raw materials at lower costs in foreign markets.  But when it comes to production, we SHOULD invent and corner the market in those inventions.       Mark as Read RE: regional economic integration & multinational agreements Sean Mccauley Email this Author 4/7/2013 11:16:51 AM Dana, I agree that we as a country should be confident enough to produce the best and most advance types of technologies.  We have by large, been know as that country from the rest of the world given our innovations and experience.  I do think that we have begun to lose this aura though in recent years.  Countries have begun to close the gap in some respects and are able to  make strides to produce certain types of technologically advance products we have not.  For this reason, I believe that America’s companies should absolutely be mindful of the current global condition and understand that we do need to ensure that our advancements are “kept behind closed doors” if you will.  The less possibility for our technology to be stolen or utilized by foreign competition, the better opportunities we have to maintain our global dominance.   Mark as Unread RE: regional economic integration & multinational agreements Ddungu Wasswa Email this Author 4/7/2013 3:03:48 PM Yes, for sure the regional economic integration helps the companies from across different nations in developing a transnational strategy. Regional economic integration helps breaking the barriers to trade and investment for the nations involved. Thus the companies in these nations have a wider and bigger market to play a role in. They need to control and govern their financial and operational policies by keeping in mind the integrated economy. This helps them in having a strategy that will work across the boundaries of the nations. For e.g. having a regional economic integration can allow the company to think of the best possible location for its units within the integrated region. In fact regional economic integration and multinational agreements could be an important force driving the location of the multinational firms.     Mark as Read RE: regional economic integration & multinational agreements Dana Frank Email this Author 4/7/2013 8:14:40 PM The benefits of earned trade and global development are a direct result of regional economic integration.  Modern technology has been the driving force in the advancing regional economic integration.  Specifically the areas of technology that promote the most change in integration are construction, transportation, telecommunication, production and computers.  I agree, that the increasing release of tariffs and trade barriers calls for a controlled strategy to ensure that expansion is for the unique benefit of the company and not just a random expansion “just because we can.”   Mark as Read RE: regional economic integration & multinational agreements Fannie Cameron Email this Author 4/7/2013 11:07:14 PM A primary economic rationale for globalization is reducing barriers to trade for the enrichment of all societies. The greater good would be served by leveraging comparative advantages for production and trade that are impeded by regulatory barriers between sovereignty entities. In other words, the betterment of societies through free trade for everyone is possible as long as each one has the freedom to produce with a comparative advantage and engage in exchanges with others.     Mark as Read 1 Rondey Bryant Email this Author 4/7/2013 10:57:24 AM 1     Mark as Read Summary Professor Hamilton Email this Author 4/7/2013 9:31:12 PM This week we had some great conversations about basic principles of strategy and the various ways in which firms can profit from global expansion. For most firms, the premium goal is maximizing profitability by focusing on those products and activities that create value. We discussed that it may pay a firm to base that value creation at a certain location where factor conditions are most conducive to the perfromance of that activity. Later in the discussion, we talked about multinational companies that create additional value by identifying skills created within its foreign subsidiaries and leveraging those skills within its globnal network of operations. We also considered that the best strategy might be keeping the costs of production and operations low. This is common for commodity-based products where price is the main competitive weapon. We contrasted detailed sdtrategies by discussing international strategies where the firm transfers the skills and products deerieved from distinctive competencies, with multidomestic strategies, where the firm customizes the product offering, with global strategies, where the firm focuses on cost reductions that come from experience curve effects and location economies, with transnational strategies, where a company focuses on simultaneously reducing costs and boosting local responsiveness.   

Bottom of Form