2. Globalization
globalize | ‘glõbè‚lïz |
verb
develop or be developed so as to make possible
international influence or operation.
3. International
Diversification
Advantages Disadvantages
Earn greater returns on their existing Market differ in way cannot always be
skills and competencies anticipated
Reduce financial risk Reduce the effectiveness of
corporate management
Strengthening bargain power The loss of flexibility and
responsiveness to shifting consumer
tastes
4. Determinants of
National Advantage (M.E.Porter)
Firm strategy,
structure, and
rivalry
Factor Demand
condition conditions
Related and
supporting
industries
5. International
Strategy
Competitive Forces for Low Cost
Global Transnational
Strategy Strategy
Multidimensional
Internasional
Strategy
Strategy
Competitive Forces for Local Responsiveness
6. International
Strategy
Utilize domestic
resources and
Competitive Forces for Low Cost
capabilities
Global Transnational
and expand sales
Strategy Strategy
and operation
across more
than one country
boundries
Multidimensional
Internasional
Strategy
Strategy
Competitive Forces for Local Responsiveness
7. International
Strategy
Develop products,
services, and
Competitive Forces for Low Cost
experiences
Global Transnational
that respond to
Strategy Strategy
national differences
Multidimensional
Internasional
Strategy
Strategy
Competitive Forces for Local Responsiveness
8. International
Strategy
Integrate
operations to
Competitive Forces for Low Cost
achieve cost and
Global Transnational
differentiation
Strategy Strategy
advantages in
multiple
economist
Multidimensional
Internasional
Strategy
Strategy
Competitive Forces for Local Responsiveness
9. International
Strategy
Emphasizes
responsiveness
Competitive Forces for Low Cost
to local needs and
Global Transnational
global efficiencies
Strategy Strategy
simultaneously
Multidimensional
Internasional
Strategy
Strategy
Competitive Forces for Local Responsiveness
10. International Entry Mode
Greenfield
HIGH
Joint Venture
Level of Risk
& Required
Investment
Licensing
Franchising
Export
LOW
LOW HIGH
Potential for Return & Level of Control
11. International Entry Mode
ENTRY MODE ADVANTAGES DISADVANTAGES
Exporting • require little international experience • high transportation costs & tariffs
• require small level of financial investment
Licence low risk (little financial investment) • low profit return
• loses some control over the use of its
product or processes
Franchise • fast & relatively easy method for firm to • an inexpensive way to exploiting foreign
leverage brand name dan strandardized market opportunity
system internationally.
• potential loss of control over brand &
• lower strat-up cost & access to proven product quality (damaging reputation)
business model
• less severe than other forms of licensing
Joint Venture • shared ownership reduces the financial • create new competitor
investment and risk involved in
• may have different (opposing) goals at
developing new market.
the start
• benefit from skill of other partner.
• objective of partner often change over
time
Wholly Owned • acquiring firm can move very quickly into • complex, often costly, time consuming
Subsidiary = major market
• high risk
Greenfield
• complete control over strategic decisions
Venture • different corporate value and approaches
• often better profit potential. (high turnover of talented employees)
12. Cross-Cultural Differences
Political Risks realted to instability in national
governments & to war, both civil & international
(terrorist activities)
Economic Risks related to likelihood of the
government management of the economy will
affect the country ‘s business environment such as
currency fluctuations, change in inflation rate
13. Country Cluster (G. Hofstede & M. Bond)
NORDIC
GERMANIC
Finland, Norway,
Austria, Germany,
Denmark, Sweden
ANGLO Switzerland
Australia, South Africa,
Canada, NZ, UK, USA, NEAR EASTERN
INDEPENDENT
Ireland Turkey, Iran, Greece
Brazil, Japan, India,
Israel
LATIN EUROPEAN
ARAB
France, Belguim, Italy,
Bahrain, Oman, UAE,
Spain
Saudi Arabia, Kuwait,
Abu-Dhabi
LATIN AMERICA FAR EASTERN
Argentina, Venezuela, Malaysia, Philippines,
Chile, Peru, Mexico, Singapore, Taiwan,
Colombia South Vietnam,
Indonesia
14. IDENTIFY EXPLORE USE CORE STRATEGIC
INTERNATIONAL RESOURCES AND COMPETENCE COMPETITIVENESS
OPPORTUNITIES CAPABILITIES OUTCOMES
International Models of entry
strategies
Political
• Exploit economies • International • Exporting
Risks
of scale business-level Better
• Licensing
strategy performance
• Exploit economies
• Franchice
of scope • Multidomestic
strategy • Joint Venture
• Exploit national
differences • Global strategy • New wholly
Innovation
owned
• Transnationaal Economic
subsidiary
strategy Risks
Redraw of International Strategy, Source: Michael A. Hitt, et al, Strategic Management: Competitiveness and Globalization, 4th
edition, South-Western Pub, 2008