International Business Strategy for master degree Assignment

International Business Strategy for master degree - Assignment Example The Group is now concentrating on fewer investments after the crisis. The new investments have been made in industries with which they are familiar – such as TV stations in Indonesia. They now focus on strengthening the existing business such as the food and the telecom business. His strategy is to maintain a majority stake in crucial group companies so that the giants do not swallow him up. He is a small player and his future strategy is limited by capital availability. His earlier strategy was to be involved in large number of small businesses. Now he does not want to limit to one or two core businesses. The key competence of the group is flexibility and he wants to capitalize on this. He does not want to be a product-based company but would like to use their expertise and capital in any business that is lucrative. He believes that continuous transformation has to take place. He places more emphasis on contacts rather than on capital to achieve success. Cultural orientation However, sustainable competitive advantage can be build upon strengths. He wants to produce in Australia and sell in China. He does not want to follow the strategies common to the western MNEs. However, selling goods and services to long-distance customers can be challenging. These include language and culture barriers and hence it is always advisable to use local partners. They see enormous potential in China but the business environment differs in China. In the case of this group using local partners is all the more important because the culture of China differs from that of Indonesia and the Indonesian values. As pointed out by Hofstede, accepted management style varies across nations (Stonehouse et al, 2004). When expanding outside the triad countries it is better to have a country-by-country approach in the management of government relations and customer interface (Birkinshaw et al, 2003). The group’s intention of acquiring a pig farm in Australia and engaging in wheat t rading activities is to bring the superior knowledge of farming to less developed Asian economies. This does not appear to be a practical approach to expansion. The company would have to embrace societal differences in culture, processes and systems. Group is not strong in technology. Communications are poor and the final decision lies with Anthony Salim. However, they feel that they can be successful in diverse fields such as retail, food and media because what matters is to understand the consumer trends. Knowing the sector and industry is unimportant. Knowing the consumer and consumer behavior is what matters. Lack of environmental analysis They are trying to enter the retail sector but Carrefour had failed when they tried to expand into other countries within Europe. Since their early ventures failed, they started focusing on emerging economies with a growing urban middle class population. Thus, in any sector meeting local cultural preferences is paramount to success. The proces s of globalization is not smooth and the uncertainties have to be coped with. Salim group’s contention, that understanding consumer trends in any sector is more important, is valid to some extent. However, knowing the industry is equally important. Salim Group should conduct PESTEL analysis before they consider venturing into any nation. Understanding the macro environment is the first step while understanding consumer trends comes later. Other tools such as Porter’