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Ch6
 

Ch6

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  • today looking at factors that drive strategic choice at a global level and the alternative global strategies available plus the challenges such strategies bring
  • few companies truly global especially ones we perceive as having global brand names. if view globalisation in termas of size nd look at the foreign assests of a company then the mcdonalds and nike etc are nowehere to be seen..few companies that see them selves as global are really transnational. To get a better view some pundits prefer to take an average of foeign to toal assets together with the% of foregin employees to toal employment. even if you do it this way still absence of brand names
  • Interstingly not one US firm on this index. What this does is give you a much better indication of the firms that are seeking a global presence rahther than the ones that perhaps have already achieved it. However whilst these companies trying to be global lot of confusion in literature as to what is meant by globalisations. it tends like culture to be one of those kitchen sink terms that means everything and nothing. So perhaps before we go on to look at some of the different types of strategies such firms employ we shoudl spend a bit of time deconstrcting the differing factes of globalisation.
  • 1. access due to politiacl &economic changeds , opening up of new mkts 2. newopps due to privatidsation ,eg.steel telecomunications, de regulation eg finance services 3.convergence of tech 4.industry restructuring , cross barrier competition eg.gen motors are now in finacanial services, tobacco-food 5.emergence of the global village 6. satellite /clable tv std image importsant. telecommunications 7. mature marketss need for market share marketing , mergers amnongst equals eg glaxo 7. sourcing see next slide 8. need to develop global strageeies supported by effective programmes so what are the alternative responses
  • web based intranets opening up of public procurement stadium forgers preferred supplier on global basis oil industry
  • Several alternative strategic responses really depending where you are at moment in refernce to barnd strenght and geographical coverage against this background need to devepolop approppriate strategic response tendss to be a trade off of using resource to invest in npd or geographical coverage. level of these determine option cadbury baron as was rowntree two cusaders pepsi 7 nestle gto distrinbutiuon sorted in the war kellog seen as king own brand tradiitonally common but may now becoming more powerful internationally
  • MD see nerxt slide global slides after transnational can beinegration of diverse assets and resources people and flexible management to schieve global flexibility and lkevertage global competititive advantage very complex to manage that complexity can be its CA equally it can be its downfall eg IBM< mid nineties when lou gerstner came in one of key stragteies was to simplify everything go to slides
  • challenge is how to turn widestpread internationalk presence into global brand however have to do this by offering added value & benefits on a blobal scale whilst achieving cost effeciencies . there global strategies of whatever kind are a trade off between standardisatio and adaptation discuss coninuum when debating standardisation important to differntiate between differnt levels of stragegey see next slide

Ch6 Ch6 Presentation Transcript

  • GLOBAL STRATEGIES Session 6
  • TOP15 TRANSNATIONAL COMPANIES BY FOREIGN ASSETS 2005 SOURCE: UNCTAD
  • TOP 10 COMPANIES INDEX OF TRANSNATIONALITY (2005) Index: Average of foreign to total assets, foreign to total sales and foreign to total employment. SOURCE: UNCTAD
  • TOP 12 COMPANIES – DEVELOPING ECONOMIES INDEX OF TRANSNATIONALITY (2005) SOURCE: UNCTAD
  • Drivers of ‘Globalisation’
    • Market access
    • Market opportunities
    • Industry standards
    • Sourcing
    • Products & services
    • Technology
    • Customer requirements
    • Competition
    • Cooperation
    • Distribution
    • Communication
    • Company’s strategy, business programmes and processes
  • BENEFITS OF GLOBAL SOURCING
    • Cheaper labour rates
    • Better or more uniform quality
    • Access to the best technology, innovation and ideas
    • Access to local markets
    • Economies of scale advantages
    • Lower taxes and duties
    • Potentially lower logistics costs
    • More consistent supply
  • THE INTERNATIONAL COMPETITIVE POSTURE MATRIX Source: Adapted from Gogel, R and Larreche, JC (1989)
  • ALTERNATIVE WORLD WIDE STRATEGIES
  • DEGREES OF STANDARDISATION OR ADAPTION
    • Marketing Objectives and Strategies
      • More readily standardised
    • Marketing Mix
      • Products most easily standardised
      • Promotion less so
      • Distribution and pricing difficult to standardise
    • Operational activities
      • The more operational the decision, the more likely it will be differentiated
  • CONTINUUM OF STANDARDISATION Pricing Distribution Sales Force Sales Promotion Product Image Objectives Strategy Differentiation Standardisation
  • GLOBALISATION PUSH & PULL FACTORS Source: Meffet and Bolz (1993) in Hallibuton and Hunerberg (eds) European Marketing Readings and Cases Addison Wesley 1993
  • FORCES DRIVING A MULTI-DOMESTIC APPROACH
    • Industry standards remain diverse
    • Customers continue to demand locally
    • Being an insider remains critically important
    • Global organisations are difficult to manage
    • Management myopia
  • TRANSNATIONAL STRATEGIES
    • Transnational companies aim to build three strategic capabilities:
      • Global scale efficiency and competitiveness
      • National level responsiveness and flexibility
      • Cross market capacity to leverage learning on a world wide basis
  • ACHIEVING GLOBAL COMPETITIVE ADVANTAGE
    • Simple and complex individual product and market policies
    • Customer segments specific and unique to specific market or transnational group
    • Working closely with firms and simultaneously ensuring that values of company are maintained and demonstrated to stakeholders
    • Maintaining / building added value in the supply chain
  • BUILDING A GLOBAL PRESENCE
    • Responding to the changing basis of competitive advantage
    • Increasing global appeal by building the global brand
    • Creating a global presence by achieving global reach
    • Management of diverse and complex activities
  • THE CONCEPTUAL FRAMEWORK OF A FIRM
  • Functions Of Different Management Levels
  • DEVELOPMENT OF STRATEGY Organisational Structures & the Head Office - Subsidiary Relationship
  • INTERNATIONAL PLANNING PROBLEMS
  • A GOOD INTERNATIONAL MANAGER
    • Able to cope with cognitive complexity
      • Understand issues from variety of complicated perspectives
    • Have cultural empathy
      • Including sense of humility and power of active listening
    • Have emotional energy
      • Capable of adding depth and quality to interaction
    • Demonstrate psychological maturity
      • Curiosity to learn, orientation to time, personal morality
    Wills and Barham (1994)