Question

(International Management) International vs. Domestic Strategy

What do you believe are the key differences in the strategic planning process of international versus purely domestic companies?

Answer 1

Strategic planning is normally a long-term planning which helps the company executives to design and develop products, increase market share and company's revenue. Strategic planning serves as a guiding map for the leaders of the company. By following the strategic plan the leaders take decisions regarding the various activities of the company,like resource allocation, recruitment and employee management, finance and accounting.

Strategic planning in international company is quite different from that of domestic company. Some of the key differences include, the labour in the developing country is less productive than in the developed country. Also if we think about the infrastructure, it is quite improved in developed countries than in developing countries. Another point of difference is diversity in potential markets and investments. In global market the main differences in investments relating to foreign and domestic company is various political and socio-economic pressures. But these issues don't present in local investments in the domestic country.

If the company belongs to only one country then its strategic planning is very simple. It has to cover only domestic customers, but incase of international market it has to cover a wide range of markets in different countries. Only the well settled companies should plan strategies that work in the international market.