What is an Internationalization Strategy?

Cite this article as:"What is an Internationalization Strategy?," in The Business Professor, updated April 27, 2020, last accessed December 4, 2020, https://thebusinessprofessor.com/lesson/what-is-an-internationalization-strategy/.


What is an Internationalization Strategy?

An Internationalization strategy is when an organization seeks to expand to foreign markets. An internationalization strategy can be broken down into the following three strategies:

  • Multi-domestic Strategy – This strategy customizes produce and service offerings to a foreign country. As the name implies, the international company seeks to compete more as a domestic player than as a foreign provider of goods and services. This requires a thorough understanding of the local market, as well as employing local managers and employees.
  • Global Strategy – This strategy offers the same product or service in foreign nations. The idea, however, is to capitalize on economies of scale to have a low-cost structure strategy (low cost of producing and delivering the goods or services).
  • Transnational Strategy – This strategy is a middle-ground between multi-domestic and global strategy. It calls for slight modifications to products or services while still attempting to take advantage of the economies of scale in producing more of the core products.

There are various methods for entering a foreign market, see the following articles:

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