Core Business and International Strategic Frameworks

Marketing Strategy

Deals with pricing, selling, and distributing a product.

Market Development

A company or business unit can:

• Capture a larger share of an existing market for current products through market saturation and market penetration.
• Develop new uses and/or markets for current products.

Operations and Financial Strategy

Financial strategy examines the financial implications of corporate and business-level strategic options and identifies the best financial course of action. The management of dividends and stock price is an important part of a corporation’s financial strategy.

Purchasing Strategy

Deals with obtaining raw materials, parts, and supplies needed to perform the operations function, including:

• Multiple sourcing
• Sole sourcing
• Parallel sourcing

R&D Strategy

Deals with product and process innovation and improvement. It also addresses the appropriate mix of different types of R&D and the question of how new technology should be accessed.

Promotional Strategies

• Pull Strategy: Advertising to “pull” products through the distribution channels.
• Push Strategy: Spending a large amount of money on trade promotion to gain or hold shelf space in retail outlets.

Pricing Strategies

• Penetration Pricing: Attempts to hasten market development and offers the pioneer the opportunity to use the experience curve to gain market share with a low price and then dominate the industry.
• Skim Pricing: Offers the opportunity to “skim the cream” from the top of the demand curve with a high price while the product is novel and competitors are few.
• Loss-leader Pricing: Setting prices low to attract customers.

Technological Positioning

• Technological Leader: Pioneering an innovation.
• Technological Follower: Imitating the products of competitors.

International Business Strategy

MNC (Multinational Corporation): A highly developed international company with deep involvement throughout the world, plus a worldwide perspective in its management and decision-making.

Strategic Fit for Alliances

• Partners must agree on fundamental values and have a shared vision about the potential for joint value creation.
• Alliance strategy must be derived from business, corporate, and functional strategy.
• The alliance must be important to both partners, especially to top management.
• Partners must be mutually dependent for achieving clear and realistic objectives.

International Entry Strategies

• Exporting: Shipping goods produced in the company’s home country to other countries for marketing.
• Licensing: The licensing firm grants rights to another firm in the host country to produce and/or sell a product; the licensee pays compensation to the licensing firm in return for technical and sometimes marketing expertise.
• Franchising
• Joint Venture
• Acquisition
• Green-field Development
• Product Sharing
• Turnkey Operations
• Build, Operate, Transfer (BOT) Concept
• Management Contracts