Why Internationalise? Competitive Strategies
Companies internationalise their operations for many different reasons, both general and specific. The detail reasons may change over time but the fundamental reason - to strengthen the company's overall competitive position-remains largely unchanged. The decision to internationalise is a major strategic decision. According to Porter, 1985 cited in Dicken, 1992 companies try to achieve a competitive advantage in their particular industry through one of three strategies.
Cost leadership: to be the lowest-cost producer of a good or service.
Differentiation: to be different from competitors in some way or other.
Focus: to apply either of these two strategies on a broad or a narrow front. A narrow front is known as a niche strategy and may apply to a specific geographic market, a particular segment of a production process or a particular type of customer.
Each of these generic competitive strategies applies to all companies regardless of the geographical extent of their operations.