International Business Strategy Report: Case Studies and Analysis

This report delves into international business strategy, examining the plans and policies guiding commercial transactions overseas in the context of globalization. It analyzes two case studies: Global Medical Tourism and Volkswagen's venture in Russia. The Global Medical Tourism case explores how an American company leverages outsourcing to developing countries like India for medical imaging interpretation, impacting costs, workforce gaps, and patient access, while benefiting the American economy through cost savings and time zone advantages. The report also discusses the beneficiaries and potential losers of this strategy. The Volkswagen case examines the company's entry into the Russian market, its Foreign Direct Investment (FDI) influenced by economic growth, and the impact of government incentives and import tariffs. It analyzes the factors influencing Volkswagen's production decisions, the effects of economic downturns (oil price fluctuations), and the company's strategic decision to remain in Russia, highlighting its ethical considerations and long-term business relationships. The report also touches upon the modern theory of FDI and the positive and negative impacts of FDI on the Russian economy, including the impact of oil prices. The conclusion highlights the similarities in the strategies of both companies, focusing on ethical business practices. The report also provides a recommendation for Global Medical Tourism and its potential to expand into developing countries.

Running head: INTERNATIONAL BUSINESS STRATEGY
International Business Strategy
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International Business Strategy
The International Business Strategy refers to the system that guides the commercial
transaction overseas. It is the plans and policies that are done between the countries between the
private companies in order to speculate the business policies, with the goal to achieve increased
profit. With the onset of globalization and the emergence of the concept of free trade among the
countries, it has become increasingly imperative for the companies to undergo such plans and
policies (Verbeke, 2013). The Multi- National companies are of the opinion the critical planning
and policy making are important in order to conduct a sound business process and to achieve the
oriented success and profit. Multinationals such as Walmart and Kia have chosen to follow the
international business strategies to conduct their business across the world and has achieved
great success.
It is said that the international business bodies follow certain business strategies.
The Multidomestic Strategy:
A firm utilizing a multi domestic system penances effectiveness for underlining responsiveness
to neighborhood prerequisites inside every one of its business sectors. As opposed to attempting
to drive the majority of its American-made shows on watchers around the world (Killing, 2013).
For example, MTV helps certain counties like New Zealand, Portugal, India and certain other
countries to manage its business policies.
Global Strategy:
A firm practicing Global Strategy system propitiations responsiveness from the neighborhood
prerequisites in all of its business chains for stressing proficiency. This system is the direct
inverse of a multi household procedure. In some of the sectors the administration and business
processes can be negotiated, however, the global strategy focuses on the need to profit and

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International Business Strategy
supplies almost similar products across the nations with minimal changes to address the needs of
each nation (Killing, 2013). For example, the Microsoft uses the same language system all over
the world but customizes, as per the requirements of the country.
Transnational Strategy:
Firm using a transnational strategy seeks a middle ground between a multidomestic
strategy and a global strategy. Such a firm tries to balance the desire for efficiency with the need
to adjust to local preferences within various countries (Killing, 2013). A perfect example for this
will be the business of McDonalds. They business policies that they undertaken creates a sound
relationship between the Global and Multi Domestic strategies.
On this notion, the case studies of the business strategies of Global Medical Tourism and the
Volkswagen Russia have been illustrated through answering the following questions.
Global Medical Tourism:
The global medical tourism, an American based company, has changed the face of
medical industry and the tourism industry of the country. It is observed that the country has a few
numbers of medical experts and specialists, and especially fewer numbers of radiologists. It is
further observed, that the developing countries are importing the medical tools from America,
and also has a good number of doctors or specialists in these countries, especially, in India, who
do not only have sound knowledge regrading health but also are experienced (Banerjee et al.
2018). Therefore, America is now observed to be, with the help of this organization, sending the
scanned images, as got from the medical tests of the patients, to India, where this comes in cheap
rates and, which satiates the gap in the workforce and also which save some of their time. More
importantly, this particular company has made possible for the population, who have a lower rate

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International Business Strategy
of income, to avail this process as, it saves some money of the people, taking the advantages.
Also, the company enables the patient to make a quick tour of the company. Also, since this
service is availed in the developing countries, many people come to America in order to conduct
the critical surgeries, which again is impacting the economy of the country (Chen & Wilson,
2013).
The benefits provided to the American medical providers based in countries like India.
The global medical tourism enables the American medical providers send the images of
the MRI scans to the Indian medical experts to interpret and they conduct the surgeries based on
the report and also send the patients to avail the surgery in India. This cut their costs, as in India
the cost of a surgery takes around $10,000 whereas, it costs around $60,000 in America
(Pezzuto, 2019).
Is American economy is benefitted?
Yes, the American economy is benefitted from such conducts, as outsourcing in the
developing countries enable the country to cut its costs, and also, as there is a time gap, the
Indian medical providers can interpret the scans at a time when its night ta America and the
medical professionals of America can perform the needed tasks in the morning (Melby et al.,
2016).
Limit of outsourcing.
There is no such limit on the outsourcing, however it depends upon the countries between
which the business is done and also on the kind of business that is done.
The primary beneficiaries. The Losers.

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International Business Strategy
The primary beneficiaries of this program are the inhabitants of the country. The losers
will be the American medical houses, as they will be perceiving lesser number of customers
(Pezzuto, 2019).
Volkswagen in Russia:
During 200, the company Volkswagen, had decided to step into the Russian market and
economy and put some direct investments in the country. however, in the same time, the Russian
government made some changes for the domestic companies, including an incentive structure
and an import tariff on the imported products. The production for Russia, was started in 2000, by
Volkswagen and the factors that influenced the decision was, the economic growth of the
country and the increasing standard of living of the people of the country and the low rate of car
ownership of the people. All these led to the onset of production in the country. Such initiatives
on the part of the country, had enabled the company, to open a production plant in the 2007, and
by the end of 2011, they planned on to open another production plant with the help of a
company, GAZ, and by 2014, the company made an investment of more than $1 billion.
However, in 2014, with the decrease in the oil prices, because of conspiracy between China and
America, the economy of the country, took a sharp downturn, which made the company to
decrease it production, since there is a decreased need and capability among the people of the
country. However, the interesting and important point is that, the company has decided to stay in
the country in order to strengthen the friendship between the country and the company (Pezzuto,
2019).
Underlying factors for production Russia.

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International Business Strategy
The company made Foreign Direct Investment was incorporated by the organization, as
the rivals of the same, such as Toyota, Fords and the like were also making direct investments
into the country (Pezzuto, 2019).
Theory related to this conduct.
The business conduct that have been taken by Volkswagen, is related to the Modern
Theory of FDI, which states that both product and factor markets are not feasible, for either
domestic or international market. It also entails upon the managerial and organizational functions
and strategies related to the FDI (Ewing, 2015).
Impact of FDI on Russian economy. Negative aspects of the same.
The FDI made by the automobile company will earn the country an influx of foreign
money which will positively impact the economy of the country. Also. It will increase the
standard of living of the inhabitants, who then further will invest into the products, which again
will gain the company economically.
The negative aspects of such investments are that, firstly, there will be an increased
monopoly power of Volkswagen, over the automobile industry of the country. This can also
affect the local companies in the market, as Volkswagen is a global company, it can easily
overpower the domestic organizations (Chikishev et al., 2016).
The impact of FDI on oil prices.
The oil controversy and the sudden increase of the same had affected the Russian
economy gravely, weakening the economy of the country, within some years. However, this has
affected the business conducts of Volkswagen in the country, as the company had rightly

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International Business Strategy
observed that the increasing oil prices will affect their market and hence, they have decreased
their production in the country (Pezzuto, 2019).
Note on Volkswagen’s decision to continue business in the country.
The company has decided to stay in Russia, which shows the ethical considerations of the
company and also the loyalty of the company to the agreement that they had made with the
country, of continuing the production, till 2020 (Pezzuto, 2019).
The pros of this decision are only for the country, as they will continue to have a foreign
investment which is impactful upon their economy and they can fight with their economic crisis.
However, the cons of this decisions remain only to the company, as it can observe a decrease in
the selling of their products, which will negatively impact upon their profit levels (Joshi & Klein,
2018).
However, to comment upon whether the decision taken by Volkswagen, is a correct one
or not, is very difficult question to answer, as the company can surely face a crisis situation. But
again, in the long run, when the country will be out of its crisis, there will be a friendly and
dependent relation between the two (Joshi & Klein, 2018).
Conclusion:
Therefore, as a concluding point, it can be said that both the organization, elicit to some
extent a similar kind of business strategy, that is profit through ethical considerations in the
business strategy, as the former company focuses upon providing access to medical health, to the

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people of the country in an affordable way, while the other company focuses on a friendly
relationship with the country.
Recommendation:
Although, as according to me, both the organizations, are established in their personal
fields and none of them need any recommendations for their business pattern, however, I will
like to recommend that the Global Tourism Company, can and should include the developing
countries in their orientation as well. As it is perceived that the country only focuses on the
developed countries, but it can expand its business in the developing countries as well.

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References:
Abubakar, A. M., & Ilkan, M. (2016). Impact of online WOM on destination trust and intention
to travel: A medical tourism perspective. Journal of Destination Marketing &
Management, 5(3), 192-201.
Banerjee, S., Nath, S. S., Dey, N., & Eto, H. (2018). Global medical tourism: A review.
In Medical Tourism: Breakthroughs in Research and Practice (pp. 1-19). IGI Global.
Chen, L. H., & Wilson, M. E. (2013). The globalization of healthcare: implications of medical
tourism for the infectious disease clinician. Clinical infectious diseases, 57(12), 1752-
1759.
Chikishev, E., Ivanov, A., Anisimov, I., & Chainikov, D. (2016, August). Prospects of and
problems in using natural gas for motor transport in Russia. In IOP Conference Series:
Materials Science and Engineering (Vol. 142, No. 1, p. 012110). IOP Publishing.
Ewing, J. (2015). Volkswagen says 11 million cars worldwide are affected in diesel
deception. The New York Times, 22.
Joshi, M., & Klein, J. R. (2018). Global Business. Oxford University Press.
Killing, P. (2013). Strategies for joint venture success (RLE International Business). Routledge.
Melby, M. K., Loh, L. C., Evert, J., Prater, C., Lin, H., & Khan, O. A. (2016). Beyond medical
“missions” to impact-driven short-term experiences in global health (STEGHs): ethical
principles to optimize community benefit and learner experience. Academic
Medicine, 91(5), 633-638.

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Pezzuto, I. (2019). Turning Globalization 4.0 into a Real and Sustainable Success for All
Stakeholders. Pezzuto, I.(2019). Turning globalization, 4, 8-18.
Verbeke, A. (2013). International business strategy. Cambridge University Press.