The primary concern thus far in the text has been with aspects of the larger environment in which international businesses compete. Now, our focus shifts from the environment to the firm itself and, in particular, to the actions managers can take to compete more effectively as an international business. A firm's strategy can be defined as the actions management takes to attain the firm's goals. The main goal of any firm is to maximize profits and thus all activities and strategies should be aligned with that goal. In general, there are two ways in which a firm can improve profitability. One is by engaging in a low-cost strategy which attempts to lower the cost of production at any and all parts of the value creation process. Two, is through a differentiation strategy that attempts to add value to a product or service thus inducing customers to pay more for the product. Figure 11.2 in text gives you a graphic view of this concept although the text does not discuss the two ways specifically as I have done. I have mentioned the value creation process and this represents all the activities of a firm
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