International Business: Strategies, Structures & Alliances. Free Essay

The exchange of goods and services, capital, knowledge, and technology at global and across the national borders is referred to as International Business. Therefore, to conduct the international business, there is a need for the companies which are multinational to have a relationship and bridge different national markets to be a single global marketplace (Buckley, Burton & Mirza 2016).

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Strategies, structure, and alliances available to international business

The international business embraces different strategies, structures and the partnerships that ensure the operations are efficient and effective. There are various strategies that a company which is operating internationally can pursue. The policies depend on the nature of the business and its main objectives. Therefore different type's strategies an international company has included (Buckley, Burton & Mirza 2016).

A global strategy is accompanied by low response and high integration

The multi-domestic strategy encompasses a high response and low integration A transactional strategy which is considered when both the responsiveness and the integration are high

International strategy is dealt with when there are deep integration and responsiveness.

Apart from strategy, the international business has the organizational structure that ensures that all operations are carried out as required. The structure of an organization in an international business varies depending on the nature and size of the business. The structure can be simple involving the top management, decision support, and the operational level. On the other hand, the structure can be more complex involving the directors, managers, board members, shareholders, and employees.

Then lastly every successful international business has a strategic alliance which promotes the covenant between different parties involved to pursue some set goals which are needed to remain as a dependent organization. The parties involved can issue the strategic alliance with the capabilities such as channels of distribution, products, manufacturing resources, knowledge, funding for the project, capital equipment, intellectual property or expertise. Therefore the alliance is viewed as the joined energy which has a more significant benefit to a company as compared to the one which uses individual effort.

Issues and problems associated with finding and selecting successful alliances in IB

There are several issues and problems which are associated with the selecting and finding of the successful partnership in international business. The issues might be companies are different in strength and performance, thus to get a company that is willing to partner might be a problem because the weaker company might fear to come together with a strong one with an assumption that it will be forced to do according to the will of the strong one. Also fear of competition has been an issue while selecting a successful alliance since different companies thinks that a partner may, in turn, become its competitor in the future.

How these activities are different or the same when moving to the international market

When moving to an international market, the same problems that are faced while forming an alliance e are experienced. The reason is that different markets have different strategies and objectives which they use in withstanding the competition in the market. Therefore a need to bring them together to form an international market might be not natural.

Two strategic alliances are available to IB with advantages and disadvantages.

The two types of strategic alliances which are available to an international business include;

Joint venture strategic alliance.

When a parent company establishes a new child company, the joint venture is formed by creating another company which is having both the two parent and the child companies (Picciotto & Mayne 2016).

A strategic equity alliance.

In the case of an equity alliance, it is created mainly when a company purchases some equity percentage of another different company (Picciotto & Mayne 2016).

The advantages of the strategic alliance include;

1. There is a shared risk between the companies involved.
2. The opportunities for growth are embraced.
3. It enhances innovation and creativity.
4. There is easy access to the target market when companies come together.
5. Ensures achievement of the economies of scale.
6. Promotes diversification.
7. There is a reduction of political risks when getting into a new market.
8. There is an exchange of knowledge from different partners.
9. The disadvantages of the strategic alliance include;
10. The profits, skills, and resources are shared equally among the partners.
11. Competition may arise from one partner after benefiting from the alliance and forming a new market segment.
12. There might be difficulties in coordination because of informal cooperation.
13. There is the formation of uneven alliances in a case whereby the companies are not equal.

Recommendations

Based on my analysis of international business alliances, I would recommend that the parent company should select a young company to ally with instead of allying with already existing companies. The reason is that when the new company is joined together with the current company, the capabilities are utilized equally among the two companies because the new one is still learning from the parent company. Considering the existing companies coming together, the challenge always arises because some companies will be laggards leaving others to operate.

References

Buckley, P. J., Burton, F., & Mirza, H. (Eds.). (2016). The strategy and organization of the international business. Springer.

Picciotto, S., & Mayne, R. (Eds.). (2016). Regulating international business: beyond liberalization. Springer.