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TThhee MMoommeenntt IIss NNooww 
GLOBAL MEGATRENDS 
IMPLICATIONS TO STRATEGY 
FORMULATION & EXECUTION: 
A CONTEXT FOR TRANSFORMATION 
Dr. Fariborz Ghadar 
William A. Schreyer Chair of 
Global Management, Policies and Planning; and 
Founding Director, Center for Global Business Studies 
Pennsylvania State University 
Email: fghadar@gmail.com 
Web Site: www.ghadar .com
International Product Life Cycle 
 High 
Engineering 
Content 
 Unique/ 
Non-Standard 
 Technical Advertising 
 Manufactured in Triad 
 Price/Cost High 
Phase I 
High Tech 
 Few Manufacturers/ 
Less Competition 
 RD Sales 10% 
 Small Export Market 
 Small 
Market 
2 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
International Product Life Cycle 
Phase I 
High Tech 
Phase I 
High Tech 
 High Engineering 
Content 
 RD Sales  10% 
 Small export market 
 Small market 
 Few Manufacturers/ 
Less Competition 
 Price/Cost high 
 Manufactured in 
Triad 
 Technical advertising 
 Unique/ 
Non-Standard 
 Process Engineering 
Emphasis 
 Mass 
Advertising 
3 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL 
 Growing 
Market 
 World Market 
 Growth of 
Export Market 
 More Standardized 
 RD Drops 
 Rising Competition 
 International Manufacturing 
 Price/Cost 
Declines 
Phase II 
Growth and 
Internationalization
International Product Life Cycle 
Phase I 
High Tech 
 High Engineering 
Content 
 RD Sales  10% 
 Small export market 
 Small market 
 Few Manufacturers/ 
Less Competition 
 Price/Cost high 
 Manufactured in 
Triad 
 Technical advertising 
 Unique/ 
Non-Standard 
Phase II 
Growth and 
Phase II 
Growth and 
Internationalization 
 More Standardized 
 RD Drops 
 Rising Competition 
 International 
Manufacturing 
 Growth of export market 
 World market 
 Price/cost decline 
 Mass advertising 
 Growing Market 
 Process Engineering 
Emphasis 
Internationalization 
 Manufactured where 
factors of production 
are lowest 
Phase III 
Maturing 
 High 
Competition 
 Manufactured where 
factors of production 
are lowest 
 No RD 
 Standard Product 
 World Market 
 No engineering 
emphasis 
 Saturated market 
 No Advertising 
 Price/cost ~ 1.0 
 High competition 
 No 
RD 
 Standard Product 
 Price/ Cost 1.0 
 World Market 
 No Engineering Emphasis 
4 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL 
 No 
Advertising 
 Saturated 
Market 
Phase III 
Maturing
Global Competitive Positioning 
Phase I: High Tech 
 Unique/Non-Standard 
 High Engineering 
Content 
 Few Manufacturers/ 
Less Competition 
 Price/Cost High 
 Manufactured in Triad 
 RD/Sales 10% 
 Technical Advertising 
 Small Market 
 Small Export Market 
Phase II: Growth  
Internationalization 
 More Standardized 
 Process Engineering 
Emphasis 
 Rising Competition 
 Price/Cost Declines 
 International 
Manufacturing 
 RD Drops 
 Mass Advertising 
 Growing Market 
 World Market 
 Growth of Export 
Market 
Phase III: Maturing 
 Standard Product 
 No Engineering 
Emphasis 
 High Competition 
 Price/Cost @ 1.0 
 Manufactured where 
factors of production 
are lowest 
 No RD 
 No Advertising 
 Saturated Market 
 World Market 
5 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
International Product Life Cycle 
Phase I: High Tech Phase II: Growth  
Internationalization Phase III: Maturing 
6 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Factors Affecting Global Competitive Positioning 
 Employee Relations 
 Cultural Sensitivity 
 Marketing  Advertising 
 International Trade 
 Political Risk  Government Intervention 
 Ownership 
 Transfer Pricing, Management Fees, Royalty Payments, 
Profit Repatriation 
 Financing 
Product Life Cycle 
7 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Where are our… 
MMaarrkkeettss?? 
CCuussttoommeerrss 
WWhheerree aarree wwee?? 
CCoommppeettiittoorrss?? 
CCuullttuurree?? 
8 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Discussion at Tables 
What are the implications of these 
trends to our firm? 
What are the implications of these 
trends to our firm? 
How are businesses attempting to respond to some of 
these global economic and social trends? 
How are businesses attempting to respond to some of 
these global economic and social trends? 
9 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
International Product Life Cycle 
Phase I: High Tech Phase II: Growth  
Internationalization Phase III: Maturing 
10 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
International Product Life Cycle 
Phase I: High Tech Phase II: Growth  
Internationalization Phase III: Maturing 
11 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Does 3the Rule of Three Work?? 
12 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
The Rewards go to #1 or #2 
Earnings 
22.).) $ $3366MM 
3 - 4 Years 
3.) $0 
11.).) $ $110000MM 
33.).) $ $00 
44.).) - - $ $2288MM 
predevelopment 
cost doubling reduces 
earnings to $96M 
predevelopment 
cost doubling reduces 
earnings to $96M 
13 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Market Share  Return on Investment 
Return on 
Investment 
Cost of Capital 
Market Share 
14 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Market Position 
Inner Circle 
Rule of Three 
Full Line 
Market Coverage 
Field Forces 
SOA Tech RD 
Vertical Integration 
Scale 
15 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Inner Circle Challenges 
 Monitor Outer Circle for 
“Breakouts” 
 Penetrate Niches 
 Manage costs 
 Convergence of other “Circles” 
 Modernize/Recreate Industry 
 Stabilize Inner Circle 
 Cover Innovations 
 Globalization 
Inner Circle 
Rule of Three 
Full Line 
Market Coverage 
Field Forces 
SOA Tech RD 
Vertical Integration 
Scale 
16 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Global Competitive Positioning 
Phase I: High Tech Phase II: Growth  
Internationalization Phase III: Maturing 
Product Innovativeness 
Product capabilities 
Process technology 
Information technology 
RD capability 
A 
Customer Intimacy 
Brand franchise 
Distribution systems B 
Market research 
Competitive position 
Operational 
Excellence 
Efficient operations 
Financial strength 
Low cost 
Structure 
17 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL 
D 
C 
Leadership 
Organizational Capability 
Shared mindset Reward system/metrics
Innovation  Core Competencies 
 Innovation 
 Customer Intimacy 
 Operational Excellence 
18 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Recent Research Shows the Rise of the Niche Players 
 Monitor Outer Circle for “Breakouts” 
 Penetrate Niches 
 Manage costs 
 Convergence of other “Circles” 
 Modernize/Recreate Industry 
 Stabilize Inner Circle 
 Cover Innovations 
 Globalization 
Reference: 
Wall Street Journal Article 
Financial Times Article 
Harvard Business Review Article 
Inner Circle 
Rule of Three 
Full Line 
Market Coverage 
Field Forces 
SOA Tech RD 
Vertical Integration 
Scale 
19 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Create a Culture that Lives The Value Promise 
Commit to creating a valuable, 
differentiated employee experience 
Effective 
Leadership 
Employee 
Enthusiasm 
Customer 
Satisfaction 
20 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL 
Improved 
Profits 
Commit to creating a valuable, 
differentiated employee experience
What Will it Take to Succeed? 
 Focused 
operations 
based on core 
competencies 
 Customer 
responsiveness 
 Relentless 
improvement 
 Innovative 
products  
services  Value 
delivery 
 Reward for 
global focus 
New. Quick. New. Quick. GGlloobbaall,, ““GGoooodd DDeeaall”” 
21 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Global Tectonics 
Population 
Urbanization 
Population 
Urbanization 
Disease  Globalization 
Resource Management 
Disease  Globalization 
Resource Management 
Environmental Degradation 
Economic Integration 
Environmental Degradation 
Economic Integration 
Knowledge Dissemination 
Information Technology 
Knowledge Dissemination 
Information Technology 
Biotechnology 
Nanotechnology 
Biotechnology 
Nanotechnology 
Future Conflict 
Future Conflict 
Governance 
Governance 
22 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
What To Do? 
Empower the 
people to do 
the right thing 
Strategic Intent Core Competencies LLEETT’’SS DDOO IITT!! 
23 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
Trademark Attribution 
AMD, the AMD Arrow logo and combinations thereof are trademarks of Advanced Micro Devices, Inc. in the United States and/or other jurisdictions. 
Other names used in this presentation are for identification purposes only and may be trademarks of their respective owners. 
©2010 Advanced Micro Devices, Inc. All rights reserved. 
24 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

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Global megatrends 20jun14

  • 1. TThhee MMoommeenntt IIss NNooww GLOBAL MEGATRENDS IMPLICATIONS TO STRATEGY FORMULATION & EXECUTION: A CONTEXT FOR TRANSFORMATION Dr. Fariborz Ghadar William A. Schreyer Chair of Global Management, Policies and Planning; and Founding Director, Center for Global Business Studies Pennsylvania State University Email: fghadar@gmail.com Web Site: www.ghadar .com
  • 2. International Product Life Cycle High Engineering Content Unique/ Non-Standard Technical Advertising Manufactured in Triad Price/Cost High Phase I High Tech Few Manufacturers/ Less Competition RD Sales 10% Small Export Market Small Market 2 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 3. International Product Life Cycle Phase I High Tech Phase I High Tech High Engineering Content RD Sales 10% Small export market Small market Few Manufacturers/ Less Competition Price/Cost high Manufactured in Triad Technical advertising Unique/ Non-Standard Process Engineering Emphasis Mass Advertising 3 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL Growing Market World Market Growth of Export Market More Standardized RD Drops Rising Competition International Manufacturing Price/Cost Declines Phase II Growth and Internationalization
  • 4. International Product Life Cycle Phase I High Tech High Engineering Content RD Sales 10% Small export market Small market Few Manufacturers/ Less Competition Price/Cost high Manufactured in Triad Technical advertising Unique/ Non-Standard Phase II Growth and Phase II Growth and Internationalization More Standardized RD Drops Rising Competition International Manufacturing Growth of export market World market Price/cost decline Mass advertising Growing Market Process Engineering Emphasis Internationalization Manufactured where factors of production are lowest Phase III Maturing High Competition Manufactured where factors of production are lowest No RD Standard Product World Market No engineering emphasis Saturated market No Advertising Price/cost ~ 1.0 High competition No RD Standard Product Price/ Cost 1.0 World Market No Engineering Emphasis 4 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL No Advertising Saturated Market Phase III Maturing
  • 5. Global Competitive Positioning Phase I: High Tech  Unique/Non-Standard  High Engineering Content  Few Manufacturers/ Less Competition  Price/Cost High  Manufactured in Triad  RD/Sales 10%  Technical Advertising  Small Market  Small Export Market Phase II: Growth Internationalization  More Standardized  Process Engineering Emphasis  Rising Competition  Price/Cost Declines  International Manufacturing  RD Drops  Mass Advertising  Growing Market  World Market  Growth of Export Market Phase III: Maturing  Standard Product  No Engineering Emphasis  High Competition  Price/Cost @ 1.0  Manufactured where factors of production are lowest  No RD  No Advertising  Saturated Market  World Market 5 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 6. International Product Life Cycle Phase I: High Tech Phase II: Growth Internationalization Phase III: Maturing 6 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 7. Factors Affecting Global Competitive Positioning  Employee Relations  Cultural Sensitivity  Marketing Advertising  International Trade  Political Risk Government Intervention  Ownership  Transfer Pricing, Management Fees, Royalty Payments, Profit Repatriation  Financing Product Life Cycle 7 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 8. Where are our… MMaarrkkeettss?? CCuussttoommeerrss WWhheerree aarree wwee?? CCoommppeettiittoorrss?? CCuullttuurree?? 8 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 9. Discussion at Tables What are the implications of these trends to our firm? What are the implications of these trends to our firm? How are businesses attempting to respond to some of these global economic and social trends? How are businesses attempting to respond to some of these global economic and social trends? 9 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 10. International Product Life Cycle Phase I: High Tech Phase II: Growth Internationalization Phase III: Maturing 10 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 11. International Product Life Cycle Phase I: High Tech Phase II: Growth Internationalization Phase III: Maturing 11 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 12. Does 3the Rule of Three Work?? 12 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 13. The Rewards go to #1 or #2 Earnings 22.).) $ $3366MM 3 - 4 Years 3.) $0 11.).) $ $110000MM 33.).) $ $00 44.).) - - $ $2288MM predevelopment cost doubling reduces earnings to $96M predevelopment cost doubling reduces earnings to $96M 13 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 14. Market Share Return on Investment Return on Investment Cost of Capital Market Share 14 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 15. Market Position Inner Circle Rule of Three Full Line Market Coverage Field Forces SOA Tech RD Vertical Integration Scale 15 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 16. Inner Circle Challenges  Monitor Outer Circle for “Breakouts”  Penetrate Niches  Manage costs  Convergence of other “Circles”  Modernize/Recreate Industry  Stabilize Inner Circle  Cover Innovations  Globalization Inner Circle Rule of Three Full Line Market Coverage Field Forces SOA Tech RD Vertical Integration Scale 16 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 17. Global Competitive Positioning Phase I: High Tech Phase II: Growth Internationalization Phase III: Maturing Product Innovativeness Product capabilities Process technology Information technology RD capability A Customer Intimacy Brand franchise Distribution systems B Market research Competitive position Operational Excellence Efficient operations Financial strength Low cost Structure 17 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL D C Leadership Organizational Capability Shared mindset Reward system/metrics
  • 18. Innovation Core Competencies  Innovation  Customer Intimacy  Operational Excellence 18 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 19. Recent Research Shows the Rise of the Niche Players  Monitor Outer Circle for “Breakouts”  Penetrate Niches  Manage costs  Convergence of other “Circles”  Modernize/Recreate Industry  Stabilize Inner Circle  Cover Innovations  Globalization Reference: Wall Street Journal Article Financial Times Article Harvard Business Review Article Inner Circle Rule of Three Full Line Market Coverage Field Forces SOA Tech RD Vertical Integration Scale 19 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 20. Create a Culture that Lives The Value Promise Commit to creating a valuable, differentiated employee experience Effective Leadership Employee Enthusiasm Customer Satisfaction 20 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL Improved Profits Commit to creating a valuable, differentiated employee experience
  • 21. What Will it Take to Succeed?  Focused operations based on core competencies  Customer responsiveness  Relentless improvement  Innovative products services  Value delivery  Reward for global focus New. Quick. New. Quick. GGlloobbaall,, ““GGoooodd DDeeaall”” 21 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 22. Global Tectonics Population Urbanization Population Urbanization Disease Globalization Resource Management Disease Globalization Resource Management Environmental Degradation Economic Integration Environmental Degradation Economic Integration Knowledge Dissemination Information Technology Knowledge Dissemination Information Technology Biotechnology Nanotechnology Biotechnology Nanotechnology Future Conflict Future Conflict Governance Governance 22 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 23. What To Do? Empower the people to do the right thing Strategic Intent Core Competencies LLEETT’’SS DDOO IITT!! 23 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL
  • 24. Trademark Attribution AMD, the AMD Arrow logo and combinations thereof are trademarks of Advanced Micro Devices, Inc. in the United States and/or other jurisdictions. Other names used in this presentation are for identification purposes only and may be trademarks of their respective owners. ©2010 Advanced Micro Devices, Inc. All rights reserved. 24 | AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL