Question

Success of a company investing and operating in a foreign country depends on the competitive advantage of the company. The entry strategy of a company in a foreign country could be technology based, quality based, or cost based. Explain what each strategy means in your own words.

2. In a knowledge economy, knowledge is the intensive factor of production. Comparing China and America, which country do you think has competitive advantage in a knowledge economy, China or America? Explain and justify your answer.

Answer 1

1.

There are different ways or approach that can drive the company to achieve success in the overseas nations. The first approach is technology based. It means that the company has come up with the technology driven products and services that is unmatched in the market and it creates its own market as a blue ocean strategy. It brings competitive advantage to the company that delivers to the demand of the consumers and it is not yet done by the competitors. So, it brings success.

The second approach is quality based. It involves offering superior quality products and services to the consumers so that it meets or exceeds their expectations. It builds an audience group that is loyal to the company. It can be done by the product differentiation and people like to buy it. It brings competitive advantage and success to the company.

The third approach is cost based. It involved offering lower priced and quality products to those consumers who are price sensitive. There are big masses who are price sensitive in nature. To target these people, this approach is suitable and company can become a household name to achieve success. Besides, it also brings a competitive advantage to the company.

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2.

It is the USA that has competitive advantage. It is justified by the number of patents and IPR being registered in the USA in Comparison to the China. Further, most of the technology driven products are produced in the USA that shows that USA is the superior knowledge economy than that of China.