The document discusses analyzing a company's general environment and sources of competitive advantage. It examines factors like economics, demographics, politics/law, and technology on a global scale. It also outlines different types of competitive advantages like cost leadership, differentiation, and competitive scope. Cost leadership is defined as having a cost-conscious culture and limiting waste and perks. Alignment of vehicles, arenas, differentiators, and economic logic are suggested for pursuing a low-cost strategy globally.

4. General Environment AnalysisAnalyze minimum number of factorsEconomicDemographicPolitical/legalTechnologicalGlobalSociocultural

5. Economic

6. Demographic

7. USACanadaChinaIndia

8. Political/Legal

9. Technological

10. Global

11. Sociocultural

12. Source of Competitive AdvantageCostUniquenessBroadTargetMarketCostLeadershipDifferen-tiationBreadth of Competitive ScopeFocused Differen-tiationFocused Low CostNarrowTargetMarket

13. Source of Competitive AdvantageCostUniquenessBroadTargetMarketCostLeadershipDifferen-tiationBreadth of Competitive ScopeFocused Differen-tiationFocused Low CostNarrowTargetMarket

14. Cost Leadership -- Definition

15. Characteristics of Low Cost CompetitorCost conscious organizational culture Spartan facilities Limited perks and frills for executives Intolerance of waste Intensive screening of budget requests Employees enlisted in cost control efforts

16. Source of Competitive AdvantageCostUniquenessBroadTargetMarketCostLeadershipDifferen-tiationBreadth of Competitive ScopeFocused Differen-tiationFocused Low CostNarrowTargetMarket

17. AlignmentVEHICLESOrganic expansion

18. Wholly-owned storesARENASInexpensive, contemporary furniture

19. Young, white-collar customers

20. WorldwideDIFFERENTIATORSVery reliable quality

21. Low price

22. Fun, non-threatening shopping experience

23. Instant fulfillmentECONOMIC LOGICScale (global, regional, and individual store)Efficiencies from replicationSTAGING Rapid international expansion, by region

24. Early footholds in each country, fill in laterRound or Flat?

25. ResearchSource: Rugman,, 2005; Ghemawat, 2007; Reid, 2008