2. Is It Important Enough to BeIs It Important Enough to Be
Worth the Complexities?Worth the Complexities?
You do not choose to become global.
The market chooses for you; it forces
your hand.
Alain Gomez, CEO, Thomson, S.A.Alain Gomez, CEO, Thomson, S.A.
3. Some ReasonsSome Reasons
To enter more favorable markets, e.g., fasterTo enter more favorable markets, e.g., faster
growing, more profitable, better governmentgrowing, more profitable, better government
climate...climate...
To reach new customersTo reach new customers
To gain access to lower-cost labor marketsTo gain access to lower-cost labor markets
and/or key/lower-cost raw materialsand/or key/lower-cost raw materials
To spread business risk across a wider baseTo spread business risk across a wider base
To gain other advantages inherent in locationTo gain other advantages inherent in location
4. Different International StrategiesDifferent International Strategies
Multidomestic or multinationalMultidomestic or multinational
Global or internationalGlobal or international
TransnationalTransnational
5. Application of StrategicApplication of Strategic
Management ProcessManagement Process
Use same 3-phase processUse same 3-phase process
External environment(s) differ and areExternal environment(s) differ and are
especially importantespecially important
Many constraintsMany constraints
May have to do diagnosis & developMay have to do diagnosis & develop
strategies for different countriesstrategies for different countries
6. DiagnosisDiagnosis
External environment makes the
difference between countries
External scanning & analysis is especially
important
Can use same 5-force model (by country
or region) and same four aspects of
general environment
Still need SWOT and Critical Issues (may
be specific to country or region)
7. FormulationFormulation
Still corporate-level, competitive, & otherStill corporate-level, competitive, & other
strategiesstrategies
Still need rich range of alternativesStill need rich range of alternatives
May need different strategies in each nationMay need different strategies in each nation
or regionor region
Vertical integration has more disadvantagesVertical integration has more disadvantages
Partners are usually neededPartners are usually needed
Need to decentralize more, but this createsNeed to decentralize more, but this creates
problemsproblems
8. Formulation: Corporate LevelFormulation: Corporate Level
Multidomestic or multinationalMultidomestic or multinational
Global or internationalGlobal or international
TransnationalTransnational
9. Business Level StrategiesBusiness Level Strategies
Licensing
Management contracts
Exporting
Joint ventures, production sharing,
subcontract arrangements
Turnkey construction contracts
BOT (build, operate, transfer) contracts
Acquisitions
Green-field development
11. Needs for partners again (choice andNeeds for partners again (choice and
relationships are critical)relationships are critical)
Organizing (decentralization vs.Organizing (decentralization vs.
centralization)centralization)
StaffingStaffing
Manage key cultural differences:Manage key cultural differences:
– Power distancePower distance
– Uncertainty avoidanceUncertainty avoidance
– Individualism-collectivismIndividualism-collectivism
– Masculinity-femininityMasculinity-femininity
– Time orientationTime orientation
12. Implementation (cont.)Implementation (cont.)
Increased need for information & goodIncreased need for information & good
financial measures to maintain controlfinancial measures to maintain control
Political risksPolitical risks
Economic risksEconomic risks
Importance & difficulty of maintaining goodImportance & difficulty of maintaining good
host country relationshipshost country relationships
