Professional Documents
Culture Documents
Business
GLOBALIZATION
AND
INTERNATIONAL
BUSINESS
THE CONTEXT OF
INTERNATIONAL
BUSINESS
COMPETING IN A
GLOBAL MARKET
PLACE
Introduction to globalization
and international business
Regional economic
differences
Organisation of
multinational business
Chapter 5
Entry into
Foreign Markets
They tipically
focus on
-profitability (ROI)
and
-profit growth
(% increase in net
profits over time)
What is Strategy?
Differenciation
British Airways
No Value
Provided
GO
Ryanair
Cost Leadership
Strategic Positioning
No frequent
flyers
Outsourcing
No seat assign.
Homogeneous
fleet
No extras
Operations
No connections
Internet
Secondary
airports
COST
Focus
Control
No agencies
Strong
Leadership
No
freight
Negociation
with airports
Image
Negociation
No unions
Relations
Social Stra4ca4on
To attain superior
performance and
earn a high R.O.I a
firms strategy must
make sense given
the market conditions
The operations of the
firm must support the
firms strategy
The organizational
architecture of the
firm must also match
operations and
strategy
And if market conditions shift, the firms strategy, operations, and
organization have to adapt
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Competitive Pressures
Cost Reduction
Local Responsiveness
differences in distribution
channels
host government
demands
Firms facing these pressures
need to differentiate their
products and marketing
strategy in each country
Consider discussing how Chinese firms are adapting their strategies in order to compete in foreign markets
Go to {http://www.businessweek.com/globalbiz/content/dec2008/gb2008121_644935.htm}.
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Global
Standardization
Strategy
Transnational
Strategy
International
Strategy
Localization
Strategy
Global
Standardiza.on
Strategy
Transna.onal
Strategy
Dominant Religions
Localiza.on
Strategy
Interna.onal
Strategy
Transnational
Strategy
International
Strategy
Localization
Strategy
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Common
PiFalls
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* intangible property includes patents, inven.ons, formulas, processes, designs, copyrights, and trademarks
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Franchising
is
aTrac.ve
because
can
avoid
costs
and
risks
of
opening
up
a
foreign
market
Franchising
is
unaTrac.ve
because
it
may
inhibit
the
rm's
ability
to
take
prots
out
of
one
country
to
support
compe..ve
aTacks
in
another
the
geographic
distance
of
the
rm
from
its
foreign
franchisees
can
make
poor
quality
dicult
for
the
franchisor
to
detect
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Disadvantages
Advantages
Acquisitions
are
quick
to
execute
enable
rms
to
preempt
their
compe.tors
can
be
less
risky
than
green-
eld
ventures
the
rm
overpays
for
the
assets
of
the
acquired
rm
there
is
a
clash
between
the
cultures
of
the
acquiring
and
acquired
rm
aTempts
to
realize
synergies
by
integra.ng
the
opera.ons
of
the
acquired
and
acquiring
en..es
run
into
roadblocks
and
take
much
longer
than
forecast
there
is
inadequate
pre-acquisi.on
screening
Greenfield Strategies
-
they
allow
the
rm
to
build
the
kind
of
subsidiary
company
that
it
wants
are
slower
to
establish
are
risky
because
they
have
no
proven
track
record
can
be
problema.c
if
a
compe.tor
enters
via
acquisi.on
and
quickly
builds
market
share
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Advantages
Strategic
alliances
are
aTrac.ve
because
they
facilitate
entry
into
a
foreign
market
allow
rms
to
share
the
xed
costs
(and
associated
risks)
of
developing
new
products
or
processes
bring
together
complementary
skills
and
assets
that
neither
partner
could
easily
develop
on
its
own
can
help
establish
technological
standards
for
the
industry
that
will
benet
the
rm
Disadvantages
Strategic
alliances
also
present
drawbacks:
They
can
give
compe.tors
low-cost
routes
to
new
technology
and
markets
Unless
a
rm
is
careful,
it
can
give
away
more
in
a
strategic
alliance
than
it
receives
Helps the firm achieve its strategic goals (mkt access, cost sharing, product
developmenti or accesing core competencies)
ii)
Shares the firms vision for the purpose of the alliance (same agendas)
iii) Is unlikely to opportunistically exploit the alliance for its own ends (fair play)
ii)
Alliance Management,
i)
ii)
Build trust, build interpersonal relationships, get to know each other, build an
informal network between the 2 firms managers
iii) Learn from your partner (and apply that knowledge within your organization)
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