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.
11 The Strategy of International BusinessBrent Weeks
Ā
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
SAMSUNG: Comprehensive Strategic Analysis from International Business Managem...Aziza Zaldarriaga Sadain
Ā
Provides a comprehensive strategic analysis from the perspective of international business management in regards with Samsung.
The outline is written below:
Overview: Current Global Performance of Samsung and Business Models
Comprehensive Strategy Formulation (Input Stage)
Comprehensive Strategy Formulation (Matching Stage)
Comprehensive Strategy Formulation (Decision Stage)
Analysis of Business Strategy: Organizational Culture
Politics of Strategy Choice & Governance Issues; Current Challenges
Conclusion
This presentation describes modes of entry in International Market for businesses. Various types of modes has been explained from International business expansion point of view.
11 The Strategy of International BusinessBrent Weeks
Ā
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
SAMSUNG: Comprehensive Strategic Analysis from International Business Managem...Aziza Zaldarriaga Sadain
Ā
Provides a comprehensive strategic analysis from the perspective of international business management in regards with Samsung.
The outline is written below:
Overview: Current Global Performance of Samsung and Business Models
Comprehensive Strategy Formulation (Input Stage)
Comprehensive Strategy Formulation (Matching Stage)
Comprehensive Strategy Formulation (Decision Stage)
Analysis of Business Strategy: Organizational Culture
Politics of Strategy Choice & Governance Issues; Current Challenges
Conclusion
This presentation describes modes of entry in International Market for businesses. Various types of modes has been explained from International business expansion point of view.
A focused cost leadership strategy requires competing based on price to target a narrow market.
A firm that follows this strategy does not necessarily charge the lowest prices in the industry. Instead, it charges low prices relative to other firms that compete within the target market.
6. International Marketing, Market Selection, Modes of Entry in International...Charu Rastogi
Ā
This presentation defines international marketing, international marketing decisions, challenges of international marketing, and driving and restraining forces of international marketing. It goes on to discuss the process of market selection, firm related, market related and other factors effecting market selection. It also reflects on various modes of entry into foreign markets such as exporting (commercial strategy, commercial mode), foreign direct investment (industrial strategy, integrated modes) and associated or contractual modes (contractual strategy, competitive alliances). The presentation closes with a case study on the experience of Proctor and Gamble (P&G) in various international markets like Japan, China and India.
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?
01 Globalization and International BusinessBrent Weeks
Ā
To define globalization and international business and show how they affect each other
To understand why companies engage in international business and why international business growth has accelerated
To discuss globalizationās future and the major criticisms of globalization
To become familiar with different ways in which a company can accomplish its global objectives
To apply social science disciplines to understanding the differences between international and domestic business
This revision presentation provides an overview of the topic of emerging markets. It highlights some examples of how businesses have pursued a growth strategy in emerging markets and also how developed economies have seen investment coming in the opposite direction. A brief overview of the methods and benefits/drawbacks of international expansion is also provided.
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.
A focused cost leadership strategy requires competing based on price to target a narrow market.
A firm that follows this strategy does not necessarily charge the lowest prices in the industry. Instead, it charges low prices relative to other firms that compete within the target market.
6. International Marketing, Market Selection, Modes of Entry in International...Charu Rastogi
Ā
This presentation defines international marketing, international marketing decisions, challenges of international marketing, and driving and restraining forces of international marketing. It goes on to discuss the process of market selection, firm related, market related and other factors effecting market selection. It also reflects on various modes of entry into foreign markets such as exporting (commercial strategy, commercial mode), foreign direct investment (industrial strategy, integrated modes) and associated or contractual modes (contractual strategy, competitive alliances). The presentation closes with a case study on the experience of Proctor and Gamble (P&G) in various international markets like Japan, China and India.
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?
01 Globalization and International BusinessBrent Weeks
Ā
To define globalization and international business and show how they affect each other
To understand why companies engage in international business and why international business growth has accelerated
To discuss globalizationās future and the major criticisms of globalization
To become familiar with different ways in which a company can accomplish its global objectives
To apply social science disciplines to understanding the differences between international and domestic business
This revision presentation provides an overview of the topic of emerging markets. It highlights some examples of how businesses have pursued a growth strategy in emerging markets and also how developed economies have seen investment coming in the opposite direction. A brief overview of the methods and benefits/drawbacks of international expansion is also provided.
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.
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
Education at a Glance: OECD Indicators is the authoritative source for information on the state of education around the world. With more than 125 charts and 145 tables included in the publication and much more data available on the educational database, Education at a Glance 2017 provides key information on the output of educational institutions; the impact of learning across countries; the financial and human resources invested in education; access, participation and progression in education; and the learning environment and organisation of schools.
Business Pulse - Dual perspectives on the top 10 risks and opportunities 2013...EY
Ā
Business Pulse explores the top 10 risks and opportunities faced by global organizations over the next few years.
Ernst & Youngās Business Pulse report is based on a large sample survey of companies in 21 countries and across various industry sectors.
The report takes the pulse of:
ā¢ Current thinking on risks and opportunities and emerging challenges
ā¢ Dual perspective on the themes arising from the top 10 lists
ā¢ Expectations from industry executives and Ernst & Young specialists
Read this presentation to conduct a self-assessment for your business and download the report at: http://goo.gl/CSKGQ
Hostility could drive strategic behavior. And corporate finance could provide an arena. Competitors, shareholders, credit raters or even governments could initiate the measure. Except for hostile takeovers, this hostile strategic behavior is seldom addressed within strategy frameworks. And is seldom related to a defensive profile or a repulsive strategic move.
The following article is an attempt at identifying the premises and framework of this hostile strategic behavior within corporate finance. The article gives a definition to corporate finance related strategic hostile behavior, explores the motivations, lists the players, analyses the strategies and explores possible defenses. An integrative conceptual and operational model follows.
The article is based on contemporary work on strategy as well as corporate finance. The conclusion, and the ensuing model, could have a far reaching applied value at both strategy formulation and corporate finance levels.
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1. Strategic Management BUSM 3200
These Lecture Slides summarize the key points covered in the respective chapters in your
recommended text; these slides do NOT substitute, at all, the required reading of the assigned
chapter from the text. These slides also may contain additional supplementary material extracted
from other texts and sources outside your text book.
BUSM 3200- Strategic Management (Jan 2013) GDS 9(A)-1
2. Learning outcomes
ļµAssess the internationalisation potential of different
markets.
ļµIdentify sources of competitive advantage in
international strategy, through both global sourcing
and exploitation of local factors.
ļµDistinguish between four main types of international
strategy.
ļµRank markets for entry or expansion, taking into
account attractiveness, cultural and other forms of
distance and competitor retaliation threats.
ļµAssess the relative merits of different market entry
modes, including joint ventures, licensing and foreign
direct investment.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-2
3. International strategy framework
Figure 8.1 International strategy framework
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-3
4. International v global strategy
ļµInternational strategy refers to a range of
options for operating outside an organisationās
country of origin.
ļµGlobal strategy involves high coordination of
extensive activities dispersed geographically in
many countries around the world.
N.B. Global strategy is just one kind of international strategy.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-4
7. Internationalisation drivers
Professor George Yipās
Model
Figure 8.2 Drivers of internationalisation
Source: Adapted from G. Yip, Total Global Strategy II, Financial Times Prentice Hall, 2003, Chapter 2
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-7
8. Geographical Sources of Advantages
ļµGeographical location of activities is a crucial
source of competitive advantage
ļµOrganization can improve the configuration of its
value chain and network by taking advantage of
country-specific differences
ļµTwo principal opportunities available:
1. Locational Advantages
2. International Value Network
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-8
9. Location advantages:
Porterās diamond (1)
ļµPorterās Diamond ā explains why some
locations tend to produce firms with
sustained competitive advantages in some
industries more than others.
ļThe four drivers in Porterās Diamond stem
from:
ļlocal factor conditions
ļlocal demand conditions
ļlocal related and supporting industries
ļlocal firm strategy structure and rivalry.
BUSM 3200- Strategic Management (Jan 2013) GDS
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12. 1. Factor Conditions
ā¢ Factors of production include not only labor, capital,
and natural resources (e.g., land and minerals) but
also factors that can be created.
ā¢ The latter are more relevant to developed nations
that are seeking competitive advantage over firms in
other countries.
ā¢ These include a skilled human resource pool as well
as the supporting infrastructure of a country, e.g.,
communication and transportation systems as well
as a stable banking system.
13. 2. Demand Conditions
ā¢ Demand conditions refer to the demands that
consumers place on an industry for goods and
services.
ā¢ Consumers who demand highly specific,
sophisticated products and services force
firms to be more innovative to meet such
demand.
ā¢ Such consumer pressure presents challenges
to a countryās industries to also make it more
competitive in international markets.
14. 3. Related and Supporting Industries
ā¢ Related and supporting industries enable
firms to more effectively manage inputs.
ā¢ For example, countries with a strong supplier
base benefit by adding efficiency in
downstream activities.
ā¢ That is because a competitive supplier base
helps a firm obtain inputs using cost-effective,
timely methods it contributes to reducing
manufacturing costs.
15. 4. Firm Strategy, Structure and Rivalry
ā¢ Firms develop strategies and structures to
compete with other firms in the same country
that are trying to capture the same customer
market.
ā¢ Rivalry is particularly intense in nations with
strong consumer demand conditions, strong
supplier bases, and high new entrant potential
from related industries.
ā¢ Such rivalry provides a strong impetus for firms to
innovate and find new sources of competitive
advantage.
16. International Value Network: Global sourcing
Global sourcing refers to purchasing services and
components from the most appropriate suppliers
around the world regardless of their location.
The advantages include:
ļ Cost advantages include labour costs,
transportation and communications costs, taxation
and investment incentives.
ļ Unique local capabilities.
ļ National market characteristics and reputation.
BUSM 3200- Strategic Management (Jan 2013) GDS
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17. The concept of āvalue chain networksā
ļµGlobal strategy requires the firm to decide where
exactly it wants to āoptimally locateā its core
activities
ļµIf you go back to the model of the value chain, you
can then extend it beyond the domestic market
and consider how it is to be configured and then
integrated across a set of countries in order to
create a globally integrated network
ļµThe network itself provides the global firm with
competitive advantages
BUSM 3200- Strategic Management (Jan 2013) GDS
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20. INTERNATIONAL STRATEGIES
The globalālocal dilemma relates to the
extent to which products and services
may be standardised across national
boundaries or need to be adapted to
meet the requirements of specific
national markets.
BUSM 3200- Strategic Management (Jan 2013) GDS
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22. International Strategies
ļµSimple Export:
ļ® Concentration of activities (particularly manufacturing) in
one country, most likely the country of origin
ļ® Marketing such as pricing and distribution is decided at
the local level
ļ® Take advantage of locational advantages
ļµMulti-domestic
ļ® Dispersion of activities (manufacturing, marketing,
product development) in overseas countries
ļ® Each market is treated independently
ļ® Local adaptations to meet local market needs
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23. International Strategies
ļµComplex Export
ļ® Location of activities in one country
ļ® Involves coordinated marketing
ļµGlobal Strategy
ļ® Mature form of international strategy
ļ® Uses international value chain networks
ļ® Geographical location is determined according to the
locational advantage for each activity so that product
development, manufacturing and marketing functions
might be located in different countries.
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26. Two Opposing Pressures: Reducing
Costs and Adapting to Local Markets
Ted Levitt
ļµStrategies that favor global products and brands
ļ® Should standardize all of a firmās products for all of their
worldwide markets
ļ® Should reduce a firmās overall costs by spreading
investments over a larger market
ļ® Are based on three assumptions
ļ® Customer needs and interests worldwide are becoming
more homogeneous
ļ® People (worldwide) prefer lower prices at high quality
ļ® Economies of scale in production and marketing can be
achieved through supplying global markets
27. Two Opposing Pressures: Reducing
Costs and Adapting to Local Markets
ļµBut those three assumptions may not always be
true
ļ® Product markets vary widely between nations (customer
needs and interests?)
ļ® In many product and service markets, there appears to be
a growing interest in multiple product features, quality
and service (preference for low price?)
ļ® Technology permits flexible production, cost of
production may not be critical to product cost, and firmās
strategy should not be product-driven
31. MARKET SELECTION AND ENTRY
ļµNot all countries are equally attractive
ļµNeed to do country PESTEL analysis
ļµThen decide on the appropriate
Market Entry Mode
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32. Market characteristics
Four elements of the PESTEL framework are
particularly important in comparing countries for
entry:
ļ Political. Political environments vary widely
between countries and can alter rapidly.
ļ Economic. Key comparators are levels of Gross
Domestic Product and disposable income which
indicate the potential size of the market.
ļ Social. Factors like population characteristics and
lifestyle as well as cultural differences.
ļ Legal. Countries vary widely in their legal regime.
BUSM 3200- Strategic Management (Jan 2013) GDS
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36. The CAGE framework
Proposed by Professor Ghemawat
Cultural Administrative and
distance political distance
Geographic Economic/ wealth
distance distance
9(A)-36
BUSM 3200- Strategic Management (Jan 2013) GDS
37. International cross-cultural comparison
Figure 8.5 International cross-cultural comparison
Source: M. Javidan, P. Dorman, M. de Luque and R. House, āIn the eye of the beholder: cross-cultural lessons in leadership from Project GLOBEā, Academy of Management
Perspectives, February 2006, pp. 67ā90 (Figure 4: USA vs China, p. 82). (GLOBE stands for āGlobal Leadership and Organizational Behavior Effectivenessā.)
BUSM 3200- Strategic Management (Jan 2013) GDS
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38. Assessing country markets
Country markets can be assessed
according to three criteria:
ļ Market attractiveness to the new entrant
ļ The likelihood and extent of defendersā
reaction
ļ Defendersā clout ā the relative power of
defenders to fight back.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-38
40. The staged international
expansion model
The staged international expansion model
proposes a sequential process whereby companies
gradually increase their commitment to newly
entered markets, as they build market knowledge
and capabilities.
This is challenged by two phenomena:
ļ āBorn-globalā firms - new small firms that internationalise
rapidly (usually in new technologies)
ļ Emerging-country multinationals - building unique
capabilities in the home market but exploiting them in
international markets very quickly.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-40
41. Modes of entry
Exporting
Joint ventures and alliances
Licensing
Foreign direct investment
9(A)-41
BUSM 3200- Strategic 41
43. Modes of international market entry
Figure 8.7 Modes of international market entry
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-43
44. Exporting
Advantages Disadvantages
ļµNo need for ļµLose any location
operational facilities advantages in the
in host country host country
ļµEconomies of scale in ļµDependence on
the home country export
ļµInternet can intermediaries
facilitate exporting ļµExposure to trade
marketing barriers
opportunities ļµTransportation costs
9(A)-44
45. Joint ventures and alliances
Advantages Disadvantages
ļµShared investment ļµDifficult to find good
risk partner
ļµComplementary ļµRelationship
resources management
ļµMaybe required for ļµLoss of competitive
market entry advantage
ļµDifficult to integrate
and coordinate
9(A)-45
46. Licensing
Advantages Disadvantages
ļµContractual source of ļµDifficult to identify
income good partner
ļµLimited economic ļµLoss of competitive
and financial advantage
exposure ļµLimited benefits
from host nation
9(A)-46
47. Foreign direct investment
Advantages Disadvantages
ļµFull control ļµSubstantial
ļµIntegration and investment and
coordination possible commitment
ļµRapid market entry ļµAcquisitions may
through acquisitions create integration/
ļµGreenfield coordination issues
investments are ļµGreenfield
possible and may be investments are
subsidised time consuming and
unpredictable
9(A)-47
51. Internationalization and performance
Inverted U-curve ā complexity may erode
the advantages of internationalization
Service sector disadvantages ā
internationalization may only work
well for manufacturing firms
Internationalisation and product diversity
9(A)-51
53. Subsidiary roles
ļµStrategic leaders
ļ® Hold valuable resources; located in countries that have
competitive success
ļµContributors
ļ® Located in countries of lesser strategic significance but
hold valuable internal capabilities
ļµImplementers
ļ® Not contributing substantially to competitive advantage
but help to generate financial resources (ācash cowā)
ļµBlack holes
ļ® Located in countries that are crucial for competitive
success but lack resources (āquestion marksā)
BUSM 3200- Strategic Management (Jan 2013) GDS
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54. Summary (1)
ļµInternationalisation potential in any particular market
is determined by Yipās four drivers: market, cost,
government and competitorsā strategies.
ļµSources of advantage in international strategy can be
drawn from both global sourcing through the
international value network and national sources of
advantage, as captured in Porterās Diamond.
ļµThere are four main types of international strategy,
varying according to extent of coordination and
geographical configuration: simple export, complex
export, multidomestic and global.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-54
55. Summary (2)
ļµMarket selection for international entry or expansion
should be based on attractiveness, multidimensional
measures of distance and expectations of competitor
retaliation.
ļµModes of entry into new markets include export, licensing
and franchising, joint ventures and overseas subsidiaries.
ļµInternationalisation has an uncertain relationship to
financial performance, with an inverted U-curve warning
against over-internationalisation.
ļµSubsidiaries in an international firm can be managed by
portfolio methods just like businesses in a diversified
firm.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-55
56. PRACTICE ESSAY QUESTIONS
IMPORTANT NOTE: ā
ļµ These questions are provided for your reference only ā they are only
INDICATIVE of the standard of questions you might expect in the final exam.
ļµ DO NOT use these questions to āspotā
ļµ The RMIT examiner will post advice on the exam on the Learning Hub closer
to the exam; you are required to pay attention to that advise
ļµ The questions here show the range of topics that could be tested from this
lecture; they are NOT exhaustive
ļµ To score a high grade it is important to LINK the theory to applications and
examples. Where from?
ļ® You have been assigned specific cases to read from the text. Each case
study will show you the kinds of strategic decisions the case company
needs to make. You can draw from these examples.
ļ® You have selected a case company for your project; you may use
examples from there.
ļ® You are supposed to read widely from the business press about local,
regional and international companies strategies. You can use examples
from there as well.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-56
57. Sample essay question
ļµ What are some of the benefits and risks
associated with a firm implementing an
international strategy
If there are drawbacks in a specific
international market, explain how these
might be identified using Porter's
diamond model of national advantage.
Give examples to support your answer.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-57
58. Sample essay question
ā¢ Discuss the advantages and
disadvantages associated with related
and unrelated diversification strategy for
international expansion. Illustrate your
answer with examples from one case
studied in this course.
ļµ Question is tricky: need to LINK two chapter material,
one on diversification (Chapter 7) and one on
international strategy (Chapter 8)
ļµ Only list the advs and disdvs of diversification from the
point of going international
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-58
59. Sample essay question
ļµWhat are four risks associated with
international strategy?
ļµGive examples from the XYZ case
studied in this course to illustrate how
these risks might be managed to
improve firm performance.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-59
60. Sample essay question
ļµDiscuss the benefits and risks
associated with expansion into
international markets.
ļµUse specific examples in your answer
to illustrate how potential risks might
be managed effectively for a firm to
gain sustainable competitive
advantage.
BUSM 3200- Strategic Management (Jan 2013) GDS
9(A)-60