International Business Strategy - Summative Reflection Report

This is a summative reflection report, written in the first person at the end of an International Business Strategy module. It records what the module taught and where the learning was difficult, working through the three layers of the business environment, the CAGE framework alongside PEST, Porter's Five Forces, strategic stretch and VRIO, and the shareholder and stakeholder debate. It closes with an appendix of worked examples and an action plan.

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What Did the International Business Strategy Module Cover?

The strategic reasons a firm sets up abroad, and the problems that follow. Week one covered the three stages multinationals work through as they adapt to global markets, IKEA's route to becoming a leading home-furnishings retailer, and the economies of scale that come from selling a uniform product. Later weeks added the environment frameworks, industry analysis and the resource-based view.

I came into the module having used SWOT in the previous semester and nothing else. What I wanted from it was the ability to say why a firm had chosen one route into a market rather than another, instead of describing the route it took. That turned out to be the harder skill, and it is the one the rest of this reflection is about.

The types of international strategy came first. Buckley and Ghauri (2014) set out the choice between concentrating activity in a few locations and spreading it, and Yip (1989) argues that a global strategy is not one thing but a set of separate decisions, taken one at a time, about how far to standardise the product, the marketing and the competitive moves. Reading those two together changed how I read the IKEA case. The uniform product is the source of the scale economy Frynas and Mellahi (2015) describe, and it is also the constraint that forces the firm to adapt everything else around it.

How Do You Analyse the International Business Environment?

The module splits it into three layers. The macro-environment covers political, social, economic and technological factors. The industry environment covers buyers, suppliers, competitors and what decides competitive success. The internal environment covers the resources and capabilities that decide what the firm can do. Grant (2016) treats them as one system, because a strength only counts against a particular environment.

The three layers of the business environment, with one fact in each

Point of comparison	Macro-environment	Industry environment	Internal environment
What it covers	Macro-environment Political, social, economic and technological factors	Industry environment Buyers, suppliers, competitors and what decides competitive success	Internal environment The resources and capabilities that decide what the firm can do
Example fact	Macro-environment A rising middle-class income	Industry environment A supplier that can dictate terms	Internal environment A distribution capability the firm already owns
What it tells you	Macro-environment The market may be growing	Industry environment The growth may not reach the firm	Internal environment Whether the firm can take the opportunity at all

Splitting the environment this way was the first thing in the module that changed how I work rather than what I know. Before it, I would gather everything I could find about a country and call it analysis. The three layers give each fact a job. A rising middle-class income belongs to the macro layer and tells me the market may be growing. A supplier that can dictate terms belongs to the industry layer and tells me the growth may not reach the firm. A distribution capability the firm already owns belongs to the internal layer and tells me whether it can take the opportunity at all. The open textbook Fundamentals of Business (Daddey and Newton, 2024) added a point I only used later: the groups around a firm overlap, so an existing supplier can be a stakeholder and a participant and still act on the firm from outside as an external influence. That puts stakeholders inside the environment rather than outside it.

Where I found this difficult was the boundary between layers. A change in regulation is macro, but a change in regulation that affects only one of three competitors is an industry fact. I still resolve that case slowly, and the action plan below records it as something to practise.

What Is the CAGE Framework and How Is It Different from PEST?

CAGE measures the distance between two countries, usually a multinational's home market and the one it plans to enter, along four dimensions: cultural, administrative, geographic and economic. PEST describes a single country on its own terms. The two answer different questions: PEST asks whether a market is attractive, CAGE asks how far it sits from where the firm operates.

PEST and CAGE compared

Point of comparison	PEST	CAGE
Unit of analysis	PEST One country, on its own	CAGE A pair of countries, usually the firm's home market and the target
Question it answers	PEST Is the market attractive?	CAGE How far is it from where the firm already operates?
Transport cost	PEST No place for it	CAGE Part of geographic distance
Typical evidence	PEST Market size, income per head	CAGE Legal tradition, trade agreements, a shared language or colonial history

Ghemawat (2007) is the source I found most useful here, and the point that stayed with me is that distance is not only geographic. Two countries can sit next to each other and be administratively far apart, because they use different legal traditions or have no trade agreement. Two countries can be on opposite sides of the world and be culturally close, because they share a language and a colonial history. A firm that reads only PEST will compare two markets on size and income and pick the larger one, without noticing that one of them costs twice as much to serve.

The geographic component is the one that makes the difference concrete. It brings transport cost into the comparison, which for a bulky, low-value product can decide the whole question and which PEST has no place for at all. Applied to the IKEA case, that is why the firm's early expansion followed a pattern of nearby markets with similar retail conditions rather than the largest markets available.

What Did the Module Teach About Porter's Five Forces?

The main lesson was that the framework is only as good as the market definition behind it. Run on a broad industry, it describes no competitive situation in particular, so segmentation and strategic group analysis come first. Dobbs (2014) makes the same point, and his industry-analysis templates give each force a set of questions rather than a heading.

The Amazon example in Frynas and Mellahi (2015) is what made the framework useful to me rather than descriptive. Read one way, the five forces are conditions a firm has to live with. Read through Amazon, they are conditions a firm can act on: buyer power is high because switching is easy online, so the firm invests in making switching feel worse; supplier power is diluted by widening the range; and the threat of entry is raised by building a distribution network a new entrant cannot match quickly.

Porter's own later argument, that the Internet tends to weaken industry profitability without giving any firm an operational advantage it can keep to itself (Porter, 2001), sits awkwardly beside that example, and the module did not resolve the tension. My reading is that both are true at different levels: the Internet lowered average profitability by making prices comparable, and it widened the gap between the firms that used it to change the forces and the firms that only absorbed the price pressure. Buyers who spend more time online also expect more, which raises the value-added activity every competitor has to fund.

The Product Life Cycle was covered in the same block. I already knew it from the Supply Chain Management module, and the addition here was seeing it used as an argument about where production should sit rather than as a description of a sales curve.

How Do Strategic Stretch and VRIO Explain Competitive Advantage?

Strategic stretch finds new uses for resources and skills a firm already has, in other markets or in ways rivals struggle to copy. VRIO tests each candidate: a resource gives an advantage only if it is valuable, rare and hard to imitate, and the firm is organised to exploit it. Stretch produces the list; VRIO decides what stays on it.

What I took from this pair is that the two questions have to be asked in that order, and that most of my own earlier analysis had only asked the first. Listing a firm's capabilities produces a list of things it is good at, most of which its competitors are also good at. The organisation test is the one I had never applied, and it is the one that most often fails: a firm holds something rare and valuable and has no structure that lets it be used, which is why the advantage never appears in the results.

Grant (2016) frames this as the link between internal analysis and the strategic decision itself, and the practical consequence for a report is that the internal section has to end in a shortlist rather than an inventory.

What Is the Difference Between Shareholders and Stakeholders?

Shareholders own equity in the company. Stakeholders are the wider set of groups that contribute to its wealth-creating capacity, typically shareholders, customers, employees, suppliers and the local community. Shareholder theory makes maximising shareholder returns the manager's primary duty; stakeholder theory gives managers a duty to both (Smith, 2003).

That definition is the one I wish I had found in week one. What I actually wrote at the time was that I had become confused after reading several sources, and the confusion is worth recording because it is where the learning happened. My notes said that executives oversee whether the company's goals are met and create as much value for stakeholders as they can. What I could not see was why that duty sits alongside a duty to shareholders rather than replacing it. Smith (2003) settles it: the two theories differ over who counts as a beneficiary, and stakeholder theory asks managers to balance interests that can conflict, even where the balance reduces shareholder returns.

Once the definition is clear, corporate social responsibility follows from the stakeholder side of the argument rather than sitting apart from it. That is the link I made late, and the action plan below records it as something to take into the next module.

What Did the Module Change About How I Analyse Strategy?

It changed the order I work in. I now assign each fact to a layer of the environment before I use it, which stops a country report becoming a list. I define the market before I apply the five forces. And I finish an internal analysis with a shortlist tested against VRIO rather than an inventory of capabilities.

Underneath those, the change is in how I read globalisation. At the start of the module I treated it as a topic, something a report has a section about. It is better understood as a feature of the business environment that runs through every layer: it changes the macro factors, it changes who counts as a competitor, and it changes which of a firm's resources are still rare. The next step is to apply all of this to a live case rather than a taught one, which is the first row of the action plan below.

Appendix: Worked Examples and Action Plan

1. Five forces applied to a branded vegetable range

Five forces on a branded vegetable range

Competitive rivalry

Strength 4 of 5

• High, and largely on price

Threat of new entrants

Strength 4 of 5

• Nothing about the business is hard to copy

Bargaining power of suppliers

Strength 1 of 5

• Many growers
• The produce is close to interchangeable

Bargaining power of buyers

Strength 4 of 5

• A shopper who finds the branded carrots dearer buys the unbranded ones next to them

Threat of substitutes

Strength 4 of 5

• Frozen and tinned vegetables compete directly on cost

This was my own practice example, chosen because it is a case where the framework returns a clear negative. Suppose an established grocery brand considers selling fresh vegetables under its own name. Supplier power is low, because there are many growers and the produce is close to interchangeable. Buyer power is high for the same reason: a shopper who finds the branded carrots dearer will buy the unbranded ones next to them. Rivalry is high and largely on price. The threat of substitutes is high, since frozen and tinned alternatives compete directly on cost. The threat of new entry is high, because nothing about the business is hard to copy. Four of the five forces are unfavourable, and the one that is not does not compensate. The brand would carry the cost of packaging, marketing and management without a price premium to fund it. That conclusion is what convinced me the framework is a decision tool rather than a description: it told me not to do something.

2. VRIO applied to Apple

The second practice example, chosen to test the organisation criterion. Apple's brand is valuable and rare, and it is hard to imitate because it rests on decades of product decisions rather than on advertising spend. The criterion that does the work is the fourth: the firm is organised to exploit the brand, because its retail, software and hardware are managed as one system, so a customer who buys one product is inside the others. A competitor could hold an equally strong brand and capture less from it. Where I originally wrote only that the strength was brand value and the opportunity was cheaper versions, the VRIO test shows why the cheaper version is the risky move: it puts pressure on the rarity that makes the brand work.

3. Action plan

Related samples and pages:

• Reflection paper example, the full guide to structuring a reflective piece.
• Sample reflective essay, a shorter reflection written to the same kind of brief.
• Cultural differences in business, for the cultural distance side of CAGE.
• Toyota's global strategy and competitive advantage, the same frameworks applied to one company.
• All MBA assignment samples.

Need a similar reflective report on your own module? Message us on WhatsApp with your brief and deadline.

Sources

• Buckley, P.J. and Ghauri, P.N. (2014) International Business Strategy: Theory and Practice. Abingdon: Routledge. Cited for the choice between concentrating and dispersing international activity.
• Daddey, F. and Newton, R. (2024) 'Chapter 6: The external environment's influence', in Fundamentals of Business. Douglas College. Available at: pressbooks.bccampus.ca. Cited for the overlap between a firm's participants, stakeholders and external influences.
• Dobbs, M.E. (2014) 'Guidelines for applying Porter's five forces framework: a set of industry analysis templates', Competitiveness Review, 24(1), pp. 32-45. Available at: doi.org/10.1108/CR-06-2013-0059. Cited for defining the market before applying the framework.
• Frynas, J.G. and Mellahi, K. (2015) Global Strategic Management. 3rd edn. Oxford: Oxford University Press. Cited for the economies of scale from a uniform product and for the Amazon five-forces example.
• Ghemawat, P. (2007) Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter. Boston: Harvard Business Press. Source of the CAGE framework as used here.
• Grant, R.M. (2016) Contemporary Strategy Analysis: Text and Cases. Chichester: Wiley. Cited for the three layers of the business environment and for the resource-based view.
• Porter, M.E. (2001) 'Strategy and the Internet', Harvard Business Review, 79(3), pp. 62-78. Available at: hbr.org. Cited for the argument that the Internet tends to weaken industry profitability.
• Smith, H.J. (2003) 'The shareholders vs. stakeholders debate', MIT Sloan Management Review, 44(4), pp. 85-90. Available at: sloanreview.mit.edu. Source for the shareholder and stakeholder definitions.
• Yip, G.S. (1989) 'Global strategy... in a world of nations?', Sloan Management Review, 31(1), pp. 29-41. Cited for global strategy as a set of separate standardisation decisions.