Competing in International Markets
business
Description
Competing in International Markets
LEARNING OBJECTIVES
After reading this chapter, you should be able to understand and articulate answers to the following
questions:
1. What are the main benefits and risks of competing in international markets?
2. What is the “diamond model,” and how does it help explain why some firms compete better in
international markets than others?
3. What are the various global strategies that firms can adopt?
4. What forms of involvement are available to firms that seek to compete in international markets?
Kia Picks Up Speed
Kia is enjoying accelerated growth within the global automobile industry.
On June 2, 2011, South Korean automaker Kia announced plans for a major expansion of its American
production facility. Capacity at Kia Motors Manufacturing Georgia Inc. (KMMG) was slated to expand 20
percent from 300,000 to 360,000 vehicles per year. In addition to the crossover utility vehicle Sorento,
the plant would begin making a sedan named the Optima in September 2011. The expansion of the plant
was estimated to cost $100 million and was expected to create 1,000 new jobs. [1]
This ambitious growth was made possible by Kia’s superb performance in the US market. KMMG had
started building vehicles less than two years earlier after being constructed for a cost of $1 billion. In
2010, yearly sales in the United States climbed above 350,000 vehicles. Kia’s overall share of the US
market increased in 2010 for the sixteenth consecutive year. In May 2011, Kia sold more than 48,000 cars
and trucks in the United States, an increase of more than 53 percent from May 2010 sales levels. The Optima
led the way with a whopping 210 percent increase in sales.
Kia was not the only beneficiary of its success.
