International strategy generation implies making a subjective decision based on objective facts. In other words, every company needs to decide what will benefit it as it taps into foreign markets, taking into account factors many of which are unchangeable and unmodifiable. In this sense, a strategy can be defined as a match between a company’s internal resources and external factors (David, 2013). There are numerous approaches to understanding a company’s current position on the market and whether its expansion will be successful and help it achieve its goals. Probably, the most common approach is the so-called SWOT matrix where the abbreviation stands for strengths, weaknesses, opportunities, and threats (Knight & Liesch, 2016). The first half of the matrix takes into account the internal resources of a company: its advantages (strengths) and disadvantages (weaknesses). It could be the quality of the management, presence of qualified cadres, established and smoothly operating logistics, experiences in a certain sector, and other factors.
The second part of the matrix focuses more on international and global considerations. Opportunities are positive external factors that can promote growth and expansion. For instance, for Chipotle, it could be untapped market segments that have a need for the company’s products or its analogues but have not yet been targeted. The market size and dynamics are also informative enough to understand the opportunities of a foreign market. If a certain sector stagnates or shows shrinkage, it might be seen as a threat. Another common type of threat that needs to be considered is new entrants and established players. In North America, Chipotle is a beloved and recognizable brand, but it will have to put in more effort to withstand local competition on foreign markets.
References
David, F.R. (2013). Strategic management concepts: A competitive advantage approach. Pearson.
Knight, G.A. & Liesch, P.W. (2016). Internationalization: From incremental to born global. Journal of World Business, 51(1), 93-102.