International & Transnational strategies
Presented by,
Kirthiga Sekar
08AA19
Question
• Explain about ‘internationalization’ & ‘transnationalisation’ as strategic orientations for firms to compete in the international arena. On what basis does each of these differ from the other?
• Explain the international strategic business model of an Indian firm.
Strategic choices:Managing Dual Pressures
Pre
ssur
es f
or c
ost r
educ
tion
Pressures for Local Responsiveness
High
Low
HighLow
Strategic choices:Managing Dual Pressures
Pre
ssur
es f
or c
ost r
educ
tion
Pressures for Local Responsiveness
High
Low
HighLow
internationalStrategy
International Strategy
U.S.
Germany
Mexico
Malaysia
Examples
IBM Microsoft – headquartered at Redmond,
Washington , where it develops the core architecture
Yahoo! – centralized operations at San Jose, California
Kellogg Procter & Gamble
Barbie: The “All-American” Girl Goes Overseas
Barbie is 41 years old Sold in 130 countries National adaptations:
– Physical features– Costumes– Activity sets
Standardized physique:– Scaled to 6’2”, 110 lbs.– 38-18-28
Strategic choices:Managing Dual Pressures
Pre
ssur
es f
or c
ost r
educ
tion
Pressures for Local Responsiveness
High
Low
HighLow
InternationalStrategy
TransnationalStrategy
Transnational Strategy
U.S.Germany
Mexico
Malaysia
Engines
Final Assembly
Trim, seats,glass
Steel
Examples
Caterpillar – Japan Unilever
Coca-Cola’s “transnational polar bears”
Factors International Transnational
Foreign acquisitions by Indian firms,2000-6
Source : Federation of Indian Chambers of Commerce and Industry
(FICCI) 2006
BHARAT FORGE LIMITED
• Company of the US$ 1.5 billion Kalyani Group• Largest exporter of auto components from India
and one of the leading chassis component manufacturers in the world.
• Entered export market in early 80’s Initial exports were to Soviet Union and the
company soon started exporting to European and Japanese markets.
0
1
2
3
FY9
7
FY9
8
FY9
9
FY0
0
FY0
1
FY0
2
FY0
3
FY0
4
FY0
5E
FY0
6E
FY0
7E
FY0
8E
FY0
9E
Auto component exports (US$bn)
BFL’s contribution in making ‘Made in
India’ global
Exports comprise nearly 40 per cent of sales Leading supplier of engine and chassis
components to global customers Strong relationship with 36 global customers like
Toyota, GM, Honda, Mitsubishi, Ford, Daimler Chrysler, Mercedes Benz, Caterpillar, Audi,
Renault, Cummins, Dana etc Made several acquisitions to achieve growth –
CDP Aluminiumtechnik (a forging company in Germany), Federal Forge (manufacturer of complex forged steel components in the US) and Imatra Forging Group (having forging companies in Sweden and Scotland)
Demonstration of dual pressures
Global rise in the prices of steel. BFL has been able to pass on the same to its customers. – low pressure for cost reduction
Acquisitions strengthened its position as a major supplier to the global passenger car industry. – low pressure for customisation
total income
31204312
6103
86319880
0
2000
4000
6000
8000
10000
12000
1 2 3 4 5
year
Rs.
mil
lio
n
revenue from exports
9861592
2478
3560
4590
0
1000
2000
3000
4000
5000
1 2 3 4 5
year
Rs.
mil
lio
n
Factors fuelling Bharat Forge’s global
initiatives
Creating global level capacity: creating capacities which can cater to the global customers requirements.
Global Centre of Excellence: This centre focuses on research & development
Dual shore manufacturing model: Core components in India and minor customisations in a location closer to customer.
References
International business - Hill and Jain International business – Daniels,
Radebaugh, Sullivan Trade and globalization – Deepak Nayyar www.bharatforge.com
THANK YOU
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