Bisnal meeting 9 international competitive strategy


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Bisnal meeting 9 international competitive strategy

  1. 1. Arief Budiman, IMSMEs
  2. 2. Strategi berkaitan dengan keputusan “besar” yang dihadapi organisasi dalam melakukan bisnis, berkaitan dengan perilaku yang konsisten, dan seharusnya mampu menciptakan keunggulan kompetitif perusahaan Strategi sangat penting untuk menentukan kesuksesan organisasi, sehingga inilah yang menjadi alasan mengapa mempelajari strategi menjadi amat bermanfaat dan menjanjikan MENGAPA MEMPELAJARI STRATEGI: Definisi dan Alasan
  3. 3. Coca-Cola in Chinese: “bite the wax tadpole” Coca-Cola 30 liter bottle?? U.S. carmakers’ left- hand drive cars “Forced” Standardization
  4. 4. Effective Standardization Coca-Cola’s “transnational polar bears” McDonald’s “Big Mac”
  5. 5. Barbie is 41 years old Sold in 130 countries National adaptations: •Physical features •Costumes •Activity sets Standardized physique: •Scaled to 6’2”, 110 lbs. •38-18-28 Barbie: The “All-American” Girl Goes Overseas
  6. 6. McMutton Pie in Australia Wendy’s shrimp sandwich in Japan Campbell’s non-condensed soups in the UK Coca-Cola’s 175 ml containers in Japan EffectiveAdaptation Cadillac Seville  1997 Asian edition  Right-hand drive, shorter seats, closer pedals, 10” shorter, retractable mirrors
  7. 7. The way firms make choices about acquiring and using scarce resources in order to achieve their international objectives Involves decisions that deal with all the various functions, products and regional unit activities of a company International Strategy
  8. 8. Porter’s Five Forces in Competitive Advantage
  9. 9. Firms that operate internationally can 1. Expand the market for their domestic product offerings by selling those products in international markets • Success depends on the type of goods and services, and the firm’s core competencies (skills within the firm that competitors cannot easily match or imitate) 2. Realize location economies by dispersing individual value creation activities to locations around the globe where they can be performed most efficiently and effectively • In order to realize location economies, firms should locate value creation activities where economic, political, and cultural conditions are most conducive to the performance of that activity Global Expansion, Profitability and Profit Growth
  10. 10. 3. Realize greater cost economies from experience effects by serving an expanded global market from a central location, thereby reducing the costs of value creation • The experience curve refers to the systematic reductions in production costs that have been observed to occur over the life of a product • Learning effects are cost savings that come from learning by doing • Economies of scale refer to the reductions in unit cost achieved by producing a large volume of a product 4. Earn a greater return by leveraging any valuable skills developed in foreign operations and transferring them to other entities within the firm’s global network of operations Global Expansion, Profitability and Profit Growth
  11. 11. To create a sustainable competitive advantage, a company tries to develop skills that • Create value for customers • Are rare • Are difficult to imitate or substitute for • Are organized in a way that the company can fully exploit Global Strategic Planning
  12. 12. Provides a means for top management to • Identify opportunities and threats • Formulate strategies to handle them • Stipulate how to finance and manage the strategies’ implementation • Provides consistency of action • Provides a thorough, systematic foundation for making decisions Global Strategic Planning Process The process of strategic planning provides a formal structure in which managers
  13. 13. Global Planning Process
  14. 14. Situational analysis • Forecast • Value Chain Analysis • Who are the target customers? • What value do we deliver? • How will customer value be created? Analyze Corporate ControllableVariables
  15. 15. TheValue Chain by Porter
  17. 17. Value Chain Sub-functions Infrastructure Technology Development Procurement Human Resource Management Inbound Logistics Operations Outbound Logistics Marketing Service Profit Margin Advert. Pricing Distrib. Packaging
  18. 18. Cost andAdaptation Pressures andTheir Implications for International Strategies
  19. 19. Used when companies typically centralize product development functions in their home country • Then transferred to foreign markets in order to capture additional value • Microsoft, McDonald’s Home Replication Strategy
  20. 20. Home Replication/Export Strategy (same as Export entry mode) U.S. Germany Mexico Malaysia
  21. 21. Used when there is strong pressure for adaptation to local market • Decision making decentralized to allow for quick change • Increases cost structure • Too much adaptation may take away from product • Cost and complexity of coordination can be substantial • Schneider Electric Multidomestic Strategy
  22. 22. Multidomestic Strategy U.S. Germany Mexico Malaysia Entry?
  23. 23. Used when a company faces strong pressure to reduce costs and limited pressure to adapt products for local markets • Strategy and decision making centralized • Company offers standardized products and services • Value chain activities in only one or a few areas • Results in limited ability to adjust to meet customer needs and higher transportation costs • Intel, Boeing Global Strategy
  24. 24. Global Strategy (TextbookVariety) U.S. Germany Mexico Malaysia Entry?
  25. 25. Used when a company confronts pressures for both cost effectiveness and local adaptation • Company locations based on where most beneficial for each activity • Upstream value chain activities will be more centralized • Downstream activities will be more decentralized • Achieving an optimal balance is challenging • Strategic decisions, structures and systems will be complex Transnational Strategy
  26. 26. Transnational Strategy (v.1) U.S. Germany Mexico Malaysia Entry?
  27. 27. Transnational Strategy (v.2) U.S. Germany Mexico Malaysia Entry?
  28. 28. Transnational Strategy (v.3) U.S. Germany Mexico Malaysia Engines Final Assembly Trim, seats, glass Steel Entry?
  29. 29. Global Entry Strategy
  30. 30. It depends on: •Vision •Attitude toward risk •How much investment capital is available •How much control is desired Which strategy should be used?
  31. 31. A contractual agreement whereby one company (the licensor) makes an asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation • Patent • Trade secret • Brand name • Product formulations Licensing
  32. 32. Provides additional profitability with little initial investment Provides method of circumventing tariffs, quotas, and other export barriers Attractive ROI Low costs to implement Advantages to Licensing
  33. 33. Limited participation Returns may be lost Lack of control Licensee may become competitor Licensee may exploit company resources Disadvantages to Licensing
  34. 34. Contract manufacturing • Company provides technical specifications to a subcontractor or local manufacturer • Allows company to specialize in product design while contractors accept responsibility for manufacturing facilities Franchising • Contract between a parent company-franchisor and a franchisee that allows the franchisee to operate a business developed by the franchisor in return for a fee and adherence to franchise-wide policies Special Licensing Arrangements
  35. 35. Will local consumers buy your product? How tough is the local competition? Does the government respect trademark and franchiser rights? Can your profits be easily repatriated? Can you buy all the supplies you need locally? Is commercial space available and are rents affordable? Are your local partners financially sound and do they understand the basics of franchising? Franchising Questions
  36. 36. Partial or full ownership of operations outside of home country •Foreign Direct Investment Forms • Joint ventures • Minority or majority equity stakes • Outright acquisition Foreign Direct Investment
  37. 37. Entry strategy for a single target country in which the partners share ownership of a newly-created business entity JointVentures
  38. 38. Disadvantages • Requires more investment than a licensing agreement • Must share rewards as well as risks • Requires strong coordination • Potential for conflict among partners • Partner may become a competitor Advantages • Allows for sharing of risk (both financial and political) • Provides opportunity to learn new environment • Provides opportunity to achieve synergy by combining strengths of partners • May be the only way to enter market given barriers to entry JointVentures
  39. 39. Start-up of new operations • Greenfield operations or • Greenfield investment Merger with an existing enterprise Acquisition of an existing enterprise Investment via Ownership or Equity Stake
  40. 40. Possible terms: • Collaborative agreements • Strategic alliances • Strategic international alliances • Global strategic partnerships Global Strategic Partnerships