International Business 15th edition Not for commercial

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International Business
Environments and Operations,
13/e
Global Edition
Part Five
Global Strategy, Structure, and
Implementation

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Chapter 11
The Strategy
of
International
Business

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Chapter Objectives
• To identify how managers develop strategy
• To examine industry structure, firm strategy, and
value creation
• To profile the features and functions of the value
chain framework
• 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

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The Role of Strategy in
International Business

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Industry, Strategy ,and Firm
Performance
• Industry organization paradigm leading
strategy perspectives
• The exceptions of imperfect competition
• The idea of industry structure: The Five
Forces Model

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Five Forces Model

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Industry Change
Industry structure changes because of events like
• Competitors’ moves
• Government policies
• Changes in economics
• Shifting buyer preferences
• Technological developments
• Rate of market growth

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Strategy and Value
• Strategy helps managers assess the
company’s present situation, identify the
direction the company should go, and
determine how the company will get there.
• Creating Value
– Cost Leadership
– Differentiation

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The Firm as Value Chain
• What is the value chain?
• Using the value chain
– Configuration
– Macro Cost Factors
– Cluster Effects
– Logistics
– Digitization
– Economies of Scale
– Business Environment

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Coordination
• Coordination Concerns
• National Cultures
• Learning Curve
• Operational Obstacles
• Subsidiary Networks

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Change and the Value Chain
• The configuration and coordination of value
chains respond to changes in customers,
competitors, industries, and environments.
• Caveat: The Risk of Strategy

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Global Integration versus Local
Responsiveness
• Pressures for Global Integration
– Globalization of Markets
– Efficiency Gains of Standardization
• Pressures for Local Responsiveness
– Consumer Divergence
– Host Government Policies

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When Pressures Interact
The Integration-Responsiveness grid helps
managers measure the global and local
pressures that influence the configuration and
coordination of their value chains.

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Integration Responsiveness Grid

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Types of Strategy

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Future: What’s New in the World of
Strategy Types
• Evolution of the Multinational Corporation
• Visions of the Future
• The “Metanational” Company
• “Micro-Nationals”
• The “Cybercorp”

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