Question Tag: International Expansio

Persiba IT Limited (PIL) started operations 10 years ago in Ghana providing a wide range of information technology solutions to diverse clientele. Mr. Quainoo, the chief executive officer (CEO) of the company, recently has been contemplating venturing into other West African markets to take advantage of untapped opportunities. This is also to strengthen the competitive position of PIL since Ghanaian market growth is beginning to slow down and competition is getting keener.

At the 2016 second quarter Board meeting, the CEO tabled his proposal for consideration and board’s input before the document was finalized. During the Board discussions Prof Amartey, who lectures Corporate Strategy, suggested to the CEO to use Porter’s Diamond of national advantage to assess competitive advantage of the other West African countries the company intends to enter. Prof. Amartey also mentioned to the CEO that companies that compete in the global marketplace typically face two types of competitive pressures: pressures for cost reductions or global integration and pressures to be locally responsive.

The cost reduction-local responsiveness dilemma shapes and results in four basic international strategies – international, global, multidomestic, and transnational – which the CEO should consider in making the choice.

Required:

Discuss how the FOUR factors in the Porter’s Diamond of national advantage determine competitiveness of the other West African countries on the global stage. (8 marks)