Our focus shifts from the environment for international businesses to the firm itself and in particular to the actions managers can take to compete more effectively as an international business.
The goal of a firm is to maximize profit. In Chapter 11 you learn that firms can increase their profits in two ways: by adding value to a product so that customers are willing to pay more for it or by lowering the costs. Many firms add value to their products through product differentiation. A good example for this is the auto industry. Each car maker differentiates its cars to capture a certain segment in the market. BMW captures the high end market while Honda and Toyota target middle class. Firms also customize their products based on the tastes and preferences of the customers in different countries to increase the sales volume and revenues. For example, auto companies design different models for different countries: Large SUVs for the US market and compact cars for the Asian and European markets. They also find ways to minimize costs by sharing parts between different models and opening plants in low cost countries.
What other examples can you give for international firms' product differentiation and cost cutting strategies in different markets?
The text book is global Business Today' by Charles Hill,7th edition" or in "8th edition Global Business Today' by Charles Hill".