response to 2 discussion posts for strategy planning

Reply to GHAIDA ALDOSARI stc’s Global Expansion COLLAPSE stc’s Global Expansion: A Strategic Analysis of Competitive Advantage Transferability, Foreign Market Entry Mode, and the Role of Local Market Knowledge This discussion centers on Saudi Arabia’s leading telecommunications company, stc, and its meticulously crafted approach to international expansion. We will engage in a critical analysis of how stc has transferred its competitive advantages from the domestic market, the rationale behind their chosen mode of foreign market entry, and the paramount role local market knowledge plays in their international success. Transferring Competitive Advantages: A Balancing Act STC’s domestic dominance can be attributed to several key strengths: • Brand Equity: stc’s established brand recognition within Saudi Arabia serves as a potent foundation of trust that can be strategically leveraged in new international markets. • Technological Prowess: Unwavering investments in cutting-edge technologies provide a significant competitive edge, readily replicable in other markets seeking advanced telecommunications solutions (stc, 2024). • Operational Efficiency: Proven expertise in managing efficient operations translates well to new markets facing similar infrastructure challenges, enabling stc to optimize resource allocation. However, navigating the international landscape necessitates acknowledging the limitations of transferability: • Governmental Backing: The potential advantage of government support enjoyed by stc in Saudi Arabia might not translate seamlessly to international markets, requiring alternative strategies for market penetration. • Regulatory Nuances: Regulatory regimes and licensing requirements exhibit significant variations across borders. stc must demonstrate adaptability to navigate these complexities in each new market (The Importance of Adaptation in Global Expansion, 2024). Choosing the Right Entry Mode: A Multi-Pronged Approach stc appears to have adopted a multifaceted approach to foreign market entry: • Strategic Acquisitions: The acquisition of a stake in Telefonica, a European telecommunications giant, exemplifies a strategic move to gain immediate market access and leverage established infrastructure within a new region. • Potential Joint Ventures: Collaborations with local companies in target markets offer a promising approach. These partnerships can expedite market entry by providing invaluable local knowledge and facilitating navigation of regulatory hurdles (Developing Strategic Partnerships for International Expansion, 2023). • Greenfield Investments: While information on greenfield investments remains limited, the possibility exists. Building new infrastructure in select international markets could offer complete operational control but necessitates substantial upfront investments. The specific mode(s) chosen would be contingent upon factors like target market maturity, the regulatory environment, and stc’s risk tolerance. Local Market Knowledge: The Cornerstone of International Success The acquisition and strategic utilization of local market knowledge are central to stc’s international success story: • Customer Centricity: Tailoring products and services to resonate with the specific needs and preferences of local customers is paramount for capturing market share (stc, 2022). • Regulatory Compliance: A thorough understanding of complex local regulations and licensing requirements ensures smooth operations and avoids potential disruptions (stc, 2022). • Building Relationships: Fostering strong relationships with local partners, government officials, and distributors is instrumental in facilitating market access and overcoming cultural barriers. By prioritizing the acquisition of local market knowledge, stc can effectively adapt its competitive advantages to new environments, ensuring a successful transition into international markets. Repy to MUNIRAH ALQAHTANI The Global Expansion of Herfy Saudi Arabia COLLAPSE Herfy Saudi Company is a leading company in the fast food restaurant sector and the production of bread and pastries. Herfy was able to reach the global level and spread in several countries including Kuwait, Bangladesh, UAE and Egypt. The company was able to compete with major international competitors in the Saudi market, as it benefited from the completeness of its supply chain, as the meat factory and bakery factories supply the restaurants with their needs. This enabled the company to significantly control quality and costs (Abuljadail, 2017).. Herfy’s competitive advantage is a transferable advantage.Herfy has adapted and modified its marketing mix to suit other markets outside the Kingdom. Although Herfy is keen to make the Arab and Gulf design and decor in its restaurants part of the customer experience, at the same time it adjusts its product list according to the preferences of customers in the target markets. Furthermore, Herfy has developed local marketing campaigns targeting customers in each country. For example, Herfy communicates with its customers in Kuwait via the X platform (formerly Twitter) extensively due to the high percentage of Kuwaiti users of this platform, while it communicates with its customers in Egypt via Facebook more for the same reason (Zaraket, 2017).. At the beginning of Herfy’s expansion, the company took the foreign direct investment method, as it first opened its own restaurants in both Kuwait and Bangladesh before expanding to other countries. It was able to open between 20 and 25 restaurants annually. Later, the company rethought its strategy and decided to replace it with a more profitable method. So, Herfy resorted to the franchise system for international expansion (Alnassar, 2017). Therefore, Herfy has granted licences to other parties to open restaurants in its name in the GCC region and Egypt under a franchise system. Herfy Company benefited from a set of resources and capabilities that helped it successfully expand and grow in international markets. Herfy has strong financial resources, which helped finance expansion and development strategies (Zaraket, 2017). Also, Herfy has worked to attract highly qualified and experienced human cadres in the field of food. In addition, Herfy was keen to introduce the latest technological methods in manufacturing and use the latest machines that helped increase the company’s food production (Alnassar, 2017). The company also used technology to improve its operations, including its management and distribution system. It also benefited from its long experience in this sector. Moreover, Herfy has a good reputation in the local and regional market, which has contributed to increasing brand awareness. Herfy succeeded in building a strong network of relationships with companies and government agencies abroad, which helped expand the scope of its business. Research and development is a basic capability for Herfy, as the company’s continuous consumer research to determine their aspirations and develop the company’s services according to the requirements and needs of individuals is the essence of its success (Abuljadail, 2017).. Using these resources and capabilities, Herfy has succeeded in expanding internationally and spreading remarkably. These resources contributed to its understanding of the target markets, building local market knowledge, and understanding the political and commercial conditions that govern the target markets, and thus preparing strategic plans for expansion by preparing financial, human and technological capital together in proportion to the nature of the target market.

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