We're talking about internationalization strategy, and remember, internationalization is simply the potential for a firm or a organization to begin to compete in a foreign marketplace that they haven't in the past. And conversely, it's the potential for foreign competitors to enter our market and compete with us. How easy or how difficult this is that? Why or why not? So, in terms of international strategy, there's a number of ways that firms can approach an internationalization strategy. There's things we need to consider like spillover effects. And is there inter-industry competition that arises? But when we take a step back and think about internationalization, there's really a couple of key questions that an organization really has to confront if they're going to expand internationally. First of all, where should a firm compete? Very simply, if we want to expand and go somewhere, where should we go? And second, how should we compete in each market? And that involves questions about, where are we gonna locate the production? Where are our manufacturing or services gonna be primarily based? We have to think about the degree of adaptation in that local market that's required. Is it the case that we need to really pay attention to local norms, and customs, and preferences of the customers in that location? Or maybe not so much? That will impact the way we compete in these new markets. We need to consider our relationships with other firms. What's our value chain? And who are our key suppliers? And are those suppliers, for instance, gonna be able to supply components to us in this new location? And that depends on a variety of things that we need to consider. And finally, we need to think about the way we might enter that foreign market. Are there different modes of foreign direct investment? Is this just a trade play that we can just simply export to a new customer base in a foreign place? Or do we need to commit some foreign direct investment dollars to really establishing some operations in that new location? So let's focus on the first of those questions for a moment. Where should a firm compete? And the thing is, it's so important to not forget, you cannot forget what's important here at the core. Which is, whether it's a new market, or whether it's our current domestic market, we need to understand what creates a valuable competitive position for us to operate in. And that involves thinking carefully about our values, and our mission, and our purpose. It involves understanding our capabilities, what we're good at, what we understand about the market place and this new potential foreign market. Do we understand how to compete there? We also need to understand what that market opportunity entails. Just like any other effective strategy, just because we're thinking about going international, we need to keep our eye on the ball and understand what is it that's going to allow us to create a valuable, competitive position in that new market. Let's think about this question of where to compete and what sorts of things we need to consider. First of all, quite simply, what market should we enter? And that might depend on the nature of the market opportunity. What does it depend on? What does success there depend on? And secondly, what's our ability to create value in that new market? So we need to make sure we really understand in a detailed and a robust way, what that market opportunity is. And it may turn out that some foreign markets represent a better opportunity for us than others. So, it's a really key question for us to think about. We also need to think about, what are the capabilities required for us to effectively compete in that new market? Do we have those capabilities? Do we have foreign market knowledge? Do we really understand the dynamics of that foreign market? Are all of the things that exist in our current domestic market, are they the same? Or are they different? In which ways are they different? Do buyers or suppliers have greater bargaining powers? They're a greater or lesser threat of substitutes. All these sorts of things we think about when we think about the structure of an industry or market segment. We need to make sure we understand that foreign opportunity. And we also need to think, not just about the industry space that we're operating in, but we need to think about our approach to management. Are our management skills and practices, are they gonna be sufficient for that foreign market? Or instead, will we need to pursue some different approaches to management that are particular to that location? And of course all of this really boils down to, how are we gonna complete with the local competitors in that market and succeed? We better understand what our plan is, for out-competing those local competitors and creating more value for those local customers than the existing firms have been able to do.
