Strategic planning represents a series of steps — mission, environmental scanning, strategy creation and implementation, and evaluation and control — companies go through at different stages. International strategic planning takes these steps beyond the company’s local or domestic environment. The purpose of this process is to find new avenues for product markets and increasing revenues, with the hopes of higher profits. The steps are typically the same in international strategic planning, though the individual activities may be somewhat different. Owners and executives are the individuals who drive this process.
All companies have mission statements; the statement helps a company describe how it plans to operate and succeed in the market through direct methods. Companies may not have international mission statements. In most cases, it is not necessary to have more than one mission for a business. Owners and executives can create an offshoot, however, that reaches out to international markets. This begins the activities for international strategic planning.
An environmental scan is a formal look at a company’s internal processes and the external factors affecting the business. For international strategic planning, external factors include domestic laws for international trade and the foreign country’s business environment. A few of the most important factors can be laws, regulations, and consumer demand, all in the foreign country. The political stability in foreign countries can also be a concern when companies expand internationally. A government that constantly switches political factions or does not always favor private business provides a dangerous environment.
The preceding review typically dictates how a company develops business strategies and implements them in the foreign market. Not all strategies will be the same, either from the business or in the foreign market into which the company expands. Companies may also need to consider starting small business operations in the foreign country. This direct presence can help the company have eyes and ears for all moves in the country. Foreign workers can help a company succeed by removing cultural barriers.
International strategic planning requires control and evaluation just like any other business operation. Unprofitable foreign operations can create an immense drag on a company’s profits. Low returns on heavy direct investment can also scare off investors, who will move to other more profitable companies. Having a strong strategic planning process can help dissuade investor fear and show that the company has a proper — and profitable — strategy for business expansion.