11. global strategies and international advantage
DESCRIPTION
11. Global strategies and international advantage. Outline. Terminology of International Business The Context of International Strategy National Competitive Advantage The Internationalization Process From International to Global Strategies The Drivers of Globalization. Outline (continued). - PowerPoint PPT PresentationTRANSCRIPT
Strategy: Analysis and Practice
Slide 1 ©The McGraw-Hill Companies, 2005
11. Global strategies and international advantage
Strategy: Analysis and Practice
Slide 2 ©The McGraw-Hill Companies, 2005
Outline● Terminology of International Business● The Context of International Strategy● National Competitive Advantage● The Internationalization Process● From International to Global Strategies● The Drivers of Globalization
Strategy: Analysis and Practice
Slide 3 ©The McGraw-Hill Companies, 2005
Outline (continued)
● Global vs. Local● Strategic Choices● The Best of Both Worlds● Strategy and Organization● Managing International Organisation
Strategy: Analysis and Practice
Slide 4 ©The McGraw-Hill Companies, 2005
The Terminology of International Business
● International Business: Transactions across national borders.
● International Trade: exporting and importing● Foreign Direct Investment: capital invested in
other nations by firms through their control of foreign subsidiaries and affiliates.
● Multinational Enterprises: Companies with subsidiaries located in more than one country, normally restricted to the largest international firms.
Strategy: Analysis and Practice
Slide 5 ©The McGraw-Hill Companies, 2005
World Trade 2000
Strategy: Analysis and Practice
Slide 6 ©The McGraw-Hill Companies, 2005
USA: Inward and Outward FDI 1999
Strategy: Analysis and Practice
Slide 7 ©The McGraw-Hill Companies, 2005
Determinants of National Competitive Advantage
Strategy: Analysis and Practice
Slide 8 ©The McGraw-Hill Companies, 2005
The Internationalization Process
Strategy: Analysis and Practice
Slide 9 ©The McGraw-Hill Companies, 2005
Determinants of Globalization
Strategy: Analysis and Practice
Slide 10 ©The McGraw-Hill Companies, 2005
From International to Global Strategy
Multidomestic Strategy
• Competition in one country is independent of competition elsewhere.
• Markets in each country have different consumer behaviour.
• Product diversity.• Portfolio of
independent subsidiaries
Global Strategy• Competition in one
country influenced by competition elsewhere.
• Markets and consumer behaviour broadly similar in all countries.
• Product standardisation
• International coordination and integration.
Strategy: Analysis and Practice
Slide 11 ©The McGraw-Hill Companies, 2005
Drivers of Globalization
Strategy: Analysis and Practice
Slide 12 ©The McGraw-Hill Companies, 2005
Strategic Choices
Strategy: Analysis and Practice
Slide 13 ©The McGraw-Hill Companies, 2005
Transnational Strategies“Exploit experience-based cost economies and location economies, transfer distinctive competences within the company, and at the same time pay attention to pressures for local responsiveness”(Bartlett and Ghoshal, 1989)
Strategy: Analysis and Practice
Slide 14 ©The McGraw-Hill Companies, 2005
Alternative Organizational Solutions
Strategy: Analysis and Practice
Slide 15 ©The McGraw-Hill Companies, 2005
The Flagship Firm
Strategy: Analysis and Practice
Slide 16 ©The McGraw-Hill Companies, 2005
The Matrix StructureAdvantages
• Combines product specialisation with geographical market knowledge.
• Overcomes silos and duplication by direct contact.
• Effective when there is clarity, continuity and consistency through the organization.
Disadvantages• Extends decision-
making time.• Dual reporting can
confuse responsibilities and priorities.
• May engender conflict.• May make
performance assessment ambiguous.
Strategy: Analysis and Practice
Slide 17 ©The McGraw-Hill Companies, 2005
Evolution of International Structure
Strategy: Analysis and Practice
Slide 18 ©The McGraw-Hill Companies, 2005
Concluding Remarks● International strategy is a significant
extension of the logic of competitive advantage.
● International trade and national competitive advantage are key parts of the business environment– International trade underpinning
internationalization.– Globalization promoting international
standardization.
Strategy: Analysis and Practice
Slide 19 ©The McGraw-Hill Companies, 2005
Concluding Remarks (continued)● International business strategy
involves the management of standardization and differentiation.
● Attempts to gain the ‘best of both worlds’ have involved– Transnational strategy– The matrix structure– The flagship firm