1) The document discusses strategies that international firms use to balance global integration with local responsiveness. It profiles four main types of strategies: international, multidomestic, global, and transnational.
2) Managers must configure their value chain activities across locations and coordinate between activities to create value. Industry structure, costs, and customer needs influence how value chains are configured.
3) Firms face pressures to both standardize products globally for efficiency and adapt products locally for effectiveness. The pressures determine what strategy is most appropriate.
The document discusses global strategies and how companies can globalize. It defines a global strategy as treating the world as a single market by standardizing products across countries. A multi-domestic strategy involves customizing products for each local market. Sources of competitive advantage from a global strategy include economies of scale, exploiting differences in resources between countries, and strategic flexibility. The document also discusses types of global strategies like foreign direct investment, joint ventures, contractual agreements, and licensing.
The document discusses strategy in international business. It covers topics like the role of strategy, industry structure and the five forces model, value creation through cost leadership and differentiation, global integration versus local responsiveness pressures, and the integration-responsiveness grid for measuring these pressures. The value chain and how it is configured and coordinated in response to changes is also examined. Different types of strategies are outlined, and future visions for strategies with concepts like metanational and cybercorp companies.
This document provides an overview of key concepts in global strategy formulation. It discusses factors that drive industry globalization and unique risks of operating globally. It examines different global strategies like standardized, tailored, and changed approaches. It also analyzes Walmart's transformation into a major global company through international expansion focused initially in Americas, then China. Walmart exploited buying power, domestic competencies, and learned through local adaptations in different market entries.
Competitive advantage comes from low costs or differentiation. Companies pursue cost leadership, differentiation, or focus strategies depending on their scope and basis of advantage. Cost leadership aims to have the lowest costs industry-wide while differentiation makes products unique. Focus involves serving a niche market better than competitors through low costs or differentiation. Sustaining advantage requires continuous improvement, learning, and overcoming inertia to adapt strategies.
This document provides an overview of strategic management concepts from Chapter 9 of an introduction to management textbook. It discusses strategic management as comprising strategic analysis, formulation, and implementation to accomplish long-term goals. Key points covered include the levels of strategy (corporate, business, functional), Porter's five forces model, the BCG matrix for portfolio analysis, corporate strategies like growth and retrenchment, and Porter's framework for business strategies.
This document discusses the international product life cycle model and provides examples of how it applies to light bulbs and drones. The model describes how an industry evolves across borders over time. In developed nations, innovation and production stages occur as new products are invented and scaled for the domestic market. Products are then exported as markets become saturated. Manufacturing is later transferred to developing nations for lower costs. In developing nations, importation occurs initially due to lack of innovative capabilities. Mass consumption follows as demands increase, then local production of copied goods which are eventually exported to other countries.
The document discusses various international business strategies that companies can employ when expanding globally, including global, international, multi-domestic, and transnational strategies. It analyzes the pros and cons of each strategy based on the pressures of local responsiveness and cost reduction. Additionally, the document explores concepts like core competencies, economies of scale, and global learning which are important considerations for companies developing international business strategies.
This document discusses market segmentation, targeting, and positioning. It defines these concepts and identifies the four major categories of market segmentation: demographic, geographic, behavioral, and psychographic. The document also discusses how to choose attractive market segments by using a market attractiveness-competitive position matrix. It outlines three common targeting strategies: niche market, mass market, and growth market. Finally, it addresses the importance of global market segmentation and considering differences between countries.
The document discusses global strategies and how companies can globalize. It defines a global strategy as treating the world as a single market by standardizing products across countries. A multi-domestic strategy involves customizing products for each local market. Sources of competitive advantage from a global strategy include economies of scale, exploiting differences in resources between countries, and strategic flexibility. The document also discusses types of global strategies like foreign direct investment, joint ventures, contractual agreements, and licensing.
The document discusses strategy in international business. It covers topics like the role of strategy, industry structure and the five forces model, value creation through cost leadership and differentiation, global integration versus local responsiveness pressures, and the integration-responsiveness grid for measuring these pressures. The value chain and how it is configured and coordinated in response to changes is also examined. Different types of strategies are outlined, and future visions for strategies with concepts like metanational and cybercorp companies.
This document provides an overview of key concepts in global strategy formulation. It discusses factors that drive industry globalization and unique risks of operating globally. It examines different global strategies like standardized, tailored, and changed approaches. It also analyzes Walmart's transformation into a major global company through international expansion focused initially in Americas, then China. Walmart exploited buying power, domestic competencies, and learned through local adaptations in different market entries.
Competitive advantage comes from low costs or differentiation. Companies pursue cost leadership, differentiation, or focus strategies depending on their scope and basis of advantage. Cost leadership aims to have the lowest costs industry-wide while differentiation makes products unique. Focus involves serving a niche market better than competitors through low costs or differentiation. Sustaining advantage requires continuous improvement, learning, and overcoming inertia to adapt strategies.
This document provides an overview of strategic management concepts from Chapter 9 of an introduction to management textbook. It discusses strategic management as comprising strategic analysis, formulation, and implementation to accomplish long-term goals. Key points covered include the levels of strategy (corporate, business, functional), Porter's five forces model, the BCG matrix for portfolio analysis, corporate strategies like growth and retrenchment, and Porter's framework for business strategies.
This document discusses the international product life cycle model and provides examples of how it applies to light bulbs and drones. The model describes how an industry evolves across borders over time. In developed nations, innovation and production stages occur as new products are invented and scaled for the domestic market. Products are then exported as markets become saturated. Manufacturing is later transferred to developing nations for lower costs. In developing nations, importation occurs initially due to lack of innovative capabilities. Mass consumption follows as demands increase, then local production of copied goods which are eventually exported to other countries.
The document discusses various international business strategies that companies can employ when expanding globally, including global, international, multi-domestic, and transnational strategies. It analyzes the pros and cons of each strategy based on the pressures of local responsiveness and cost reduction. Additionally, the document explores concepts like core competencies, economies of scale, and global learning which are important considerations for companies developing international business strategies.
This document discusses market segmentation, targeting, and positioning. It defines these concepts and identifies the four major categories of market segmentation: demographic, geographic, behavioral, and psychographic. The document also discusses how to choose attractive market segments by using a market attractiveness-competitive position matrix. It outlines three common targeting strategies: niche market, mass market, and growth market. Finally, it addresses the importance of global market segmentation and considering differences between countries.
11 The Strategy of International BusinessBrent Weeks
To evaluate industry structure, firm strategy, and value creation
To profile the features and functions of the value chain
To assess how managers configure and coordinate a value chain
To explain global integration and local responsiveness
To profile the types of strategies firms use in international business
This document provides an overview and roadmap of key concepts for competing in foreign markets. It discusses why companies expand internationally, differences between countries that companies must consider, and different strategies for entering foreign markets such as exporting, licensing, franchising, multi-country strategies, and global strategies. The document also covers how to gain competitive advantages in foreign markets through efficiently locating production facilities and transferring capabilities between countries.
The document discusses the importance of vision and mission statements for businesses. It provides examples of vision statements from companies like Tyson Foods, General Motors, and PepsiCo. It also provides examples of mission statements from companies like Fleetwood Enterprises, Procter & Gamble, Dell, and L'Oreal. The document outlines the key benefits of having a clear mission statement, including better financial results, unanimity of purpose, and establishment of company culture. It emphasizes that developing vision and mission statements requires participation from managers to get commitment. The statements should balance specificity and generality to guide the company while allowing for growth.
International Marketing - The Political Environment: A Critical ConcernDr. John V. Padua
The political environment is a critical concern for international marketing. Governments control business activities within their borders and political instability can negatively impact foreign investment. Political risks include confiscation of assets, nationalism increasing restrictions on foreign companies, and violence/terrorism threatening operations. Marketers must consider how different government types, political parties, and policy shifts can affect their long-term ability to do business in a country.
Operational Effectiveness Is Not Strategy
Operational Efficiency
Competitive Strategy
Strategy Rests on Unique Activities
Origin of Strategic Position (3 Sources)
Variety /Need /Access-Based Positioning
A Sustainable Strategic Position Requires Trade-offs
Fit Drives Both Competitive Advantage and Sustainability
Rediscovering Strategy
External Challenges to Strategy
Traps for Shaping Strategy
06 International Trade and Factor MobilityBrent Weeks
To understand theories of international trade
To explain how free trade improves global efficiency
To identify factors affecting national trade patterns
To explain why a country’s export capabilities are dynamic
To understand why production factors, especially labor and capital, move internationally
To explain the relationship between foreign trade and international factor mobility
The document discusses strategy in international business. It covers topics like the role of strategy, industry structure and the five forces model, value creation through cost leadership and differentiation, global integration versus local responsiveness pressures, and the integration-responsiveness grid for measuring these pressures. The value chain and how it is configured and coordinated in response to changes is also addressed. Different types of strategies are outlined, and future visions for strategies with concepts like metanational and cybercorp companies.
The eclectic paradigm proposes that there are three main advantages that influence a firm's international production:
1) Ownership-specific advantages such as trademarks, production techniques, or entrepreneurial skills.
2) Location-specific advantages like raw materials, low wages, or taxes in a particular country.
3) Internalization advantages where firms choose to internally produce rather than through partnerships to exploit firm-specific advantages.
The paradigm also notes that the significance of these ownership, location, and internalization (OLI) advantages varies across industries, countries, and firms. It provides a framework to analyze what drives international production rather than making predictions.
There are multiple levels of strategy that companies employ. The corporate level strategy defines the business areas and overall vision of the organization. The business level strategy focuses on specific strategic business units and their competitive positions in distinct markets. Finally, the functional level strategy relates to individual departments like marketing, production, and human resources, and involves setting short-term objectives aligned with the business level strategy.
This document discusses various factors that influence international pricing strategies and decisions. It outlines analytical dimensions like production costs, exchange rates, and competition that managers consider. It also presents different pricing objectives such as market penetration or market skimming. The document then examines pricing policies like uniform pricing or market-by-market pricing. Finally, it analyzes environmental influences and provides alternatives for global pricing approaches.
This document provides an overview of international marketing. It defines international marketing and discusses how the marketing environment differs internationally from domestic markets due to factors like competition, regulations, culture, and politics. It also outlines various stages of international marketing involvement, from no direct foreign marketing to global marketing. Additionally, it discusses challenges like self-reference criterion and ethnocentrism that marketers must overcome to effectively adapt to foreign cultures.
Product decisions in International Marketing management includes market segment decision, positioning and communication decisions. The term product decision includes product strategy, product planning and product management.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc
This document provides an overview of global marketing communications decisions regarding advertising and public relations. It discusses key topics such as integrated marketing communications, global advertising approaches and challenges, advertising agencies and spending, creating global advertising campaigns, and the role of public relations internationally. The document aims to define important concepts, compare standardization versus adaptation strategies, examine cultural considerations, and explore best practices for selecting media and crafting effective communications across borders.
The document discusses various factors and strategies for foreign market entry decisions faced by firms. It covers evaluating which markets to enter based on size, growth rates, and product suitability. It also discusses timing of entry, scale of entry, and different modes of entry including exporting, contractual agreements like licensing and franchising, turnkey projects, contract manufacturing, management contracting, strategic alliances, joint ventures, consortia, and wholly owned subsidiaries. The optimal choice depends on a firm's needs around control, investment, risks, and location-specific advantages.
This is a project that I worked on with a group for my "Marketing Strategy" module in my masters of International Marketing and Communications. The main focus is on the process of internationalizing companies. This report answers the following questions:
- Is it necessary to go international?
- What are influential factors for internationalizing?
international strategic planning and market screeningshiva5717
This document discusses international strategic planning and market screening. It covers assessing a company's internal position through analyzing mission statements, competencies, and business unit performance. It also discusses assessing the external environment through analyzing industry trends, regional markets, countries, and competitors. The document outlines formulating strategic plans by integrating subsidiary plans into regional and global strategies. It concludes by discussing methods to evaluate political, economic, legal and other risks across different countries to screen markets.
The document provides an overview of key marketing concepts including definitions of marketing, needs and wants, products, markets, and the marketing mix. It discusses the marketing concept, relationship marketing, and different marketing strategies like Porter's generic strategies. Various frameworks for analyzing markets and customers are also introduced, such as PEST analysis, VALS system, and Maslow's hierarchy of needs.
This document discusses strategic choices and approaches that firms can take. It discusses the need for firms to have consistent strategies aligned with their situation to achieve goals. Several strategy options and approaches are described, including Porter's three generic strategies of cost leadership, differentiation, and focus. Ansoff's product/market matrix and the four strategic approaches it outlines are also summarized. Additional approaches from Glueck and Kotler are briefly described involving stability, expansion, retrenchment strategies and competitive positions respectively. Key criteria for evaluating strategies and common strategic alternatives are also provided.
International business lecture 1 - ppt notesRudreshSamant
The document discusses different mentalities that multinational corporations can take when internationalizing, including international, multinational, global, and transnational mentalities. It provides examples of strategies used by companies that exemplify each mentality. The transnational mentality is described as recognizing the importance of both responsive local operations and an international dimension through an integrated network of worldwide operations. Effective transnational companies may locate different activities like factories, call centers, marketing, and R&D in different regions to achieve efficiency and flexibility globally.
This case study is a great example of how Companies uses Strategic Management as the principle while forming any strategy for their business. It also showed how Apple, Kellogg's & Skoda used strategic management priciples like aims & objectives, planning & organizing, communication, different matrixes (BCG, GE9) to overcome all the hurdles and reach new heights.
International Strategic Management is an ongoing management planning process aimed at developing strategies to allow an organization to expand abroad and compete internationally.
An organization must be able to determine what products or services they intend to sell, where and how the organization will make these products or services, where they will sell them, and how the organization will acquire the necessary resources for these tasks. Even more importantly an organization must have a strategy on how it expects to outperform its competitors.
Countertrade involves exchanging goods or services for other goods or services instead of money, and can take several forms. It is used to address shortage of convertible currencies, liquidity problems, stimulate jobs and industry, and ensure future contracts. The main types of countertrade include barter (direct exchange), switch trading (involving three parties), counterpurchase (reciprocal buying agreements), buyback (partial payment through future plant output), compensation trade (part goods and part currency), and offset (future unspecified product purchase). An example is India's 2000 barter deal with Iraq to exchange wheat and rice for oil.
11 The Strategy of International BusinessBrent Weeks
To evaluate industry structure, firm strategy, and value creation
To profile the features and functions of the value chain
To assess how managers configure and coordinate a value chain
To explain global integration and local responsiveness
To profile the types of strategies firms use in international business
This document provides an overview and roadmap of key concepts for competing in foreign markets. It discusses why companies expand internationally, differences between countries that companies must consider, and different strategies for entering foreign markets such as exporting, licensing, franchising, multi-country strategies, and global strategies. The document also covers how to gain competitive advantages in foreign markets through efficiently locating production facilities and transferring capabilities between countries.
The document discusses the importance of vision and mission statements for businesses. It provides examples of vision statements from companies like Tyson Foods, General Motors, and PepsiCo. It also provides examples of mission statements from companies like Fleetwood Enterprises, Procter & Gamble, Dell, and L'Oreal. The document outlines the key benefits of having a clear mission statement, including better financial results, unanimity of purpose, and establishment of company culture. It emphasizes that developing vision and mission statements requires participation from managers to get commitment. The statements should balance specificity and generality to guide the company while allowing for growth.
International Marketing - The Political Environment: A Critical ConcernDr. John V. Padua
The political environment is a critical concern for international marketing. Governments control business activities within their borders and political instability can negatively impact foreign investment. Political risks include confiscation of assets, nationalism increasing restrictions on foreign companies, and violence/terrorism threatening operations. Marketers must consider how different government types, political parties, and policy shifts can affect their long-term ability to do business in a country.
Operational Effectiveness Is Not Strategy
Operational Efficiency
Competitive Strategy
Strategy Rests on Unique Activities
Origin of Strategic Position (3 Sources)
Variety /Need /Access-Based Positioning
A Sustainable Strategic Position Requires Trade-offs
Fit Drives Both Competitive Advantage and Sustainability
Rediscovering Strategy
External Challenges to Strategy
Traps for Shaping Strategy
06 International Trade and Factor MobilityBrent Weeks
To understand theories of international trade
To explain how free trade improves global efficiency
To identify factors affecting national trade patterns
To explain why a country’s export capabilities are dynamic
To understand why production factors, especially labor and capital, move internationally
To explain the relationship between foreign trade and international factor mobility
The document discusses strategy in international business. It covers topics like the role of strategy, industry structure and the five forces model, value creation through cost leadership and differentiation, global integration versus local responsiveness pressures, and the integration-responsiveness grid for measuring these pressures. The value chain and how it is configured and coordinated in response to changes is also addressed. Different types of strategies are outlined, and future visions for strategies with concepts like metanational and cybercorp companies.
The eclectic paradigm proposes that there are three main advantages that influence a firm's international production:
1) Ownership-specific advantages such as trademarks, production techniques, or entrepreneurial skills.
2) Location-specific advantages like raw materials, low wages, or taxes in a particular country.
3) Internalization advantages where firms choose to internally produce rather than through partnerships to exploit firm-specific advantages.
The paradigm also notes that the significance of these ownership, location, and internalization (OLI) advantages varies across industries, countries, and firms. It provides a framework to analyze what drives international production rather than making predictions.
There are multiple levels of strategy that companies employ. The corporate level strategy defines the business areas and overall vision of the organization. The business level strategy focuses on specific strategic business units and their competitive positions in distinct markets. Finally, the functional level strategy relates to individual departments like marketing, production, and human resources, and involves setting short-term objectives aligned with the business level strategy.
This document discusses various factors that influence international pricing strategies and decisions. It outlines analytical dimensions like production costs, exchange rates, and competition that managers consider. It also presents different pricing objectives such as market penetration or market skimming. The document then examines pricing policies like uniform pricing or market-by-market pricing. Finally, it analyzes environmental influences and provides alternatives for global pricing approaches.
This document provides an overview of international marketing. It defines international marketing and discusses how the marketing environment differs internationally from domestic markets due to factors like competition, regulations, culture, and politics. It also outlines various stages of international marketing involvement, from no direct foreign marketing to global marketing. Additionally, it discusses challenges like self-reference criterion and ethnocentrism that marketers must overcome to effectively adapt to foreign cultures.
Product decisions in International Marketing management includes market segment decision, positioning and communication decisions. The term product decision includes product strategy, product planning and product management.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc
This document provides an overview of global marketing communications decisions regarding advertising and public relations. It discusses key topics such as integrated marketing communications, global advertising approaches and challenges, advertising agencies and spending, creating global advertising campaigns, and the role of public relations internationally. The document aims to define important concepts, compare standardization versus adaptation strategies, examine cultural considerations, and explore best practices for selecting media and crafting effective communications across borders.
The document discusses various factors and strategies for foreign market entry decisions faced by firms. It covers evaluating which markets to enter based on size, growth rates, and product suitability. It also discusses timing of entry, scale of entry, and different modes of entry including exporting, contractual agreements like licensing and franchising, turnkey projects, contract manufacturing, management contracting, strategic alliances, joint ventures, consortia, and wholly owned subsidiaries. The optimal choice depends on a firm's needs around control, investment, risks, and location-specific advantages.
This is a project that I worked on with a group for my "Marketing Strategy" module in my masters of International Marketing and Communications. The main focus is on the process of internationalizing companies. This report answers the following questions:
- Is it necessary to go international?
- What are influential factors for internationalizing?
international strategic planning and market screeningshiva5717
This document discusses international strategic planning and market screening. It covers assessing a company's internal position through analyzing mission statements, competencies, and business unit performance. It also discusses assessing the external environment through analyzing industry trends, regional markets, countries, and competitors. The document outlines formulating strategic plans by integrating subsidiary plans into regional and global strategies. It concludes by discussing methods to evaluate political, economic, legal and other risks across different countries to screen markets.
The document provides an overview of key marketing concepts including definitions of marketing, needs and wants, products, markets, and the marketing mix. It discusses the marketing concept, relationship marketing, and different marketing strategies like Porter's generic strategies. Various frameworks for analyzing markets and customers are also introduced, such as PEST analysis, VALS system, and Maslow's hierarchy of needs.
This document discusses strategic choices and approaches that firms can take. It discusses the need for firms to have consistent strategies aligned with their situation to achieve goals. Several strategy options and approaches are described, including Porter's three generic strategies of cost leadership, differentiation, and focus. Ansoff's product/market matrix and the four strategic approaches it outlines are also summarized. Additional approaches from Glueck and Kotler are briefly described involving stability, expansion, retrenchment strategies and competitive positions respectively. Key criteria for evaluating strategies and common strategic alternatives are also provided.
International business lecture 1 - ppt notesRudreshSamant
The document discusses different mentalities that multinational corporations can take when internationalizing, including international, multinational, global, and transnational mentalities. It provides examples of strategies used by companies that exemplify each mentality. The transnational mentality is described as recognizing the importance of both responsive local operations and an international dimension through an integrated network of worldwide operations. Effective transnational companies may locate different activities like factories, call centers, marketing, and R&D in different regions to achieve efficiency and flexibility globally.
This case study is a great example of how Companies uses Strategic Management as the principle while forming any strategy for their business. It also showed how Apple, Kellogg's & Skoda used strategic management priciples like aims & objectives, planning & organizing, communication, different matrixes (BCG, GE9) to overcome all the hurdles and reach new heights.
International Strategic Management is an ongoing management planning process aimed at developing strategies to allow an organization to expand abroad and compete internationally.
An organization must be able to determine what products or services they intend to sell, where and how the organization will make these products or services, where they will sell them, and how the organization will acquire the necessary resources for these tasks. Even more importantly an organization must have a strategy on how it expects to outperform its competitors.
Countertrade involves exchanging goods or services for other goods or services instead of money, and can take several forms. It is used to address shortage of convertible currencies, liquidity problems, stimulate jobs and industry, and ensure future contracts. The main types of countertrade include barter (direct exchange), switch trading (involving three parties), counterpurchase (reciprocal buying agreements), buyback (partial payment through future plant output), compensation trade (part goods and part currency), and offset (future unspecified product purchase). An example is India's 2000 barter deal with Iraq to exchange wheat and rice for oil.
Dumping occurs when a country exports a product at a lower price in the foreign market than it charges in its domestic market. It has been practiced since the 16th century and can be sporadic, predatory, or persistent. It is done to gain market share, eliminate competition, or get rid of excess inventory. Dumping harms domestic industries and can lead to job losses and trade disputes between countries. The WTO oversees whether dumping is unfair competition. Countries like the US and EU impose tariffs through anti-dumping investigations conducted by designated authorities to counter the effects of dumping. India has filed 272 anti-dumping cases, with 149 against China, involving chemicals, pharmaceuticals, textiles, metals and
This document summarizes key concepts from the book "Positioning: The Battle for Your Mind" by Al Ries and Jack Trout. It discusses how marketing strategies can be informed by lessons from military warfare. The authors outline four marketing strategies - defensive, offensive, flanking, and guerrilla warfare - and provide examples of how companies like Coca-Cola, McDonald's, and IBM employed these strategies in competition. The document also discusses characteristics of an effective "marketing general" to develop strategy.
Dumping refers to exporting goods at a price lower than their normal value. There are different types of dumping like persistent and predatory dumping which aim to drive foreign competitors out of business. Anti-dumping measures impose duties on dumped imports to counteract the trade distorting effects and re-establish fair trade. Investigations consider various factors to determine if dumping has occurred and calculate appropriate duties. While protectionism is debated, anti-dumping aims to ensure fair competition in international trade according to WTO agreements.
Business management is complex and requires successfully managing multiple functional areas. There are several key functional areas that must be effectively managed for a business to achieve its goals. These include finance, human resources, administration, production/services, marketing, sales, customer service, and research and development. Each functional area plays an important role like finance which deals with spending and receipts, human resources which deals with employees, and production which focuses on transforming raw materials into finished goods for manufacturing businesses.
Divisional structure is used by large companies with multiple product lines or geographical locations. The organization is divided into autonomous business units, with each unit responsible for a specific product or customer segment. There are two main types of divisional structures: product divisionalization, where each division is responsible for a separate product line; and territorial divisionalization, where divisions are based on geographical regions. Divisional structures allow each business unit to operate independently while benefiting from centralized corporate resources and management oversight.
Sociology is the scientific study of human social behavior and society. It examines how people interact with each other and how they organize themselves into larger social groups. Some key aspects of sociology covered in the document include:
- Sociology studies social interactions, social organizations, social change, social structure, and social relationships.
- The origins and emergence of sociology are traced back to the Industrial Revolution and the works of early theorists like Comte, Marx, Durkheim, and Weber.
- There are different approaches to sociology including evolutionary, interactionist, functionalist, and conflict approaches.
- Culture refers to the learned behaviors, beliefs, attitudes, and norms that are shared by a
Idris Mootee, CEO of Idea Couture Inc., gave a lecture at the Ivey School of Business on global strategy and innovation. He discussed how the world is becoming increasingly hyper-connected and how industries are converging. He argued that companies must think globally to find growth opportunities, noting that emerging markets like China and India present enormous potential customers and talent. However, companies must understand local needs and adapt locally to succeed globally. Mootee suggested companies pursue a balanced approach of global integration and local responsiveness in their strategies.
What are the various strategies adopted by the companies in today's world of competition, how they will succeed in long run, what they want to achieve & how can they achieve??
It is all about strategies adopted , Let us learn them out
All societies use social control to promote order. There are two types: internal control developed during socialization, and external control using rewards/punishments. Control theory examines how social institutions like family and education impose control to prevent deviance. Containment theory and social bond theory suggest control is maintained when people are properly socialized and have strong bonds to conventional institutions through attachment, commitment, involvement, and beliefs. Without these bonds, deviance increases.
The document discusses various elements of management control systems including strategic planning, budgeting, performance measurement, and responsibility centers. It defines management control as a process that ensures resources are deployed effectively to meet organizational objectives. Key aspects of management control systems include setting goals and standards, measuring performance, evaluating results, and taking corrective actions. Management control differs from task control in its focus on coordination across organizational units to implement strategies.
Planning involves setting goals and determining how to accomplish them. Key terms in planning include goals, objectives, and strategies. The planning process involves establishing goals, defining the present situation, identifying factors that help or hinder goals, and developing plans of action. Managers use strategic plans for long-term needs and operational plans to implement strategies. Control involves measuring performance, comparing results to standards, and taking corrective action if needed. Control systems help ensure the right things happen at the right time through feedforward, concurrent, and feedback controls.
Foreign direct investment (FDI) occurs when a firm invests directly in facilities to produce or market a product in a foreign country. There are three main types of FDI: acquiring or merging with a foreign firm, creating a new 'greenfield' operation abroad, or establishing a foreign subsidiary. FDI gives firms significant control over their foreign operations and allows them to affect managerial decisions. FDI has increased over the last 20 years as globalization has expanded firms' visions of foreign markets and circumvented some trade barriers. However, FDI declined sharply in 2001-2002 due to economic slowdowns and geopolitical uncertainty.
1) Michael Porter's Diamond Model analyzes factors of production, demand conditions, related and supporting industries, and firm strategy/rivalry that contribute to a nation's competitive advantage.
2) Examples include India's BPO sector benefiting from skilled labor and Japan's auto industry improving through domestic rivalry.
3) International strategies include multi-domestic, with decentralized control tailored to local needs, global with standardized products worldwide, and transnational seeking both global efficiency and local responsiveness.
The document discusses the importance of gratitude and appreciation. Practicing gratitude has been shown to improve mental and physical health by reducing stress and increasing happiness. Expressing thanks to others strengthens relationships and social bonds.
This document discusses strategic management concepts related to international business strategies. It covers several key points:
1. It outlines learning outcomes related to assessing international market potential, identifying sources of competitive advantage, distinguishing international strategy types, and evaluating market entry options.
2. It introduces frameworks for international strategy and the difference between international versus global strategies.
3. It discusses strategic motives for entering foreign markets such as accessing new customers, exploiting core competencies, achieving lower costs, and spreading business risk.
Organization structure in international businessCitibank N.A.
The document discusses different types of organizational structures used in international business. It describes centralization versus decentralization and the tradeoffs of each. There are five main types of organizational structures covered: functional structure, international division structure, product division structure, geographic (area) division structure, and matrix division structure. Each structure has advantages and disadvantages for coordinating and responding to activities in different markets and geographies.
The document outlines different types of attack strategies that can be used against competitors, including frontal attacks, flank attacks, encirclement attacks, bypass attacks, guerrilla attacks, and combinations of different strategies. It discusses when different attack strategies would be most effective based on factors like market homogeneity, brand equity, product differentiation, and customer loyalty.
The document discusses various offensive and defensive competitive strategies that multinational companies use. Offensive strategies include direct attacks, end-runs, and preemptive strikes aimed at competitors' weaknesses. Defensive strategies seek to lessen risk of attack and blunt any attacks by blocking avenues of offense and preparing strong counterattacks. Both types of strategies aim to achieve or maintain competitive advantage in the market.
This document summarizes key concepts related to global strategy and implementation for international business. It discusses industry structure, the value chain framework, strategic alternatives like the international, multidomestic, global and transnational strategies, and the pressures of global integration versus local responsiveness. Managers must configure and coordinate a firm's value chain activities in light of industry forces and balance pressures for standardization with responsiveness to local conditions. The value chain and strategic options framework help evaluate strengths and opportunities for creating value across borders.
The document discusses strategic management in international business. It explains that strategic management involves formulating, implementing, and evaluating strategies to achieve a firm's objectives and increase profits through international expansion. The strategic management process involves scanning the global environment, formulating strategies, implementing changes, and measuring performance. Key ways for firms to increase profitability include acquiring brands, realizing experience curve benefits, achieving location economies, and building core competencies.
the strategy of international business 1ssuser1832db
This document discusses strategies for international business. It covers several key points:
1) Industry structure and the five forces model influence a firm's strategic options. Cost leadership and differentiation are two basic strategies for creating value within an industry.
2) The value chain describes a firm's activities for designing, producing, and distributing products. Factors like configuration, costs, logistics, and customer needs influence how a firm organizes its value chain.
3) Coordination and core competencies are important for connecting activities in the value chain, whether within one country or many. Experience and learning effects can help firms cut costs over time.
4) Forces of global integration and local responsiveness create pressures on mult
This document is from a chapter in an international business textbook. It discusses strategies that firms use in international business. The chapter objectives are to identify how managers develop strategy, examine industry structure and firm strategy, assess how managers configure and coordinate a value chain, explain global integration and local responsiveness, and profile types of strategies firms use internationally. The chapter discusses concepts like the five forces model, value creation through cost leadership and differentiation, and pressures for global integration versus local responsiveness. It also profiles different types of strategies firms may use, as well as potential future evolutions in the world of strategy types.
The document summarizes strategies that firms can pursue when competing internationally. It discusses four main strategies: global standardization, localization, transnational, and international. The global standardization strategy focuses on cost reductions through economies of scale. The localization strategy focuses on customizing products for local markets. The transnational strategy aims to achieve both low costs and product differentiation. The international strategy involves selling domestic products abroad with minimal changes. Firms must choose a strategy based on pressures for cost reductions and local responsiveness in their industry.
The document discusses strategies for international business. It defines key concepts:
- Strategy refers to actions managers take to increase profitability and profit growth.
- Profitability is the rate of return on invested capital. Firms can increase this through adding value, lowering costs, selling more, or expanding internationally.
- Operations are configured through a value chain of activities like production, marketing, and R&D. Firms group these as primary or support activities.
- International expansion allows firms to access new markets, realize location economies, benefit from experience effects, and transfer skills globally.
Chapter EightGlobal Strategy and Organization.docxchristinemaritza
Chapter Eight
Global Strategy and Organization
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Chapter ObjectivesLearn about the integration- responsiveness frameworkDistinctive MNE strategies emerging from the frameworkOrganizational arrangements associated with the MNE strategiesUnderstanding how to build a transnational MNE
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Opening Case –
IKEA’s Global StrategyIKEA’s operations encompass 35 nations, 240 stores, 100000 employees, 20 franchises, 2,000 suppliersIKEA’s strategyoffers Scandinavian design quality furniture at low prices. 90 percent of the product line is standardized around the world, the product development, purchasing, and warehousing are consolidated at its headquarters in Sweden. target segment is families with limited income and limited living space IKEA’s Organizationhas an informal corporate culture, with few titlesstores maintain direct contact with IKEA headquarters for speedy decision making and easy globalization. Managers rely on a consensus building approach, and readily share their knowledge and skills with coworkers.
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The Role of Strategy in International ContextThree Objectives (Bartlett and Ghoshal)Efficiency: achieving cost leadership. Flexibility: developing responsiveness to the diversity and volatility of different country environments. Learning: the ability to learn from international exposure and leverage learning on a worldwide basis. MNEs find it challenging to achieve all three objectivesThe US firms have excelled in achieving efficiency via scale economies and standardized products, building on the large domestic market base. The European firms have succeeded by being locally responsive, building on the diversity of the European nations. The East Asian firms have succeeded by tapping international learning from and across various nations, and leveraging that worldwide.
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The Integration- Responsiveness FrameworkGlobal integration: coordination of the MNE’s value chain activities across nations to achieve worldwide efficiency, synergy, and cross-fertilization. focus is on convergent customer needs, competitive environments, functional imperatives, and operating systems across nations. strategic decisions are made on a global basis, to avoid the costs of adapting to local situations.Local responsiveness:flexibility towards country-specific situations, needs, and opportunities. focus is on adaptation, accommodation, and adjustment to country-specific customer needs, competitive environment, functional imperatives, technological capabilities, and operating systems. strategic decisions made on a local basis, to assure entrepreneurial flexibility and cultural responsiveness.
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Global business strategies
Home replication
Strategy
Global
Strategy
Transnational
Strategy
Multi-local
Strategy
High
High
Low
Low
Pressures for
Local Responsiveness
Pressures for
Global Integration/
Cost Reduction
*
Globalization Drivers in an Industry (George Yip, 2003)Market Drivers: Consumer li ...
IAF605 week 8 the strategy of international businessIAF605
The chapter discusses the role of strategy in international business. It examines how industry structure and competitive forces impact firm strategy and performance. Managers develop strategy to attract customers, operate efficiently, and compete effectively. The value chain framework helps managers analyze how the company creates value through primary and support activities. Firms face pressures for global integration to benefit from efficiencies but also pressures for local responsiveness to address host country needs. Different industry types and strategy types determine a firm's appropriate integration-responsiveness approach. The homework is to review exam performance, chapter 11, and prepare for chapter 12 by reading the case study on Burger King.
The degree of decentralization depends on the
strategy and the company's culture.
11-49
Step 4: Establish Coordinating
Mechanisms to Integrate Efforts
Coordinating mechanisms are needed to
Integrate activities of different units
Ensure consistency of efforts
Avoid duplication and gaps
Resolve conflicts
Examples of coordinating mechanisms:
Cross-functional teams
Matrix structures
Liaison roles
Integrating roles of top managers
11-50
Fig.
This document discusses international business strategy. It explains that firms can increase profits through international expansion by leveraging existing products abroad, taking advantage of location economies by dispersing value chain activities globally, and benefiting from experience effects and economies of scale from serving larger markets. However, firms also face pressures for local responsiveness in different markets due to variations in customer tastes, practices, infrastructure and government demands. The optimal strategy depends on balancing pressures for cost reductions through standardization with pressures for local adaptation. The document analyzes four main strategic approaches: global standardization, localization, transnational and international.
This document introduces learning outcomes around strategy, strategic management, and strategic decision making. It defines strategy, discusses the characteristics and implications of strategic decisions, and explains the different levels of strategy from corporate to business to operational. It also covers strategic business units, the vocabulary of strategy using examples, and introduces the key elements of the strategic management model.
1) The document discusses strategies for international business, including global standardization, localization, transnational, and international strategies. It analyzes when each strategy is most appropriate based on pressures for cost reduction and local responsiveness.
2) Key factors that determine appropriate strategies are differences in consumer tastes, infrastructure, distribution channels, and government demands across countries. Pursuing economies of scale while responding to local differences is also discussed.
3) Managers must choose a strategy that positions their operations to both lower costs through global integration while also adapting products to local markets. The optimal strategy depends on the industry and competitive environment firms face.
This document discusses strategic management concepts including the strategic management process, competitive advantage, and strategic competitiveness. It covers three key aspects: vision and mission statements which specify an organization's goals and objectives; stakeholders which are individuals and groups that can impact an organization's strategic outcomes; and strategic leaders who use the strategic management process to help an organization achieve its vision.
Procter & Gamble pursued a diversification strategy through the acquisition of Gillette in 2005. This aimed to create synergies by combining complementary product lines like toothbrushes and toothpaste that targeted different gender markets. However, integrating the cultures and decision-making processes between the companies proved more difficult than expected. Diversification can create value through economies of scope from related businesses sharing activities or transferring core competencies. But actual synergies are not always realized as planned when integrating acquisitions.
This document provides an overview of Unilever's strategic management process and strategic leadership. It discusses Unilever's vision and mission statements, which focus on sustainability leadership and meeting consumer needs. Porter's generic competitive strategies of cost leadership and differentiation are explained. The document also evaluates strategic frameworks like emergent vs. intended strategies and the risks of being "stuck in the middle." Students are assigned a case study analysis of Unilever's business strategy using Porter's model and a critical evaluation of the model's advantages and limitations.
This document provides an overview of business-level strategy. It defines business-level strategy as an integrated set of commitments and actions a firm uses to gain a competitive advantage in specific product markets. The chapter discusses the relationship between customers and business-level strategies in terms of who the firm serves, what needs it satisfies, and how it satisfies those needs. It explains the differences between cost leadership, differentiation, and focused cost leadership/differentiation strategies. The risks and benefits of each strategy are also described.
International Competitive Strategy
Chapter 9
1
9-2
Learning Objectives
LO 9-1 Explain international strategy, competencies, and international competitive advantage.
LO 9-2 Describe the steps in the global strategic planning process.
LO 9-3 Explain the purpose of mission statements, vision statements, values statements, objectives, quantified goals, and strategies.
LO 9-4 Explain home replication, multidomestic, global, regional, and transnational strategies and when to use them.
LO 9-5 Describe the methods of and new directions in strategic planning.
What is International Strategy?
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.
decisions about which markets to enter with which products, when and how
all the various functions and activities of the company and how they interact
ensuring that strategy is consistent across functions, products, and regional units
a variety of unique demands associated with operating internationally
3
International Strategy
The goal is to achieve and maintain a unique and valuable position both within a nation and globally:
IOW: Have a competitive advantage
Competitive advantage is the ability of a company to have higher rates of profits than its competitors
4
Competitive Advantage
To create a sustainable competitive advantage, a company tries to develop skills and control resources 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
5
Competitive Advantage and International Companies
The challenge for international companies is that:
Resources are always scarce.
There are many alternatives for using these scarce resources
(for example, which foreign markets to enter).
These alternatives are not equally attractive.
Could be more costs or other risks involved
Competitive Advantage and International Companies
Managers must make choices regarding what to do, and what not to do, now and over time.
Companies make different choices, which have implications for each company’s ability to meet the needs of customers and create a defensible competitive position internationally.
Without adequate planning, managers are more likely to make decisions that do not make good sense competitively.
9-8
The Competitive Challenge Facing Managers of International Businesses
Managers must
quickly identify and exploit opportunities wherever they occur, domestically and internationally
fully understand why, how, where, and when to do business in specific world markets
know the company’s strategic mission, its strengths and its weaknesses
Global Strategic Planning:
Why Plan Globally?
Provides a means for top management to
Identify opportunities and threats
Formulate strategie.
This chapter discusses global strategy and competing around the world. It defines key terms like globalization, multinational enterprises, and foreign direct investment. It explains why companies compete abroad and evaluates the advantages and disadvantages. It also describes the four main strategies that multinational enterprises can pursue when competing globally: international strategy, localization strategy, global standardization strategy, and transnational strategy. Finally, it discusses why certain industries tend to be more competitive in specific countries and the relationship between location within industry clusters and competitive advantage.
This document discusses strategies for managing a diversified group of businesses. It covers when companies should diversify, related vs unrelated diversification, and various strategies for entering new businesses such as acquisition, internal startups, and joint ventures. The benefits and drawbacks of related and unrelated diversification are presented. The document also discusses evaluating diversification strategy and options for allocating resources after a company has diversified.
In this presentation you will learn about demand of a product in the market and demand forecasting, means how demand of a particular product is determined in the market
This document discusses demand forecasting techniques. It defines demand as the quantity of a commodity that consumers are willing and able to buy at different prices over time. Demand forecasting refers to using historical data and other information to estimate future customer demand. There are different levels of forecasting including micro, meso, and macro levels focusing on specific products, product groups, or overall market demand respectively. Qualitative and quantitative techniques are classified, with qualitative relying on expert opinions and surveys in the absence of data, and quantitative analyzing past numerical sales data to identify patterns. Specific qualitative methods outlined include buyer surveys, expert panels, Delphi method, and market experiments. Quantitative methods discussed trend projection analyzing long-term historical demand trends.
The document discusses the differences between finance and accounting careers. Finance focuses on decision making using financial statements, economics, statistics, and management. Common finance careers include commercial and investment banking, real estate, corporate finance, insurance, and consulting. The document then provides examples of main activities in various finance careers such as valuation, risk management, research, and portfolio management.
This document discusses various strategic options for companies beyond competitive strategy, including strategic alliances, mergers and acquisitions, vertical integration, and outsourcing. It provides an overview of each strategy and considers when each option may provide benefits to a company, as well as potential disadvantages. The document also addresses how companies can capture value from strategic alliances over time and the challenges that can cause alliances or mergers to fail.
Sukanya Kumari Srivastava is seeking a career that provides diverse assignments and working with high caliber people. She has an MBA from Galgotias University and a B.A from V.K.S University. She completed a summer internship at Tata Power where she analyzed employee engagement and behavior. Her computer skills include MS Office programs and she has strengths in teamwork, goal orientation, and integrity.
M.D. Faisal provides his contact information and career objective of seeking a stable job to utilize his skills and qualifications. He has an MBA from M.T.U Institute of Management and a BBA from Jamia Hamdard University. He has over 5 years of experience in financial services and insurance. His duties would include developing business through personal loans, credit cards, and other services. He provides additional personal details and declares that all information provided is accurate.
The document is a presentation on a summer training project report for Athena Demwe Power Limited. The objectives of the study were to identify sources of financing for the Indian power sector and analyze the company's financial statements. Ratio analysis of the company's debt-equity ratio, return on equity, return on investment, and net profit margin from the previous to current year showed mostly small increases, indicating the company's financial strength grew slightly. Key findings were that most state electricity boards operate at a loss due to issues like power theft and outdated practices, and there is still a significant demand-supply gap in the Indian power sector despite increased generation.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.
The simplified electron and muon model, Oscillating Spacetime: The Foundation...RitikBhardwaj56
Discover the Simplified Electron and Muon Model: A New Wave-Based Approach to Understanding Particles delves into a groundbreaking theory that presents electrons and muons as rotating soliton waves within oscillating spacetime. Geared towards students, researchers, and science buffs, this book breaks down complex ideas into simple explanations. It covers topics such as electron waves, temporal dynamics, and the implications of this model on particle physics. With clear illustrations and easy-to-follow explanations, readers will gain a new outlook on the universe's fundamental nature.
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar Kanvaria
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How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
2. Learning Objectives
To evaluate industry structure, firm
strategy, and value creation
To profile the features and functions of the
value chain
To assess how managers configure and
coordinate a value chain
To explain global integration and local
responsiveness
To profile the types of strategies firms use
in international business
11-2
5. Industry Structure
Industry structure involves the
relationships among
Suppliers of inputs
Buyers of outputs
Substitute products
Potential new entrants
Rivalry among competing firms
11-5
6. Industry Change
Industry structure changes because of
Competitor moves
Government policies
Shifting preferences
Technological developments
11-6
7. Industry Structure,
Strategy, and Value
The industry organization (IO)
paradigm
presumes that markets demonstrate perfect
competition where no firm or industry
consistently outperforms others
The power of innovative executives
bright executives exploit market imperfections
to outperform rivals
Strategy’s hallmarks
Value
Strategy
11-7
8. Creating Value
Value
the measure of a firm’s capability of selling
what it makes for more than the costs incurred
to make it
Create value using
A cost leadership strategy
make products for a lower cost than
competitors
A differentiation strategy
make products for which consumers are
willing to pay a premium price
11-8
9. The Firm as a Value Chain
Learning Objective 2:
To profile the features and functions of the
value chain
11-9
10. The Firm as a Value Chain
The value chain
the set of linked activities the company performs to
design, produce, market, distribute, and support a
product
The value chain consists of
Primary activities
design, make, sell, and deliver the product
Support activities
implement primary activities
Profit Margin (Value = TR-TC)
Value Chain Orientation
Upstream and Downstream Activities
11-10
11. The Firm as a Value Chain
Primary and Support Activities
11-11
12. The Firm as a Value Chain
Primary and Support Activities of the Value Chain
11-12
13. Managing the Value Chain
Learning Objective 3:
To assess how managers configure and
coordinate a value chain
11-13
14. Managing the Value Chain
Configuration
distributing value chain activities around the
world
concentrated
putting all value chain activities in one
location
dispersed
performing different value chain activities
in different locations
location economies
11-14
15. Managing the Value Chain
When configuring the value, consider
The business environment
Innovation context
Resource costs
Logistics
Digitization
Scale economies
Cluster effects
Customer needs
11-15
16. Managing the Value Chain
Coordination
linking the value chain activities
Factors that influence coordination
Operational obstacles
National cultures
Core competencies (Learning Effects &
Experience Curve)
special outlook, skill, capability, or technology
that runs through the firm’s operations,
threading disconnected activities into an
integrated value chain
Subsidiary networks
social networks
11-16
17. Change and the Value Chain
The configuration and coordination of a
value chain responds to changes in
customers, competitors, industries, and
environments
Even a well configured and coordinated value
chain can become obsolete
So, designing and delivering a strategy
should be an ongoing process
11-17
18. Global Integration vs.
Local Responsiveness
Learning Objective 4:
To explain global integration and local
responsiveness
11-18
19. Global Integration vs.
Local Responsiveness
Firms face two conflicting pressures:
Pressures for global integration
the process of combining differentiated parts
into a standardized whole
maximize efficiency
Pressures for local responsiveness
the process of disaggregating a standardized
whole into differentiated parts
optimize effectiveness
11-19
20. Pressures for Global Integration
Drivers of global integration
The globalization of markets
Technology helps standardize consumer
preferences
Global products have become popular
allows for standardization of product
design
The efficiency gains of standardization
Location, scale, and learning effects
WTO supports global standards
11-20
21. Pressures for Local
Responsiveness
Pressure for local responsiveness is driven
by
Consumer divergence
cultural predisposition
historical legacy
nationalism
Host government policies
fiscal, monetary, and business regulations
11-21
25. International Strategy
International strategy
leverage a company’s core competencies into
foreign markets
critical elements of the value chain are
centralized at headquarters
The strategy works well when
the firm has core competencies that foreign
rivals lack
there is low pressure for global integration
there is low pressure for local responsiveness
11-25
26. Multidomestic Strategy
Multidomestic strategy
emphasizes responsiveness to the unique
circumstances that prevail in a country’s
market
value added activities are adapted to local
markets
The strategy works well when
there is high pressure for local responsiveness
there is low pressure for global integration
11-26
27. Global Strategy
Global strategy
make standardized products that are marketed
with little adaptation to local conditions
exploit location economies and capture scale
economies
The strategy works well when
the MNE is the cost leader
there is low pressure for local responsiveness
there is high pressure for global integration
11-27
28. Transnational Strategy
Transnational strategy simultaneously
leverages core competencies worldwide,
reduces costs by exploiting location
economics, and adapts to local conditions
The strategy works well when
global learning and knowledge flows are
emphasized
there is high pressure for local responsiveness
there is high pressure for global integration
11-28
Editor's Notes
The Strategy of International Business
The Learning Objectives for this chapter are To evaluate industry structure, firm strategy, and value creation To profile the features and functions of the value chain To assess how managers configure and coordinate a value chain To explain global integration and local responsiveness To profile the types of strategies firms use in international business
This Figure shows how a firm’s strategy is influenced by outside forces. In particular, the environment for multinational companies is shaped by cultural, political, legal, economic, trade, monetary, governmental, and institutional forces. The goal for managers is to design a strategy that allows the company to compete successfully in international markets and sustain its growth.
Learning Objective 1: To evaluate industry structure, firm strategy, and value creation.
An industry is composed of those companies engaged in a particular type of enterprise. How an industry is structured influences the profitability of companies, particularly in situations where there is perfect competition. Industry structure involves the relationships among suppliers of inputs, buyers of outputs, substitute products, potential new entrants, and rivalry among competing firms.
Does industry structure change? Yes, many things can prompt a change including new products, new firms, new markets, and new managers. If changes are significant, firms may have to reassess their strategy.
Perfect competition presumes many buyers and sellers such that no individual affects price or quantity, there is perfect information for both producers and consumers, that there are few, if any, barriers to entry and exit, that full mobility of resources exists, and that firms and buyers have perfect knowledge. Do perfect markets exist? Well, most industries aren’t perfect, and companies typically have different levels of profitability. In fact, industries that are most attractive typically have imperfect competition that allows companies to seek above-average profits. It is in these industries that the power of innovative executives becomes so apparent as they devise strategies that create value. Strategy can help managers assess a company’s position, identify where it should go, and determine how to get there.
Companies create value using either a cost leadership strategy or a differentiation strategy. The former reduces costs below those of competitors for a given level of quality, while the latter involves developing products that customers value and that rivals find hard, if not impossible, to match or copy. Another way to think about the two approaches is that a differentiation strategy focuses on innovation while a cost leadership strategy emphasizes efficiency.
Learning Objective 2: To profile the features and functions of the value chain.
Regardless of which strategy a firms uses, cost leadership or differentiation, it can be helpful to think of the value creation process using the value chain. The value chain separates the notion of “creating value” into a series of discrete, sequential activities.
This Figure shows the different primary and support activities in the value chain.
This Table provides details on the different activities that make up the primary and support activities in the value chain.
Learning Objective 3: To assess how managers configure and coordinate a value chain.
Multinational companies have to efficiently distribute value activities and link them effectively. This can be done using a concentrated strategy or using a dispersed approach. The goal is to put value activities in the optimal location in the world to exploit location economies - the economies that arise from performing a value activity in the most productive location or locations given prevailing economic, political, legal, and cultural conditions.
What influences the configuration of the value chain? Several things do including the quality of the business environment, innovation context, resource costs, logistics, digitization, and scale economies. The business environment can affect the ease of doing business. Generally, it easiest to do business in high income countries. Innovation context is important because going forward, the pace of innovation accelerates. In fact, the singularity principle suggests that the change will be so fast that it will seem to be expanding at infinite speed. Resource costs like wage rates, worker productivity, resource availability, inflation rate, Government Regulations, and so on can also affect the configuration of the value chain. Logistics refers to how companies obtain, produce, and exchange material and services in the proper place and in proper quantities for the proper activity. Companies try to minimize the expense associated with logistics. Digitization involves converting an analog product into a string of zeros and ones. Digital activities can be located just about anywhere, and in fact today it’s allowing activities to be dispersed that had always been concentrated in a few locations. X-rays can now be taken in one country and read in another. Similarly, legal services can be outsourced to optimal locations. Finally, firms want to gain economies of scale where possible. This often requires companies to concentrate the value chain.
Once the firm has worked out the best configuration of the value chain, it must work on linking the various activities. This is known as coordination. Several factors influence coordination. Operationally, companies must deal with different languages, time zones, and so on as they pull together the different parts of the global value chain. While still quite challenging, improvements in communication have made this task easier today. A firm’s core competencies also affect coordination. Keep in mind that this special ability, outlook, or skill can emerge from different areas in the firm. For example, a firm’s core competencies may be a result of product development or employee productivity. Similarly, a firm may have core competencies in manufacturing expertise, marketing, or leadership. Finally, it’s important to consider the role of subsidiaries. The Internet and the real time connectivity it provides has changed the nature of this process. Today, information can flow easily between subsidiaries and the different parts of the value chain allowing for much greater and richer coordination. Firms have even embraced the power of social networks as a means of improving coordination.
Once the value chain is configured and coordinated, it’s time to consider change. Managers need to view the value chain and its configuration as a fluid concept – one that could change at any point depending on the factors that influence it. Some managers are able to anticipate change and adapt accordingly. For others, it’s an ongoing struggle.
Learning Objective 4: To explain global integration and local responsiveness.
When firms develop their strategies they face two conflicting pressures. On one hand they have pressure to standardize and concentrate configuration. On the other hand, they face pressure to disperse configuration and adapt coordination.
When there are strong pressures for global integration, firms will need to concentrate configuration and standardize coordination. The globalization of markets along with the efficiency gains that come with standardization are two main drivers of global integration. Standardization is attractive because of the cost savings it creates for both the firm and the consumer.
Despite the benefits of global integration, firms may find that there is considerable pressure to be locally responsive. A major reason to be locally responsive is the need to respond to consumer preferences. Consumers may be willing to pay a premium to get what they really want. In some case, local government policies dictate certain strategies.
This Figure shows how different industries fall in the integration/responsiveness grid. Managers can use the IR grid to determine strategy based on the different pressures they are facing.
Learning Objective 5: To profile the types of strategies firms use in international business.
There are four generic strategies used by multinational companies: the international, multidomestic, global, and transnational strategies.
The international strategy works well when the multinational has a core competency that foreign rivals lack, and pressures for local responsiveness and for global integration are both low. However, because key aspects of the value chain are centralized at headquarters there is little input from foreign markets and opportunities may be missed.
The multidomestic strategy makes sense when pressures for local responsiveness are high, and those for global integration are low. Because it involves adapting value added activities to local market conditions, it is a costly strategy to implement.
The global strategy works well when worldwide standardization is possible. This is usually the case for commodities, for example. However, keep in mind that because it emphasizes cost reductions is does not allow for local responsiveness, a situation that can be problematic if market conditions change.
Companies following a transnational strategy balance the conflicting pressures for local responsiveness with those for global integration. They emphasize global learning and the diffusion of knowledge throughout the organization. Keep in mind that while this strategy seems to allow firms to get the best of both worlds, it’s complicated and difficult to implement.