DB - Global Strategy
identify a company founded in the KSA that has expanded internationally.
How did the company extend its competitive advantage from its home market to an international market? Were all of them transferable and replicable, why or why not?
What mode of foreign market entry did the firm adopt, why?
How did the resources and capabilities related to the local market knowledge, distribution, and political and business connections in the international market.
Sample Solution
Company: Saudi Basic Industries Corporation (SABIC)
- Founded:1976 (KSA)
- International Expansion:Over the years, SABIC has established a global presence through acquisitions, joint ventures, and greenfield investments.
- Strong Financial Backing:The Saudi government's financial support allowed for significant investments in research and development, technology, and global expansion.
- Operational Excellence:SABIC developed efficient production processes and a strong focus on quality control, which translated well to international markets.
- Feedstock Advantage:Access to abundant and relatively inexpensive natural gas in KSA provided a cost advantage for some products. (Note: This advantage may not be directly transferable to all products or markets.)
- Government Support:Government support is specific to the KSA and wouldn't be available in the same way internationally.
- Acquisitions:SABIC acquired existing companies in targeted markets to gain immediate access to established production facilities, distribution networks, and market knowledge. (e.g., Huntsman Corporation in the US)
- Joint Ventures:Partnering with local companies allowed SABIC to benefit from local expertise, distribution channels, and navigate political and bureaucratic hurdles. (e.g., joint ventures in China and India)
- Greenfield Investments:Building new production facilities in strategic locations provided greater control over operations but required significant investment and time to establish a presence. (e.g., plants in Europe and Southeast Asia)
- Acquisitions and Joint Ventures:These strategies helped SABIC acquire local market knowledge, distribution networks, and political connections more quickly.
- Developing Local Talent:Investing in training and development of local employees fostered cultural understanding and built trust with local stakeholders.