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International Strategy. Globalization drivers – Assess dual pressures: Global efficiency - standardization National/local responsiveness - adaptation Location/configuration of value-creating activities Integration/coordination of value-creating activities Strategy and entry.

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international strategy
International Strategy
  • Globalization drivers – Assess dual pressures:
    • Global efficiency - standardization
    • National/local responsiveness - adaptation
  • Location/configuration of value-creating activities
  • Integration/coordination of value-creating activities
  • Strategy and entry
forced standardization
Coca-Cola in Chinese: “bite the wax tadpole”

Coca-Cola 30 liter bottle??

U.S. carmakers’ left-hand drive cars

“Forced” Standardization
effective standardization
Effective Standardization

Coca-Cola’s

“transnational polar bears”

McDonald’s

“Big Mac”

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

Barbie: The “All-American” Girl Goes Overseas
effective adaptation
McMutton Pie in Australia

Wendy’s shrimp sandwich in Japan

Campbell’s non-condensed soups in the UK

Coca-Cola’s 175 ml containers in Japan

Effective Adaptation

Cadillac Seville

  • 1997 Asian edition
    • Right-hand drive, shorter seats, closer pedals, 10” shorter, retractable mirrors
globalization drivers
Globalization Drivers
  • Market Drivers
  • Cost Drivers
  • Government Drivers
  • Competitive Drivers

Low

Multidomestic

High

Global

strength of market drivers
Strength of Market Drivers

Aircraft

Computers

Automobiles

Soft Drinks

Toothpaste

Retail Banking

Book Publishing

Baked Goods

Low

High

Multidomestic

Global

strength of cost drivers
Strength of Cost Drivers

Pharmaceuticals

Aircraft

Computers

Automobiles

Toothpaste

Retail Banking

Baked Goods

Soft Drinks

Low

High

Multidomestic

Global

international strategy managing dual pressures
International Strategy:Managing Dual Pressures

High

Pressures for Global Efficiency

Low

Low

High

Pressures for Local Responsiveness

value chain location and standardization adaptation
Value ChainLocation and standardization/adaptation

Infrastructure

Technology Development

Procurement

Human Resource Management

Profit

Margin

Inbound

Logistics

Outbound

Logistics

Service

Operations

Marketing

value chain
Value Chain

Headquarters

Infrastructure

Technology Development

Procurement

Human Resource Management

Profit

Margin

Inbound

Logistics

Outbound

Logistics

Operations

Marketing

Service

value chain12
Value Chain

Headquarters

Infrastructure

Technology Development

Procurement

Human Resource Management

Profit

Margin

Inbound

Logistics

Outbound

Logistics

Operations

Marketing

Service

Upstream

value chain13
Value Chain

Headquarters

Infrastructure

Technology Development

Procurement

Human Resource Management

Profit

Margin

Inbound

Logistics

Outbound

Logistics

Operations

Marketing

Service

Upstream

Downstream

value chain sub functions nestles
Value Chain Sub-functions (Nestles?)

Infrastructure

Technology Development

Procurement

Human Resource Management

Profit

Margin

Inbound

Logistics

Outbound

Logistics

Operations

Marketing

Service

Advert.

Distrib.

Packaging

Pricing

value chain configuration
Value Chain Configuration
  • Geographic location of value chain activities
    • Concentrated/centralized vs. dispersed/decentralized
    • Which entry mode?
value chain coordination
Value Chain Coordination
  • Cross-border linkages between dispersed value-creating units
  • Coordination = Flows of:
    • $
    • Product (finished and intermediate)
    • Technology
    • People
    • Information (market data, strategic direction, etc.)
  • Highly coordinated vs. only money flows
international strategy managing dual pressures17
International Strategy:Managing Dual Pressures

High

Pressures for Global Efficiency

Export

Strategy

??

Low

Low

High

Pressures for Local Responsiveness

international strategy managing dual pressures19
International Strategy:Managing Dual Pressures

High

Pressures for Global Efficiency

Export

Strategy

??

Multidomestic

Strategy

Low

Low

High

Pressures for Local Responsiveness

multidomestic strategy
Multidomestic Strategy

Germany

U.S.

Mexico

Malaysia

Entry?

international strategy managing dual pressures21
International Strategy:Managing Dual Pressures

High

Global

Strategy

Pressures for Global Efficiency

Export

Strategy

??

Multidomestic

Strategy

Low

Low

High

Pressures for Local Responsiveness

global strategy textbook variety
Global Strategy(Textbook Variety)

Germany

U.S.

Mexico

Malaysia

Entry?

international strategy managing dual pressures23
International Strategy:Managing Dual Pressures

High

Global

Strategy

Transnational

Strategy

Pressures for Global Efficiency

Export

Strategy

??

Multidomestic

Strategy

Low

Low

High

Pressures for Local Responsiveness

transnational strategy v 1
Transnational Strategy (v.1)

Germany

U.S.

Mexico

Malaysia

Entry?

transnational strategy v 2
Transnational Strategy (v.2)

Germany

U.S.

Mexico

Malaysia

Entry?

transnational strategy v 3
Transnational Strategy (v.3)

Germany

Engines

U.S.

Steel

Mexico

Final

Assembly

Malaysia

Trim, seats,

glass

Entry?

entry mode decision matrix
Entry Mode Decision Matrix

Hi

Strategic Importance

of Country

Lo

Hi

Resources,

Control,

Risk

Lo

Lo

Hi

Stand-alone Attractiveness

of Country

foreign market entry modes
Foreign Market Entry Modes
  • Export
  • Licensing
  • Joint Venture
  • WOS
    • Acquisition
    • Greenfield
intl strategy and entry mode
Intl. Strategy and Entry Mode

Germany

JV

U.S. H.Q.

Mexico

WOS-G

Malaysia

Export