International Business Management

Sources of Attaining Competitive Advantage by a Business Firm

When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Competitive advantages are capabilities that are difficult to replicate or imitate and are non-tradable.

Pitts and Snow define a competitive advantage as “any feature of a business firm that enables it to earn a high return on investment despite counter pressure from competitors.”

A competitive advantage exists when the firm is able to deliver the same benefits as the competitors are but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage).… Read the rest

Abey Francis

The 10-P Framework of Global Strategic Management

The 10-P framework for globalization symbolizes the aspirations and needs of employees and organizations in the new competitive settings. It comes a long way from the initial impetus provided to the subject by Michael Porter in his book Competitive Strategy (1980), and goes beyond his purely industrial organization perspective. The framework operationalizes the 4-Diamonds for a nation’s competitive advantage of Porter. The 10-P framework integrates theory of strategic management and practice of business policy and provides a structure for the practicing manager to evaluate competitiveness at regular intervals.

The 10-P framework explores a fine `fit’ between the soft and hard strategic choices.… Read the rest

Abey Francis

Modes of Entry into International Business with Advantages and Disadvantages

The different types of entry modes, to penetrate a foreign market, arise due to globalization. The latter has drastically changed the way business conduct at international level. Owing to advances in transportation, technology and communications, nowadays practically every business of any size can supply or distribute goods, services, or intellectual property. However, when companies deal with international markets, it is complicated as the companies must be prepared to surmount differences in currency issues, language problems, cultural norms, and legal and regulatory regimes. Only the largest companies have the capital and knowledge to overcome these complications on their own. Many other businesses simply do not have the means to efficiently and affordably deal with all those variables in foreign jurisdictions, without a partner in the host country.… Read the rest

Abey Francis