This chapter covers the following objectives:

  • The importance of international expansion as a viable diversification strategy.
  • The sources of national advantage; that is, why an industry in a given country is more (or less) successful than the same industry in another country.
  • The motivations (or benefits) and the risks associated with international expansion, including the emerging trend for greater off shoring and outsourcing activity.
  • The two opposing forces – cost reduction and adaptation to local markets – that firms face when entering international markets.
  • The advantages and disadvantages associated with each of the four basic strategies: international, global, multidomestic, and transnational.
  • The difference between regional companies and true global companies.
  • The four basic types of entry strategies and the relative benefits and risks associated with each of them.