We've been talking about how organizations conduct their business across borders. And specifically, we've been focusing on internationalization strategy. Now this is an increasingly aspect of business strategy for many organizations. And therefore, it constitutes a potentially key component of a larger more comprehensive strategic analysis. So within the context of understanding the structure of an industry or the specific capabilities of a firm and what the competitors are doing. It's increasingly important for many organizations to consider what sorts of things should they think about when they're contemplating some sort of internationalization strategy. So there have been a number of key ideas that have emerged as we've discussed these things. And let's recap some of those key ideas. So first of all, with increasing globalization, the increase of exports and global business, firms have increasingly internationalized their strategies. So again, this is an important thing, an increasingly important thing for firms to consider as they consider their competitive strategy. Some have argued that the world these days is more flat. In other words, it's easier for organizations to attempt internationalization because of global competition and interconnectivity and technology. There's lots of reasons why it's easier than ever to attempt to compete internationally. But, of course, the opposite perspective suggests that, well, the world can also be a little bit lumpy when you look at it closely. In other words, it might be easy to attempt internationalization, but implementing an international strategy can be difficult. And a lot of times that arises from a primary tension when we're thinking about internationalization. And it involves these two sort of competing ideas, on one hand, global integration. And this is the idea that there are potential scale economies, or efficiencies, to be gained from standardizing your product or service and delivering it all over the world. On the other hand, there's oftentimes an imperative for local responsiveness. It turns out that even though we can attempt an international strategy, all these different locations around the world have slightly different consumer preferences and ways of doing business. And so those local differences can matter a lot in terms of the success of any internationalization strategy. So oftentimes you have to sort of think about these two key ideas, global integration and local responsiveness and what the tension is between those two as you pursue an internationalization strategy. There are other lessons. I think that there a couple of key strategic questions that an organization needs to ask if they want to pursue some type of internationalization strategy. First of all, where should we locate? Where should we compete? The world's a big place, we need to decide what location we should pursue next if we've decided that we want to go to some new foreign location. And then finally, once we've decided that, the second question is, how are we gonna enter that new foreign market? There are a number of different ways to enter a new market, and so we have to think about the way that we're gonna approach it. It's important to remember that, regardless of where you decide to enter, or how you decide to enter that new foreign market, a clear rationale for that strategy should exist. And you should never forget that your real objective is to occupy a valuable, competitive position that allows you to create value for stakeholders now in that new, foreign location. That's the source of competitive advantage. And so you need to never lose sight of that key imperative in strategic management. Finally, as you decide on a new market and now you need to decide how to enter that new foreign market, the how of going about it. Whether you enter that new market through exporting or some sort of strategic alliance or licensing approach. Or whether you approach more of a foreign direct investment all in approach, either through a green field, or through an acquisition approach. All of these modes of entry involve many different pros and cons. Internationalization strategy is a complicated thing to consider. There's a lot of things to keep in mind, but it's a key component, increasingly, of business strategy.
