Thinking Globally
CHAPTER 8

Strategic Management:Logic and Action
Huff, Floyd, Sherman, Terjesen




                    ...
Globalization
                                     globalize | ‘glõbè‚lïz |
                                              ...
International
Diversification
Advantages                               Disadvantages
Earn greater returns on their existin...
Determinants of
National Advantage                  (M.E.Porter)




              Firm strategy,
              structure,...
International
   Strategy
Competitive Forces for Low Cost




                                      Global                ...
International
   Strategy
                                                                                Utilize domestic...
International
   Strategy
                                                                                Develop products...
International
   Strategy
                                                                                Integrate
      ...
International
   Strategy
                                                                                Emphasizes
     ...
International Entry Mode
                                                      Greenfield
         HIGH



               ...
International Entry Mode
ENTRY MODE      ADVANTAGES                                      DISADVANTAGES
Exporting       • r...
Cross-Cultural Differences
        Political Risks realted to instability in national
        governments & to war, both c...
Country Cluster                                             (G. Hofstede & M. Bond)


                                    ...
IDENTIFY                        EXPLORE                    USE CORE                                   STRATEGIC
INTERNATIO...
Thank You!!
now you may ask questions
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Strategic Think Globally

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A summary of chapter 8 from Strategic Management: Thought and Action by Anne Sigismund Huff, Steven W. Floyd, Hugh D. Sherman, and Siri Terjesen

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Strategic Think Globally

  1. 1. Thinking Globally CHAPTER 8 Strategic Management:Logic and Action Huff, Floyd, Sherman, Terjesen Brahmanti Prameswari 0806432341 Emi Listika Zen 0806432581 Pelly Sianova 0806433464
  2. 2. Globalization globalize | ‘glõbè‚lïz | verb develop or be developed so as to make possible international influence or operation.
  3. 3. International Diversification Advantages Disadvantages Earn greater returns on their existing Market differ in way cannot always be skills and competencies anticipated Reduce financial risk Reduce the effectiveness of corporate management Strengthening bargain power The loss of flexibility and responsiveness to shifting consumer tastes
  4. 4. Determinants of National Advantage (M.E.Porter) Firm strategy, structure, and rivalry Factor Demand condition conditions Related and supporting industries
  5. 5. International Strategy Competitive Forces for Low Cost Global Transnational Strategy Strategy Multidimensional Internasional Strategy Strategy Competitive Forces for Local Responsiveness
  6. 6. International Strategy Utilize domestic resources and Competitive Forces for Low Cost capabilities Global Transnational and expand sales Strategy Strategy and operation across more than one country boundries Multidimensional Internasional Strategy Strategy Competitive Forces for Local Responsiveness
  7. 7. International Strategy Develop products, services, and Competitive Forces for Low Cost experiences Global Transnational that respond to Strategy Strategy national differences Multidimensional Internasional Strategy Strategy Competitive Forces for Local Responsiveness
  8. 8. International Strategy Integrate operations to Competitive Forces for Low Cost achieve cost and Global Transnational differentiation Strategy Strategy advantages in multiple economist Multidimensional Internasional Strategy Strategy Competitive Forces for Local Responsiveness
  9. 9. International Strategy Emphasizes responsiveness Competitive Forces for Low Cost to local needs and Global Transnational global efficiencies Strategy Strategy simultaneously Multidimensional Internasional Strategy Strategy Competitive Forces for Local Responsiveness
  10. 10. International Entry Mode Greenfield HIGH Joint Venture Level of Risk & Required Investment Licensing Franchising Export LOW LOW HIGH Potential for Return & Level of Control
  11. 11. International Entry Mode ENTRY MODE ADVANTAGES DISADVANTAGES Exporting • require little international experience • high transportation costs & tariffs • require small level of financial investment Licence low risk (little financial investment) • low profit return • loses some control over the use of its product or processes Franchise • fast & relatively easy method for firm to • an inexpensive way to exploiting foreign leverage brand name dan strandardized market opportunity system internationally. • potential loss of control over brand & • lower strat-up cost & access to proven product quality (damaging reputation) business model • less severe than other forms of licensing Joint Venture • shared ownership reduces the financial • create new competitor investment and risk involved in • may have different (opposing) goals at developing new market. the start • benefit from skill of other partner. • objective of partner often change over time Wholly Owned • acquiring firm can move very quickly into • complex, often costly, time consuming Subsidiary = major market • high risk Greenfield • complete control over strategic decisions Venture • different corporate value and approaches • often better profit potential. (high turnover of talented employees)
  12. 12. Cross-Cultural Differences Political Risks realted to instability in national governments & to war, both civil & international (terrorist activities) Economic Risks related to likelihood of the government management of the economy will affect the country ‘s business environment such as currency fluctuations, change in inflation rate
  13. 13. Country Cluster (G. Hofstede & M. Bond) NORDIC GERMANIC Finland, Norway, Austria, Germany, Denmark, Sweden ANGLO Switzerland Australia, South Africa, Canada, NZ, UK, USA, NEAR EASTERN INDEPENDENT Ireland Turkey, Iran, Greece Brazil, Japan, India, Israel LATIN EUROPEAN ARAB France, Belguim, Italy, Bahrain, Oman, UAE, Spain Saudi Arabia, Kuwait, Abu-Dhabi LATIN AMERICA FAR EASTERN Argentina, Venezuela, Malaysia, Philippines, Chile, Peru, Mexico, Singapore, Taiwan, Colombia South Vietnam, Indonesia
  14. 14. IDENTIFY EXPLORE USE CORE STRATEGIC INTERNATIONAL RESOURCES AND COMPETENCE COMPETITIVENESS OPPORTUNITIES CAPABILITIES OUTCOMES International Models of entry strategies Political • Exploit economies • International • Exporting Risks of scale business-level Better • Licensing strategy performance • Exploit economies • Franchice of scope • Multidomestic strategy • Joint Venture • Exploit national differences • Global strategy • New wholly Innovation owned • Transnationaal Economic subsidiary strategy Risks Redraw of International Strategy, Source: Michael A. Hitt, et al, Strategic Management: Competitiveness and Globalization, 4th edition, South-Western Pub, 2008
  15. 15. Thank You!! now you may ask questions

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