STRATEGIC CONSIDERATIONS WHILE IINVESTING ABROAD

The four strategic consideration while moving abroad for business are:
First Mover

Follow the Leader

Prevent Rivals Advantage

Adapt the Product

FIRST MOVER
One who moves first may reap larger benefits. One moves into another country with the expectation of gaining specific economic advantages through the first mover strategy.

For example the motive may be the availability of vast natural resources in the host country. By moving first, it will then have those economies before any other competitor has.

FOLLOW THE LEADER

Some companies have a strategy of following the leader firm where ever it goes. The follower may be waiting for the leader to take the risk of plunging in first and learn the lessons in a foreign environment. This is a low risk strategy. Some company follow the leader because the leader company happens to be the buyer of their goods/services. Other reasons for following the leader could be because of the Just-In-Time compulsions.

PREVENT RIVALS ADVANTAGE

This is a defensive strategy.

If one enters a market and makes a mark in it, it becomes that much more difficult for a competitor to establish itself in that market.
The companies that move into a particular foreign market have the economic motives: Seeking markets, resources & efficiencies. For the developing countries, all it needs is to attract one large multinational firm to set up plants.

ADAPT THE PRODUCT

In some competitive situations in the case of certain products/services, it becomes necessary to adapt the product/service to suit the customer preferences. The economic motive for FDI could be to increase ones markets; it is operationalised through the given strategy.