Strategic Management in an International Context Assignment Sample 2024

Introduction

In the context of internationalisation, the current report will focus on the strategic management of Automata technologies which has a major influence on the company’s growth and innovation. Furthermore, the contents of the report will include strategic options which are available for the company’s market expansion and one of the major strategic options for the company includes international expansion. Based on the company’s overall positioning the report will explore strategic options in terms of diversification, international expansion and company innovation. Furthermore, the report will include information related to the resources and risks of Automata technologies in terms of the provided strategic options in the international context. Automata Technologies is currently operational with 150 employees with an annual turnover of $31.5 million and the company’s funding amount is currently $40 million (‌Zoominfo, 2024). 

Main report – 3 strategies

• International expansion

The major purpose of Automata technologies may be defined through the company’s mission to empower scientists by manufacturing automation reality for every lab across the globe (Automata, 2024). Internationalisation commitment may be analysed through market drivers such as the development of new relationships and access to new markets which fosters growth (Zahoor and Lew, 2022). Furthermore, cost drivers such as scale economies and opportunities for reduced transactions have a major impact on the strategy of internationalisation. Arguably, competitive drivers such as interdependence among countries and global competitive strategies have a major impact on international expansion while fostering competitive advantage. Government drivers such as attractive trade policies and raising technical standards foster the company’s intention to expand its market on a global forum. The size of the global automation market reached 175 dollars in 2020 and the compound annual growth rate of the market is expected to grow by 9% in 2025 (Statista, 2024).

Figure 1: Global Industrial Automation Market 

(Source: Statista, 2024)

Pros

The implementation of merger and acquisition as a strategic decision impacts the strategic mechanism of the company which is directly proportional to the performance measures (Angwin et al., 2022). Furthermore, international expansion is crucial for the company to satisfy its aim of fostering innovation and grasping innovative market opportunities.

Cons

The cons associated with the merger and acquisition is that it is time-consuming within the current market scenario. Furthermore, strategic options in terms of the application of strategic alliances enable the organisation to foster its competency regarding resources while reducing variance in the economic streams (Angwin et al., 2022). However, the implementation of strategic alliances has cons as well apart from the mentioned pros which may impact the strategic management of the Automata technologies due to increased communication gap, conflicts or differences in work ethics and culture. 

Most desired scenario

The company aims to enable and explore new market opportunities to foster the company’s innovation for which the key driver of international expansion. The economic growth rate identified within the automation industry is a favourable condition for Automata Technologies to apply merger and acquisition as a strategy to foster its innovation and thereby ensure competitive advantage.

Most threatening scenario

The issues of incorporating strategic alliance may be identified in terms of behavioural issues such as conflict and tension which may impact the strategic decision-making process within the company (‌Ryan et al., 2022), which will threaten the advantageous position of the company.

• Diversification

The implementation of a diversification strategy has a major impact on Automata Technologies’ business portfolio and the enhancement of stakeholder expectations within the organisation. The incorporation of a diversification strategy is associated with better product quality which enables the company to diversify its revenue resources which impacts asset tangibility (Duho et al., 2023). Furthermore, the diversification strategy has a major impact on the expectations of the company stakeholders since the strategy impacts a diverse portfolio for the organisation which enhances the company’s market development. 

Pros 

Based on the purpose of Automata technologies the expectations of the company’s stakeholders may be identified in terms of consistency from the company and fostering innovation in valuable lab space (Automata, 2024). Furthermore, the company culture of automata technologies is based on innovation and automation and the incorporation of a diversification strategy has a major impact on the strategic management. The incorporation of a diversification strategy is equivalent to the attainment of legitimacy in the eyes of the local stakeholders which reduces market uncertainty in the host country (Juergensen et al., 2022).Furthermore, in favour of the incorporation of a diversification strategy, it may be argued that the gathered knowledge through diverse market expansion may impact the innovation process of automata technology.The implementation of organic growth implies that companies need to develop resources and capabilities through self-financing and by gaining larger market shares (Holtström, 2022). The major benefit of incorporating organic growth includes a lower degree of dependency on others since acquisitions take longer time to process. Furthermore, it enhances efficiency in production while increasing input resources enhancing the company’s growth within the international market while fostering the overall strategy.

Cons 

Considering the diverse portfolio of the organisation it is safe to mention that diversification impacts innovation, however, diversification may not always guarantee international success. Issues related to legal platforms, data uncertainty, liability and other issues impact the market portfolio of the company which impacts the firm’s strategy (Jia and Kenney, 2022). The issues may be overcome through various strategic implementations while fostering the market growth of the company and also impacting the company’s overall product portfolio.

Most desired scenario 

Furthermore, Automata technologies need to focus more on the diversified strategy to enhance its business portfolio and enhance market competitiveness among clients while fostering its branding strategy which may be achieved by organic development along with harnessing of innovation. Strategic management also has a major influence on the company’s culture which positively impacts the expectations of the overall product portfolio and thereby increases the possibility of international expansion. 

Most threatening scenario 

The incorporation of an organic growth strategy has a major impact on the creation of a value-based network which directly impacts Automata technologies’ market combativeness. However, issues associated with industrial changes may overshadow the pros of organic strategy and adversely impact the company’s overall strategic options within the international market.

• Strategic alliance

Pros 

One of the major benefits of a strategic alliance is that through this method the business will have the potential to work independently in an international market and earn new customers which will be highly beneficial for them to create a bigger network of customers who will remain with them for the long run. According to research, because of the kind of potential this type of strategy method holds, the prospect of strategic alliance has been notable in many industries as companies operating within various landscapes have formed these types of alliances to bring competitive advantages as the notion of firm-level competition has changed and transformed into group-level competitive race (Seo, 2020). From the evaluation, it is to be stated that the chosen automobile corporation will benefit greatly through the means of a strategic alliance to expand internationally because in many countries small and medium-sized enterprises have dived into this mode to strategically expand. The reason for this kind of alliance is that the small and medium-sized enterprises play crucial roles in the social and economic developments of markets and benefit their home and host nations greatly which makes them highly lucrative for large corporations which further results in strategic alliances or joint venture (Drewniak and Karaszewski, 2020). 

Cons 

However, the adaptation of this method might also have certain limitations that could be proven to be fatal for the business venture and one of the main challenges of the same is the kind of communication problems that companies might face due to the language barrier. Multinational corporations have been known to face challenges to contact cross-border business because of communication challenges and the difficulty to comprehend the language of other groups and one of the main solutions for that is to introduce a common working language across the corporations (Wang et al., 2020). On the other hand, potential chances for a corporation to earn unequal benefits through the means of a strategic alliance is also present As the revenue increase of the chosen corporation might decrease while the other company with whom they have entered the alliance could enhance their strategy gained by improving sales of products and better revenue. It has also been established by research that even though the idea of strategic alliance has become extremely common and one of the most truthful approaches to entering an international market, businesses might also experience a certain amount of risk that could diminish the success of the venture (Shijakuet al., 2020). 

Most desired scenario

Innovation might be one of the main determinants for the company to expand internationally as innovative measures will allow them to become more successful within a global competitive race and gain competitive advantages. Research has mentioned that the facilitation of innovation is one of the primary elements of ensuring that a brand is capable of implementing unique ideas in the business operation and it would allow the same to gain more success in the long run by remaining ahead of its competitors (Distanont, 2020). The company could adopt the strategic expansion method of strategic alliance which will allow the same to enter a joint venture with another Corporation that might have been working and operating within the domestic market of the host country. It has been established by research that in the current age which has been given by the emergence of innovation and specifically because of the landscape of digitalisation the prospect of strategic alliance has become even more imperative as it allows businesses to share resources and gain more expertise (Dhaundiyal and Coughlan, 2020). 

Recommendations

From the above evaluation it has come to light that the chosen corporation has adopted the goal of strategically expanding to different international markets for better business prospects and opportunities and certain strategies have been recommended for them, however, the majority of them have certain limitations that have to be taken into account. For example, before entering into any partnership or alliance to move the business towards an international market The company must be extremely dedicated to gathering as much information as possible regarding the local market and its people along with the kind of requirements they have and decide whether or not the company must adapt or keep it standardised services for the new demography. According to research, one of the main determinants of success within the domain of international business is that a company must tailor its products and services according to the needs of the local people which will allow them to capture a broader market and gain competitive advantages successfully (Sheng et al., 2022).  

Apart from that another recommendation for the company is that it successfully conducts a significantly robust competitor research and analysis which will allow the corporation to determine the kind of competition it will face within an international market and countries that have higher competition might not be beneficial for the chosen corporation as they could face difficulties to establish a successful venture in the given market. Research has also confirmed that the prospect of competitor and market analysis is highly imperative for a business to succeed in a different market as it allows it to acquire knowledge about its potential rivals and how to beat them with unique strategies (Grant, 2021). Lastly, having a strong workforce and human resource capability is another recommended approach for the business and also training them successfully might further help the corporation to ensure that the business operations within the international market are conducted flexibly. 

Conclusion

In conclusion, it is to be stated that the idea of strategic expansion is extremely relevant in the contemporary business era because it allows corporations to gain opportunities for conducting more successful business. In that context, several strategic expansion ideas have been recommended in this report in relevance to the chosen corporation and how they will benefit adequately by adapting the strategies to enter the market of a different country. However, along with discussing the benefits the limitations of each of the recommended approaches have also been addressed to create a more critical analysis of the same and these have to be taken into account before the company finally decides on a specific approach it wants to adopt for international expansion. 

References

Angwin, D.N., Urs, U., Appadu, N., Thanos, I.C., Vourloumis, S. and Kastanakis, M.N., 2022. Does merger & acquisition (M&A) strategy matter? A contingency perspective. European Management Journal, 40(6), pp.847-856.

Automata, 2024 https://automata.tech/about-us/.

Dhaundiyal, M. and Coughlan, J., 2020. Understanding strategic alliance life cycle: a 30 year literature review of leading management journals. Business: Theory and Practice, 21(2), pp.519-530.

Distanont, A., 2020. The role of innovation in creating a competitive advantage. Kasetsart Journal of Social Sciences, 41(1), pp.15-21.

Drewniak, R. and Karaszewski, R., 2020. Diffusion of knowledge in strategic alliance: empirical evidence. International Entrepreneurship and Management Journal, 16(2), pp.387-416.

Duho, K.C.T., Duho, D.M. and Forson, J.A., 2023. Impact of income diversification strategy on credit risk and market risk among microfinance institutions. Journal of Economic and Administrative Sciences, 39(2), pp.523-546.‌

Grant, R.M., 2021. Contemporary strategy analysis. John Wiley & Sons.

Holtström, J., 2022. Business model innovation under strategic transformation. Technology Analysis & Strategic Management, 34(5), pp.550-562.

Jia, K. and Kenney, M., 2022. The Chinese platform business group: an alternative to the Silicon Valley model?. Journal of Chinese governance, 7(1), pp.58-80.

Juergensen, J.J., Narula, R. and Surdu, I., 2022. A systematic review of the relationship between international diversification and innovation: A firm-level perspective. International business review, 31(2), p.101955.

‌Ryan-Charleton, T., Gnyawali, D.R. and Oliveira, N., 2022. Strategic alliance outcomes: Consolidation and new directions. Academy of Management Annals, 16(2), pp.719-758.

Seo, G.H., 2020. Competitive advantages of international airline alliances: a critical review. HOLISTICA–Journal of Business and Public Administration, 11(1), pp.139-145.

Sheng, H., Feng, T., Chen, L. and Chu, D., 2022. Operational coordination and mass customization capability: the double-edged sword effect of customer need diversity. The international journal of logistics management, 33(1), pp.289-310.

Shijaku, E., Larraza-Kintana, M. and Urtasun-Alonso, A., 2020. Network centrality and organizational aspirations: A behavioral interaction in the context of international strategic alliances. Journal of International Business Studies, 51, pp.813-828.

Statista, 2024 https://www.statista.com/statistics/1219772/industrial-automation-market-size-worldwide/#:~:text=The%20size%20of%20the%20global.

Wang, Q., Clegg, J., Gajewska-De Mattos, H. and Buckley, P., 2020. The role of emotions in intercultural business communication: Language standardization in the context of international knowledge transfer. Journal of World Business, 55(6), p.100973.

Zahoor, N. and Lew, Y.K., 2022. The drivers of the post-entry internationalisation commitment of small and medium-sized enterprises. International Small Business Journal, 40(4), pp.477-506.

‌Zoominfo, 2024  https://www.zoominfo.com/c/automata/452878623 (Accessed: 19 April 2024).