International Strategy BUSI 7130/7136 Chris Shook, Ph.D.
-
date post
22-Dec-2015 -
Category
Documents
-
view
222 -
download
0
Transcript of International Strategy BUSI 7130/7136 Chris Shook, Ph.D.
International Strategy
BUSI 7130/7136BUSI 7130/7136
Chris Shook, Ph.D.Chris Shook, Ph.D.
AGENDA
LectureLecture BRL HardyBRL Hardy
Drivers of Globalization
• Increased similarity of lifestyles Increased similarity of lifestyles • Global communications Global communications • Fast communicationFast communication• Pressures to reduce costsPressures to reduce costs
Motivators
Increase Market SizeIncrease Market Size Achieve Acceptable ROIAchieve Acceptable ROI Achieve Economies of ScaleAchieve Economies of Scale Achieve Location AdvantageAchieve Location Advantage
Choice of Entry Mode
ExportingExporting LicensingLicensing FranchisingFranchising Joint VenturesJoint Ventures Acquisition of Wholly-Owned SubsidiaryAcquisition of Wholly-Owned Subsidiary Development of Wholly-Owned SubsidiaryDevelopment of Wholly-Owned Subsidiary
Factor ConditionsFactor ConditionsFactor ConditionsFactor Conditions
Basic FactorsBasic Factors- Land, labor- Land, labor
Advanced FactorsAdvanced Factors- Highly educated workers- Highly educated workers- Digital communications- Digital communications
Generalized FactorsGeneralized Factors- Capital, infrastructure- Capital, infrastructure
Specialized FactorsSpecialized Factors- Skilled personnel- Skilled personnel
Porter’s Determinants of National AdvantagePorter’s Determinants of National AdvantageHome country Home country of origin is crucial to International successof origin is crucial to International success
Factor ConditionsFactor Conditions
Basic FactorsBasic Factors- Land, labor- Land, labor
Advanced FactorsAdvanced Factors- Highly educated workers- Digital communications- Highly educated workers- Digital communications
Generalized FactorsGeneralized Factors- Capital, infrastructure- Capital, infrastructure
Specialized FactorsSpecialized Factors- Skilled personnel- Skilled personnel
Demand Demand ConditionsConditionsDemand Demand
ConditionsConditions
Size and Nature Size and Nature of Home of Home
Country’s Country’s DemandDemand
Porter’s Determinants of National AdvantagePorter’s Determinants of National AdvantageHome country Home country of origin is crucial to International successof origin is crucial to International success
Demand ConditionsDemand
ConditionsSize and Nature of Home Country’s Demand
Size and Nature of Home Country’s Demand
Factor ConditionsFactor Conditions
Basic FactorsBasic Factors- Land, labor- Land, labor
Advanced FactorsAdvanced Factors- Highly educated workers- Digital communications- Highly educated workers- Digital communications
Generalized FactorsGeneralized Factors- Capital, infrastructure- Capital, infrastructure
Specialized FactorsSpecialized Factors- Skilled personnel- Skilled personnel
Related & Supporting Related & Supporting IndustriesIndustries
Related & Supporting Related & Supporting IndustriesIndustries
- Japanese cameras & copiers- Japanese cameras & copiers- Italian shoes & leather- Italian shoes & leather
Home country Home country of origin is crucial to International successof origin is crucial to International success
Porter’s Determinants of National AdvantagePorter’s Determinants of National Advantage
Demand ConditionsDemand
ConditionsSize and Nature of Home Country’s Demand
Size and Nature of Home Country’s Demand
Factor ConditionsFactor Conditions
Basic FactorsBasic Factors- Land, labor- Land, labor
Advanced FactorsAdvanced Factors- Highly educated workers- Digital communications- Highly educated workers- Digital communications
Generalized FactorsGeneralized Factors- Capital, infrastructure- Capital, infrastructure
Specialized FactorsSpecialized Factors- Skilled personnel- Skilled personnel
Firm Strategy, Structure Firm Strategy, Structure & Rivalry& Rivalry
Firm Strategy, Structure Firm Strategy, Structure & Rivalry& Rivalry
Intense rivalry fosters Intense rivalry fosters industry competitionindustry competition
Porter’s Determinants of National AdvantagePorter’s Determinants of National Advantage
Related & Supporting Industries
Related & Supporting Industries
- Japanese cameras & copiers- Italian shoes & leather- Japanese cameras & copiers- Italian shoes & leather
Home country Home country of origin is crucial to International successof origin is crucial to International success
Advice from Porter Create pressures for innovationCreate pressures for innovation Seek out competitors as motivatorsSeek out competitors as motivators Establish early warning systemsEstablish early warning systems Improve national diamondImprove national diamond Welcome rivalryWelcome rivalry Globalize to tap selectively into sources of other Globalize to tap selectively into sources of other
nationsnations Locate home base to support competitive Locate home base to support competitive
advantageadvantage
International Corporate StrategyCorporate-LevelCorporate-Level International Strategies International Strategies
ThreeThreeCorporate Corporate StrategiesStrategies Global Strategy
Transnational Strategy
Multi-Domestic Strategy
International Corporate StrategyInternational Corporate Strategy
When is each strategy appropriate?When is each strategy appropriate?
Need for Need for Global Global
IntegrationIntegration
Need for Local Market ResponsivenessNeed for Local Market Responsiveness
Low
High
Low High
International Corporate StrategyInternational Corporate Strategy
When is each strategy appropriate?When is each strategy appropriate?
Need for Need for Global Global
IntegrationIntegration
Need for Local Market ResponsivenessNeed for Local Market Responsiveness
Low
High
Low High
International Corporate StrategyInternational Corporate Strategy
When is each strategy appropriate?When is each strategy appropriate?
Need for Need for Global Global
IntegrationIntegration
Need for Local Market ResponsivenessNeed for Local Market Responsiveness
Low
High
Low High
International Corporate StrategyInternational Corporate Strategy
When is each strategy appropriate?When is each strategy appropriate?
Need for Need for Global Global
IntegrationIntegration
Need for Local Market ResponsivenessNeed for Local Market Responsiveness
Low
High
Low High
International Corporate StrategyInternational Corporate Strategy
When is each strategy appropriate?When is each strategy appropriate?
Need for Need for Global Global
IntegrationIntegration
Need for Local Market ResponsivenessNeed for Local Market Responsiveness
Low
High
Low High
International Corporate StrategyInternational Corporate Strategy
When is each strategy appropriate?When is each strategy appropriate?
Need for Need for Global Global
IntegrationIntegration
Need for Local Market ResponsivenessNeed for Local Market Responsiveness
Low
High
Low High
International Corporate StrategyInternational Corporate Strategy
When is each strategy appropriate?When is each strategy appropriate?
Need for Need for Global Global
IntegrationIntegration
Need for Local Market ResponsivenessNeed for Local Market Responsiveness
Low
High
Low High
Do you REALLY have a global strategy?
Global strategyGlobal strategy– cross subsidization of national market share cross subsidization of national market share
battles in pursuit of global brand and battles in pursuit of global brand and distribution positionsdistribution positions
Do you REALLY have a global strategy?
Why?Why?– Loose bricksLoose bricks
Necessity of understanding competitor’s strategic Necessity of understanding competitor’s strategic intentintent
– Labor and scale advantages are not sustainableLabor and scale advantages are not sustainable– Domestic competitors are NEVER safeDomestic competitors are NEVER safe
Do you REALLY have a global strategy?
ImplicationsImplications– Broader corporate concept of a product lineBroader corporate concept of a product line– Don’t allocate resources by SBUsDon’t allocate resources by SBUs– Don’t allocate resources by countryDon’t allocate resources by country