In this chapter we reviewed basic principles of strategy and the various ways in which firms can profit from global expansion, and we looked at the strategies that firms that compete globally can adopt. The chapter made the following points:

1. A firm's strategy can be defined as the actions that managers take to attain the goals of the firm. For most firms, the preeminent goal is to maximize shareholder value. Maximizing shareholder value requires firms to focus on increasing their profitability and the growth rate of profits over time.
2. International expansion may enable a firm to earn greater returns by transferring the product offerings derived from its core competencies to markets where indigenous competitors lack those product offerings and competencies.
3. Due to national differences, it may pay a firm to base each value creation activity it performs at that location where factor conditions are most conducive to the performance of that activity. We refer to this strategy as focusing on the attainment of location economies.
4. By rapidly building sales volume for a standardized product, international expansion can assist a firm in moving down the experience curve by realizing learning effects and economies of scale.
5. A multinational firm can create additional value by identifying valuable skills created within its foreign subsidiaries and leveraging those skills within its global network of operations.
6. The best strategy for a firm to pursue often depends on a consideration of the pressures for cost reductions and for local responsiveness.
7. Pressures for cost reductions are greatest in industries producing commodity-type products where price is the main competitive weapon.
8. Pressures for local responsiveness arise from differences in consumer tastes and preferences, national infrastructure and traditional practices, distribution channels, and from host-government demands.
9. Firms pursuing an international strategy transfer the products derived from core competencies to foreign markets, while undertaking some limited local customization.
10. Firms pursuing a localization strategy customize their product offering, marketing strategy, and business strategy to national conditions.
11. Firms pursuing a global standardization strategy focus on reaping the cost reductions that come from experience curve effects and location economies.
12. Many industries are now so competitive that firms must adopt a transnational strategy. This involves a simultaneous focus on reducing costs, transferring skills and products, and boosting local responsiveness. Implementing such a strategy may not be easy.