Hospitality

Chapter 8: International Strategy

8.1. Introduction

The 8th chapter of Johnson, Whittington & Scholes (2011), deals with the market development which aims at the operations within different geographical markets. This chapter therefore concerns five main topics with the core theme of International strategy. As it can be seen above, the first concern will be on the internationalization drivers (market demand, potential for cost advantages, government pressure and inducements, responding to competitors). Furthermore, the geographical advantage will be discussed (geographic location of original business, international configuration of their value network) as well as the international strategy. In addition to that, the market selection (which country market to choose) and the entry mode (target country selected, how to enter the chosen market).

International strategy – refers to a range of options for operating outside an organisation’s country of origin

Global strategy – involves high coordination of extensive activities dispersed geographically in many countries around the world

8.2. Internationalization drivers

* Many different general pressures that increase internationalization (internationalization/globalization drivers) = very complex (international trade, investment, migration, communication, etc.)

Therefore, international strategy is in the need of a precise assessment of the certain trends in every single market, as they all are affected differently.

Yip’s globalization framework – sees international strategy potential as determined by market drivers, cost drivers, government drivers and competitive drivers

In the figure below, the important factors for each market driver are statedt:

8.3. Geographic sources of advantage

As stated before, the geographical location of activities can clearly be a source of potential advantage. This is done by improving the value chain and network of an organization by making use of the advantages...