International Strategy and Cooperative Strategy, Essay Example

Part I: International Strategy

Determine why, given the advantages of international diversification, some firms choose not to expand internationally. Provide specific examples to support your response.

International diversification does open up the doors to development of business; however, it also establishes a definite indication of how risks could ruin the overall operation of the organization. This is why some organizations choose to stay within the lines of their limits to avoid the risks and become more effective in determining the overall function of the business within limits especially in relation to the overall concept of keeping the business risks at bay. One example would be the sole-proprietor forms of businesses that are often homegrown and have been taking the same rout of operation of saving the local community for many years and has not taken any plan of expansion at any point

As firms attempt to internationalize, they may be tempted to locate their facilities where business regulation laws are lax. Discuss the advantages and potential risks of such an approach, using specific examples to support your response.

This choice might also put the protection and the position of the organization at a more jeopardizing position as the law does not provide as much protection as needed. Noticeably, this is why the need to become more balanced about this idea is necessary. When not much risk is undergone, not much protection is expected.

Part II: Cooperative Strategy

From an ethical perspective, determine how much information a firm is obliged to tell a potential strategic alliance partner about what it expects to learn from the cooperative arrangement. Explain your rationale.

Cooperation breaks all barriers of hindrances in business. Organizations that are able to embrace expansion and progress accordingly are among those that are able to create a massive form of management that establishes cooperation among members of the business [both on the branches operating within base locations as well as with the branches operating outside the main branch]. Practically, cooperation among participating parties creates a balanced manner of operation that establishes the base-strength of the business even amidst the consideration over the impending challenges of operating overseas and serving a wide range of market. In this case, a hopeful partner needs to take note of the need to divulge distinct information to the prospected partner. Nevertheless, this does not impose giving up vital information that could endanger the standing of the business [especially if the merger-acquisition planned does not push through].

From the e-Activity, determine which type of cooperative strategy would most benefit the two companies you researched. Provide specific examples to support your response.

The cooperative strategy most effective in determining success in what has been researched is the tacit collusion cooperation which suggests the consideration of one organization over the other; indirectly observing their performances in order to establish a more extensive and healthier form of business competition. This has been considered because of the fact that the companies researched are operating on their own but are closely observing each other’s consistent work in the market so as to make sure that they are taking the safest step that could earn them higher profits with lower risks apart from their competitors.

References

Lecture Notes. BUS 499, Week 7: International Strategy.

Lecture Notes. BUS 499, Week 6: Acquisition and Restructuring Strategies

Lecture Notes. BUS 499, Week 8: Cooperative Strategy.

Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 29.

David, P. (2001, 22–23 January). Will Building ‘Good Fences’ Really Make ‘Good Neighbours’. Paper presented at the Science, report to European Commission (DG-Research) STRATA-ETAN workshop on IPR aspects of internal collaborations, Brussels.