What is Strategy?
Before we delve into International Strategy Development, we should make sure we’re on the same page.
There exist many different frameworks that can be used to understand strategy. Each of these frameworks suggest a different definition of Strategy, and no single definition pleases all. However, there seem to exist several areas of agreement as to the nature of strategy (see: Three Models of Strategy, by Ellen Chaffee):
- Strategy is used by companies to deal with their changing environment
- Strategic decisions are important enough to affect the welfare of the company
- Strategies exist on different levels:
- Corporate Strategy (what business should the corporation participate in?)
- Business Strategy (how does the business unit compete in this a business?)
- Realized Strategies can come about as Deliberate Strategies (strategies that have been deliberately conceived) or as Emergent strategies (strategies that emerge during the course of business which are not deliberate).
What framework to use depends on several factors (see: Navigating the Dozens of Different Strategy Options, by Martin Reeves, Knut Haanaes, and Janmejaya Sinha), and is outside the scope of this article.
What is Your Existing Business Strategy?
I would venture to say that a total lack of strategy will lead to random results and quick failure.
Conversely, if your business has been successful over a period of time, it probably applies a strategy, even though the strategy may change over time to reflect the changing business environment.
Whether the company’s strategy was deliberately conceived, or emerged during the course of business, and whether or not the strategy is commonly known among the employees, your company probably applies a business strategy.
Of course, having a business strategy does not mean that you have a winning strategy, and many companies have gone under with what they thought was a winning strategy.
In this article, we do not focus on how your current strategy came about; we simply presume that your company has an existing strategy for your domestic business, and that your strategy is working reasonably well.
It’s well worth to have a look at the strategy you are currently applying as it may very well be different from the strategy that was deliberately put forward.
How to develop an International Strategy?
As mentioned earlier, strategy concerns itself with the business and the environment in which it operates. Strategy drives the wellbeing of the business.
To be successful in your International venture it woud be best to develop an International Strategy. Obviously, your International Strategy should be based on the international environment. Most probably, this new environment has many unknowns, and it may be very expensive and time consuming to learn about the environment before you commit..
In a circumstance where your knowledge of the environment is reduced, and where you do not have access to unlimited resources it may be best to develop a deliberate experimental strategy, realizing that the strategy will have to be adapted or replaced, as the organization develops a more intimate understanding of the environment.
As your International Strategy will need to evolve, we need to ensure that your organization can identify the proper inputs, and that those inputs result in timely, actionable adjustments to the strategy. We quote from: (Is Yours a Learning Organization, David A. Garvin, Amy C. Edmondson, Francesca Gino, HBR 2008)
- Three broad factors that are essential for organizational learning and adaptability: a supportive learning environment, concrete learning processes and practices, and leadership behavior that provides reinforcement.
- Managers need to be especially sensitive to local cultures of learning, which can vary widely across units.
The reference to culture is especially important in relation to the international nature of your business.
The Entrepreneurial Company
In an entrepreneurial company, strategy is typically ensconced into the entrepreneur’s vision of the company’s future. The entrepreneur’s vision is both deliberate and emergent and can easily be communicated throughout the organization.
The entrepreneur needs to be closely involved in the international business so as to conceive of an appropriate strategic vision, while not getting so enmeshed that strategic perspective is lost.