Global megatrends 20jun14

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

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
Growing
Market
World Market
Growth of
Export Market
More Standardized
RD Drops
Rising Competition
International Manufacturing
Price/Cost
Declines
Phase II
Growth and
Internationalization

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
More Standardized
RD Drops
Rising Competition
International
Manufacturing
Growth of export market
World market
Price/cost decline
Mass advertising
Growing Market
Process Engineering
Emphasis
Manufactured where
factors of production
are lowest
Phase III
Maturing
High
Competition
Manufactured where
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
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
 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
are lowest
 No RD
 No Advertising
 Saturated Market
 World Market

Phase I: High Tech Phase II: Growth
Internationalization Phase III: Maturing

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

Where are our…
MMaarrkkeettss??
CCuussttoommeerrss
WWhheerree aarree wwee??
CCoommppeettiittoorrss??
CCuullttuurree??

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?

Does 3the Rule of Three Work??

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

Market Share Return on Investment
Return on
Investment
Cost of Capital
Market Share

Market Position
Inner Circle
Rule of Three
Full Line
Market Coverage
Field Forces
SOA Tech RD
Vertical Integration
Scale

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
Scale

Global Competitive Positioning
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
D
C
Leadership
Organizational Capability
Shared mindset Reward system/metrics

Innovation Core Competencies
 Innovation
 Customer Intimacy
 Operational Excellence

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
Scale

Create a Culture that Lives The Value Promise
Commit to creating a valuable,
differentiated employee experience
Effective
Leadership
Employee
Enthusiasm
Customer
Satisfaction
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””

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

What To Do?
Empower the
people to do
the right thing
Strategic Intent Core Competencies LLEETT’’SS DDOO IITT!!

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.

Global megatrends 20jun14

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Global megatrends 20jun14