internationalstrategy-121111091020-phpapp02

7/23/2019 internationalstrategy-121111091020-phpapp02

1/26

Slide 8.1

Johnson, Whittington and Scholes, Exploring Strategy, 9thEdition, Pearson Education Limited 2011

Slide 8.1

Strategic Choices

8 !nternational Strateg"


2/26

Slide 8.2


Learning outcomes

# $ssess the internationalisation potentialo%di%%erent mar&ets.

# !denti%" sources o% competitive advantage ininternational strategy, through 'oth glo'al sourcing

and e()loitation o% local %actors.# *istinguish 'et+een %our main types of

international strategy.

# Rank markets for entry or e()ansion, ta&ing into

account attractieness, cultural and other %orms o%distance and com)etitor retaliation threats.

# $ssess the relatie merits o% di%%erent market entrymodes, including -oint entures, licensing and%oreign direct inestment.


3/26

Slide 8.


International strategy framework

/igure 8.1 !nternational strateg" %rame+or&


4/26

Slide 8.


International v global strategy

# International strategy re%ers to a range o%o)tions %or o)erating outside an organisations

countr" o% origin.

# Global strategy inoles high coordination o%

e(tensie actiities dis)ersed geogra)hicall" in

man" countries around the +orld.

.3. 4lo'al strateg" is -ust one &ind o% international strateg".


5/26

Slide 8.5


Internationalisation drivers

/igure 8.2 *riers o% internationalisationSource $da)ted %rom 4. 6i), Total Global Strategy II, /inancial 7imes Prentice all, 200, Cha)ter 2


6/26

Slide 8.


Location advantages:

Porters diamond (1)

# Porters Diamond explains+h" somelocations tend to )roduce %irms +ith sustainedcom)etitie adantages in some industriesmore than others.

The four drivers in Porters Diamond stem%rom

local factor conditions

local demand conditions

local related and supporting industries

local firm strategy structure and rivalry.


7/26

Slide 8.:


Location advantages:

Porters diamond (2)

/igure 8. Porters *iamond ; the determinants o% national adantagesSource $da)ted +ith )ermission o% 7he /ree Press, a *iision o% Simon < Schuster, !nc., %rom The Competitive Advantage of Nations '" =ichael E. Porter. Co)"right 1990, 1998 '"

=ichael E. Porter. $ll rights resered


8/26

Slide 8.8


Global sourcing

Global sourcing re%ers to )urchasing sericesand com)onents %rom the most a))ro)riate

su))liers around the +orld regardless o% their

location.

7he adantages include

Cost advantages include la'our costs,

trans)ortation and communications costs, ta(ation

and inestment incenties.

Uniue local capabilities.

National mar!et characteristics and reputation"


9/26

Slide 8.9


!e global"local dilemma

The globallocal dilemma relates to thee(tent to +hich )roducts and serices ma" 'e

standardisedacross national 'oundaries or

need to 'e adaptedto meet the re>uirements o%

s)eci%ic national mar&ets.


10/26

Slide 8.10


International strategies

/igure 8. /our international strategiesSource $da)ted ?Changing )atterns o% international com)etition, )). 9;9, /igure 5 @Porter, =. 198:A. Co)"right 198:, '" 7he Begents o% the niersit" o% Cali%ornia. Be)rinted %rom

the California #anagement $evie%, ol. 28, no. 2. 3" )ermission o% 7he Begents. cmr 'er&ele".edu. $ll right resered. 7his article is %or )ersonal ie+ing '" indiiduals accessing this

+e'site. !t is not to 'e co)ied, re)roduced or other+ise disseminated +ithout +ritten )ermission %rom the Cali%ornia =anagement Beie+. 3" ie+ing this document, "ou here '" agree

to these terms. /or )ermission or re)rints, contact cmrDhaas. 'er&ele".edu electronic %ormats.


11/26

Slide 8.11


#arket c!aracteristics

/our elements o% the &ESTE' frame%or! are)articularl" im)ortant in com)aring countries %orentr"&olitical"Political enironments ar" +idel"

'et+een countries and can alter ra)idl".Economic"e" com)arators are leels o% 4ross

*omestic Product and dis)osa'le income +hichindicate the )otential siFe o% the mar&et.

Social"/actors li&e )o)ulation characteristics andli%est"le as +ell as cultural di%%erences.

'egal"Countries ar" +idel" in their legal regime.

Slid 8 12


12/26

Slide 8.12


!e $%G& framework

$ultural

distance

%dministratie and

)olitical distance

Geogra)hic

distance

&conomicG +ealth

distance

Slid 8 1


13/26

Slide 8.1


International cross'cultural comarison

/igure 8.5 !nternational crossHcultural com)arisonSource =. Jaidan, P. *orman, =. de Lu>ue and B. ouse, ?!n the e"e o% the 'eholder crossHcultural lessons in leadershi) %rom Pro-ect 4LI3E,Academy of #anagement

&erspectives, /e'ruar" 200, )). :;90 @/igure S$ s China, ). 82A. @4LI3E stands %or ?4lo'al Leadershi) and IrganiFational 3ehaior E%%ectieness.A

Slide 8 1


14/26

Slide 8.1


%ssessing country markets

Countr" mar&ets can 'e assessed according tothree criteria

#ar!et attractiveness to the ne% entrant

The li!elihood and extent of defenders( reaction

)efenders( clout* the relative po%er of defenders

to fight bac!"

Slide 8 15


15/26

Slide 8.15


International cometitor retaliation

/igure 8. !nternational com)etitor retaliationSource Be)rinted '" )ermission o% +arvard ,usiness $evie%. E(hi'it ada)ted %rom ?4lo'al gamesmanshi) '" !. =ac=illan, S. an Putter and B. =c4rath, =a" 200.

Co)"right 200 '" the arard 3usiness School Pu'lishing Cor)oration. $ll rights resered

Slide 8 1


16/26

Slide 8.1


!e staged international

eansion model

7he staged international e()ansion model)ro)oses a se>uential )rocess +here'"

com)anies graduall" increase their commitment to

ne+l" entered mar&ets, as the" 'uild mar&et

&no+ledge and ca)a'ilities.

7his is challenged '" t+o )henomena

-,orn.global( firms H ne+ small %irms that internationalise

ra)idl" @usuall" in ne+ technologiesA

Emerging.country multinationals H 'uilding uni>ue

ca)a'ilities in the home mar&et 'ut e()loiting them in

international mar&ets er" >uic&l".

Slide 8 1:


17/26

Slide 8.1:


#odes of entry

E()orting

Joint entures and alliances

Licensing

/oreign direct inestment

Slide 8 18


18/26

Slide 8.18


#odes of international market entry

/igure 8.: =odes o% international mar&et entr"

Slide 8.19


19/26

Slide 8.19


&orting

%dvantages# o need %or

o)erational %acilities

in host countr"

# Economies o% scale

in the home countr"

# !nternet can %acilitate

e()orting mar&eting

o))ortunities

*isadvantages# Lose an" location

adantages in the

host countr"

# *e)endence on

e()ort intermediaries

# E()osure to trade

'arriers

# 7rans)ortation costs

Slide 8.20


20/26

Slide 8.20


+oint ventures and alliances

%dvantages# Shared inestment

ris&

# Com)lementar"

resources

# =a"'e re>uired %or

mar&et entr"

*isadvantages# *i%%icult to %ind good

)artner

# Belationshi)

management

# Loss o% com)etitie

adantage

# *i%%icult to integrateand coordinate

Slide 8.21


21/26


Licensing

%dvantages# Contractual source

o% income

# Limited economic

and %inancial

e()osure

*isadvantages# *i%%icult to identi%"

good )artner

# Loss o% com)etitie

adantage

# Limited 'ene%its %rom

host nation

Slide 8.22


22/26


,oreign direct investment

%dvantages# /ull control

# !ntegration and

coordination )ossi'le

# Ba)id mar&et entr"

through ac>uisitions

# 4reen%ield

inestments are)ossi'le and ma" 'e

su'sidised

*isadvantages# Su'stantial

inestment and

commitment

# $c>uisitions ma"create integrationG

coordination issues

# 4reen%ield

inestments are time

consuming and

un)redicta'le

Slide 8.2


23/26


Internationalisation and

erformance

!nerted Hcure ; com)le(it" ma" erode

the adantages o% internationalisation

Serice sector disadantages ;

internationalisation ma" onl" +or&

+ell %or manu%acturing %irms

!nternationalisation and )roduct diersit"

Slide 8.2


24/26


-oles in an international ortfolio

/igure 8.8 Su'sidiar" roles in multinational %irmsSource Be)rinted '" )remission o% arard 3usiness School Press. /rom #anaging across ,orders/ The Transnational Solution '" C.$. 3artlett and S. 4hoshal. 3oston, =$ 1989, )).

105;11. Co)"right 1989 '" the arard 3usiness School Pu'lishing Cor)oration. $ll rights resered

Slide 8.25


25/26


.ummary (1)

# !nternationalisation )otential in an" )articular mar&etis determined '" Yips four drivers mar&et, cost,

goernment and com)etitors strategies.

# Sources o% adantage in international strateg" can

'e dra+n %rom 'oth glo'al sourcing through theinternational alue net+or& and national sources o%

adantage, as ca)tured in Porters Diamond.

# 7here are %our main types of international

strategy, ar"ing according to e(tent o% coordinationand geogra)hical con%iguration sim)le e()ort,

com)le( e()ort, multidomestic and glo'al.

Slide 8.2


26/26

.ummary (2)

# arket selection %or international entr" or e()ansionshould 'e 'ased on attractieness, multidimensionalmeasures o% distance and e()ectations o% com)etitorretaliation.

# odes of entry into ne+ mar&ets include e()ort,licensing and %ranchising, -oint entures and oerseassu'sidiaries.

# Internationalisation has an uncertain relationshi) to%inancialperformance, +ith an inerted Hcure+arning against oerHinternationalisation.

# !ubsidiaries in an international %irm can 'e managed'" )ort%olio methods -ust li&e 'usinesses in a diersi%ied%irm.

internationalstrategy-121111091020-phpapp02

Documents