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Abstract
International business involve transaction across national boundaries as it requires the transfer of goods and services, managerial knowledge, technology and capital to other countries. However, it recognized that the different ways of profiting from global expansion are all linked to the generic business - level strategies of cost leadership and differentiation. To spread this knowledge, the managers involved in an alliance should be used as a resource in familiarizing others within the company about the skills of an alliance partner and finally, the appropriateness of each strategy should depend on the relative strength of pressures for cost reduction, local responsiveness and the global environmental variables.
Key Words: Cost Reduction, Global Expansion, International Business and Strategic Alliance.
INTRODUCTION
International Business involves transactions across national boundaries. These require the transfer of goods, services, technology, managerial knowledge and capital to other countries. While globalization of business means the recognition by organization that business must have a global and not a local focus. (Ile, 2000: 287).
It is important to recognize that the different ways of profiting from global expansion are all linked to the generic business-level strategies of cost leadership and differentiation. Companies that transfer distinctive competencies to other countries are trying to realize greater gains from their low-cost or differentiation based competitive advantage. Companies that attempt to realize location economies are trying to lower their costs and/or increase value added so that they can better differentiate themselves from their competitors. And companies that serve a global market in order to ride more quickly down the experience curve are trying to build a competitive advantage based on low cost (Hill and Jones, 1995:225 - 228).
Phenomenon of globalization consists of three inter-related factors, namely;
i. Proximity
ii. Location, and
iii. Attitude
These three facets of globalization emphasize the unprecedented line up and complexity of relationships that confront a global manager.
These factors are briefly discussed thus (Stoner, J.A.F, Freeman, R.; Edward and Daniel R.G. Jr. 1996:127).
(i)Proximity: First, managers now operate in much closer proximity than ever before to a greater number and range of customers, competitors, suppliers, and government regulators. This proximity, a function of the 'shrinking globe' is partly a matter of time, as today's telecommunications technology allows people around the world to share...