Implementing Global Strategy

Global business a growing trend

Presented By:

• Jeff beck• David wright

• John lepore• Pisit khumon

Introduction to Global Strategy

Multi-domestic strategy

Vs

Global strategy

The Policy of Drucker, Porter, and Reich

• A marxian mistake

• Determinants and drivers

• Of cause and effect

• A lesson in transaction costs

• The industrial policy debate

• The experts policy perscriptions

Government As A Process Expertise Market Facilitator

• Establish information availability and transparency

• Increasing the supply of process expertise

• Increasing the demand for process expertise

• Addressing the learning process and its direction

How the United States Can Become Number One Again

• Industrial development policy

• Increasing global competitiveness• 1) making the market for process skill learning more

efficient

• 2) encouraging a better supply of process management skills

• 3) encourage more demand among firms for higher process skills

• 4) encourage innovations in learning and training

Global Sourcing Strategy and International Trade in the

Pacific• Management of production units and interfaces of R & D,

manufacturing and marketing

• Objective: To exploit both competitive and comparative location advantages

• Much international trade is managed by multinational companies

• Offshore sourcing by U.S. Companies has been

encouraged by U.S. Tariff provisions

Trends in Global Sourcing Strategy

• Decline of the exchange rate determinism of sourcing

• Fluctuating exchange rates and the appreciation of the US dollar made domestic manufacturing less attractive

• The exchange rate determines the extent of foreign sourcing

• New competitive environment caused by excess world-wide capacity

• Excess production capacity and downward pressure on prices

• Previous goals versus new strategies

• Macro- and microeconomic issues of outsourcing

Functional Interfaces in the Value Chain

• Steps involved in developing a global sourcing strategy• Identification of the separable links in the value chain

• Determination of the company’s competitive advantages

• Assessment of transaction costs and selection of the lowest cost mode

• Determination of the comparative advantages of countries

• Development of adequate flexibility in corporate decision making and organizational design

Functional Interfaces in the Value Chain

• R and D / Manufacturing Interface• Manufacturing / Marketing Interface

• core components standardization

• product design family

• universal product with all features

• universal product with different positioning • Marketing / R and D Interface

Logisitics

• Pros and cons of production sharing

• Dependence

• Sustainable core competence vs transitory core competence

Third Generation R&D:The Key to Leveraging Core

Competencies

• Who we are

• What we are good at

• Companies who ignored this fact– Exxon__reliance electric

– Mobil__montgomery ward

– Sears__finance and insurance businesses

– At&t__personal computer

– Shell oil__pharmaceutical business

Technology Is the Basis for Strategic Vision and Intent

• Marketplace– Technology provide the essence for sustainable

competitive advantage in meeting customer needs

• Company– Technology forms the basis for many company core

competencies

• Future– Technology provides insights into products and

processes of the future

The Third Generation R&D Management Model

• First generation R&D– The strategy of hope

• Second generation R&D– Rational approach on a project-by-project basis

• Third generation R&D– Rational, holistic strategic approach guided by

general managers who together establish and continually reorient the business vision and its portfolio of technologies

Competitive Advantage and Sustained Growth

• Identifying and leveraging technology core competencies

• Continually linking business strategies with the core competencies

• Actively managing core competencies for the future

Conclusions:

• Free trade offers new markets, which create growth in global consumption and production

• The future of the United States depends on its ability to coordinate the world in learning, marketing, R&D, and manufacturing processes

• Modern companies management depends on leverage of core competencies technology

• Multinational companies decisions must be based on the interplay between Competitive Advantage & Comparative Advantage