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11 InternationalStrategy andOrganization
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
11 - 2Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Planning and StrategyPlanning and Strategy
Planning Strategy
Identifying and selecting objectives and deciding how to achieve those objectives
Set of planned actions that managers take to help a
company meet its objectives
11 - 3Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Strategy-Formulation ProcessStrategy-Formulation Process
11 - 4Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Identify Mission and GoalsIdentify Mission and Goals
Mission statementsmust consider: Company activities Business objectives Stakeholders Stockholders Customers Residents Environment
and much more…
11 - 5Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Identify Core CompetencyIdentify Core CompetencyIdentify Core CompetencyIdentify Core Competency
Special ability of a company that competitors find extremely difficult or impossible to equalSpecial ability of a company that competitors find extremely difficult or impossible to equal
Coordination of multiple skillsCoordination of multiple skills
Develop over lengthy period of timeDevelop over lengthy period of time
Difficult to teachDifficult to teach
11 - 6Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Value Chain AnalysisValue Chain Analysis
11 - 7Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Business EnvironmentBusiness Environment
National differences are inherent in analyzing a firm’s unique abilities
Cultural differences
Political processes
Legal matters
Economic systems
Labor issues
Consumer forces
and much more…
11 - 8Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Multinational StrategyMultinational Strategy
Adapting products and their marketing strategies
to local preferences in each national market
– Difficult to exploit economies of scale
+ Respond quickly to buyer preferences
11 - 9Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Global StrategyGlobal Strategy
Offering the same products using the same marketing strategy in all
national markets
– May overlook varying buyer preferences
+ Cost savings from standardization
11Questions?
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
11 InternationalStrategy andOrganization
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Part 2
11 - 12Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Levels of Company StrategyLevels of Company Strategy
11 - 13Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Growth StrategyGrowth Strategy
Internally generated growth
Mergers and acquisitions
Joint ventures
Strategic alliances
Increase the scale (size of activities) orscope (kinds of activities) of operations
11 - 14Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Retrenchment StrategyRetrenchment Strategy
Reduce the scale or scopeof a corporation’s businesses
Reduce Scale Reduce Scope
Close factories
Lay off workers
Sell unprofitable businesses
Sell unrelated businesses
11 - 15Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Stability StrategyStability Strategy
Guard against change and avoidgrowth or retrenchment
No opportunities or threats
Strengths fully exploited
Weaknesses fully protected
Stated objectives are met
11 - 16Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Combination StrategyCombination Strategy
Invest inpromising units
Retrench forless exposure
Stabilizeother units
Mix of growth, retrenchment, and stability strategies across business units
11 - 17Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Business-Level StrategiesBusiness-Level Strategies
Low-cost leadership
Differentiation
Focus
11 - 18Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Low-Cost StrategyLow-Cost StrategyLow-Cost StrategyLow-Cost Strategy
Exploit economies of scale to have the lowestcost structure of any competitor in an industryExploit economies of scale to have the lowestcost structure of any competitor in an industry
• Mantra is cutting costs
• Quality remains important
• Scale is barrier to new entrants
• Perhaps low customer loyalty
11 - 19Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Differentiation StrategyDifferentiation Strategy
Effects
Price premium
Customer loyalty
Portion of market only
Higher production costs
Design products that buyers perceiveas unique throughout an industry
Differentiators
Quality
Brand image
Product design
11 - 20Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Focus StrategyFocus StrategyFocus StrategyFocus Strategy
Focus on narrow market segment by being the low-cost leader, differentiating, or both
Focus on narrow market segment by being the low-cost leader, differentiating, or both
• Many sub-segments today
• Need distinctive product
• Single geography, ethnicity, etc.
11 - 21Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Department-Level StrategiesDepartment-Level Strategies
Departmental strategies
are key to a company
achieving its objectives:
Manufacturing Marketing Logistics Research & development
and others…
11Questions?
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
11 InternationalStrategy andOrganization
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Part 3
11 - 24Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Organizational StructureOrganizational Structure
Centralizeddecision making
Decentralizeddecision making
+ Coordination is paramount+ Financial control & cost savings
+ Improves local responsiveness+ Increases accountability
11 - 25Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
International Division International Division StructureStructure
11 - 26Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
International Area StructureInternational Area Structure
11 - 27Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Global Product StructureGlobal Product Structure
11 - 28Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Global Matrix StructureGlobal Matrix Structure
11 - 29Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Work TeamsWork Teams
Cross-functionalteam
Group of employeesfrom similar levels but
different functionaldepartments
Self-managedteam
Employees from onedepartment take onresponsibilities offormer supervisors
Globalteam
Top managers fromheadquarters andsubsidiaries solvecompany problems
11Questions?
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall