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International strategic management

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International strategic management

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International strategic management

  1. 1. INTERNATIONAL STRATEGIC MANAGEMENT  By, Prayash Neupane
  2. 2. INTRODUCTION  The extended form of management that manages international business through strategic planning & decision making, organizing, leading and controlling function in the global context.  It focus on achieving organizational goals so that all concern parties or stake holders are satisfied.  It concern on marketing, Human resource, Financial and Operational & production management etc in global context.  The strategies are formulated and implemented by considering the long term vision & goals based on the analysis of the external environmental factors.
  3. 3. TYPES OF STRATEGIC MANAGEMENT Global Strategy Trans-national Strategy International Strategy Multi-Domestic Strategy Pressures for local responsiveness Cost reduction Pressures High High Low Low
  4. 4. INTERNATIONAL STRATEGY  It try to create value by transferring valuable skills and products to foreign markets where local indigenous competitors lack those skills and products.  In reality, the most international firms have created value by transferring different products & offerings developed at home to new overseas market.  They tend to centralize product development at home and establish only local manufacturing and marketing units at the overseas market.  Examples are McDonalds, IBM, Wal-Mart, Microsoft etc.
  5. 5. ADVANTAGES  Ability to exploit transfer core competencies to foreign market.  Ability to economize global supplies. DISADVANTAGES  Lack of local responsiveness.  Inability to realize location economies.  Inability to exploit experience curve effects.
  6. 6. MULTI-DOMESTIC STRATEGY  This strategy is to customize the firm’s product & offering, management strategy and business strategy to the conditions of the foreign countries where it is operating.  This strategy is based on an English adage “when you are at rome, live in the roman style; when you are elsewhere, live as they live elsewhere.”  Most desirable when there are high pressures for local responsiveness and low pressures for cost reductions.
  7. 7. ADVANTAGES  Ability to customize product offerings and marketing in accordance with local responsiveness.  Ability to make quicker response to policy changes, market changes and opportunities at the local market. DISADVANTAGES  Inability to realize location economies.  Inability to exploit experience curve effects.  Failure to transfer core competencies to foreign market  Possibility of decrease in profit
  8. 8. GLOBAL STRATEGY  A global strategy is focus on pursuing loe-cost tactics.  This strategy is not to customize the firm’s product offering and marketing strategy to local conditions of the foreign countries because customization rises cost.  Under this strategy firm concentrates its production, marketing and R&D activities only in a few favorable locations.
  9. 9. ADVANTAGES  Ability to exploit experience curve effects.  Ability to exploit location economies. DISVANTAGES  Lack of local responsiveness.  Difficulty in handling the resistance from subsidiary employees over production system and marketing techniques.
  10. 10. TRANS-NATIONAL STRATEGY  This strategy involves simultaneous focus on reducing costs, transferring skills & products, and boosting local responsiveness in foreign market.  It is balanced combination of all other strategy.  Recommended when a firm faces high pressures for both cost reductions and local responsiveness and when there are significant opportunities for leveraging valuable skills within the firm’s global network of operation.  Example, Samsung
  11. 11. ADVANTAGES  Ability to exploit experience curve effects.  Inability to realize location economies.  Ability to customize product offerings and marketing in accordance with local responsiveness.  Ability to reap benefits of global learning.  Well balanced mechanism on authority-responsibility sharing. DISADVANTAGES  Difficulties in implementation  High cost of exercising flexibility from headquarter.  High cost for controlling & monitoring of subsidiaries.
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