The Research Journal
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The research journal of Changing Patterns of International Competition” which wrote by Michael E.Porter has been investigated the meaning of competitive strategy toward domestic competition and international competition. For one to win over the international competition it must consider its industry structure and competitors, tied with the buyer value, diagnose its relative cost position and establish a sustainable competitive advantage within some scope. Most importantly, the text seeks to analyze the connectedness among country competition, which is how a firm in one country affects competitors in other countries. To understand international competition, the author has distinguished two types of industries which have different patterns, multidomestic and international. The characteristics which differs mulitdomestic industry and international industry will decided the suitable competition strategies thus to utilize their advantages. Some more, he stated that when an industry goes globally, it mainly to seek the advantages from low relative cost and/or differentiation. Besides, from the configuration and coordination perspectives, a firm that competes internationally must also decide how to spread the activities in the value chain (upstream and downstream) among countries and choose the effective international strategy based on them. Additionally, globalization created many implications for the firm, and both coalition and organization structure have become more and more important issue to concern in the international competition. As the pattern of international competition changing so rapidly, many firms are failed to operate their business globally, hence it is strongly recommend that understanding international trends before one goes in the international market.
Firm in multidomestic industry operates in many countries while competition occurs on a country-by-country basic. Home base may transfer its know-how to foreign countries, however it is largely determined by condition in each country. The examples could be retailing, consumer package goods, distribution, insurance, consumer finance and caustic chemicals. In contrast, global industry represents firms competitive position in one country influenced by its position in other countries. Industries such as commercial aircraft, TV sets, semiconducts, copiers and automobiles are examples of global industry. The differences between the implications for strategy are quite obvious. In multidomestic industry, firms strategy is determined by condition in country, called as “country-centered strategy”, while firm in global industry may implement “country-centered strategy”, focusing in specific on specific segments when it can carve out a niche by responding to whatever local country differences are present.
When a firm goes to international, it mainly seeks to two advantages, which are low relative cost or differentiation. In authors view, competitive advantages is a function of either providing comparable buyer value to competitors but performing activities efficiently (low cost), or of performing activities at comparable cost but in unique ways that create greater