Transcript International Strategy and Organization

International Strategy and
Organization
Planning and Strategy
Planning
Identifying and selecting
objectives and deciding how
to achieve those objectives
Strategy
Set of planned actions that
managers take to help a
company meet its objectives
Strategy-Formulation Process
Identify Mission and Goals
Mission statements
must consider:

Company activities
 Business objectives
 Stakeholders
 Stockholders
 Customers
 Residents
 Environment
and much more…
Identify Core Competency
Special ability of a company that
competitors find extremely difficult
or impossible to equal
Coordination of multiple skills
Lengthy period to develop
Difficult to imitate
Value-Chain Analysis
Divide company activities into primary
and support activities and identify those
that create value for customers
Each activity is
a source of either
strength or weakness
Insights gained are
fed into the strategy
formulation process
Value Chain Components
Primary Activities.
Inbound Logistics.
Here goods are received from a company's suppliers. They are
stored until they are needed on the production/assembly line.
Goods are moved around the organisation.
Operations.
This is where goods are manufactured or assembled. Individual
operations could include room service in an hotel, packing of
books/videos/games by an online retailer, or the final tune for a
new car's engine.
Outbound Logistics.
The goods are now finished, and they need to be sent along the
supply chain to wholesalers, retailers or the final consumer.
Marketing and Sales.
In true customer orientated fashion, at this stage the
organisation prepares the offering to meet the needs
of targeted customers. This area focuses strongly
upon marketing communications and the
promotions mix.
Service.
This includes all areas of service such as
installation, after-sales service, complaints handling,
training and so on.
Support Activities.
Procurement.
This function is responsible for all purchasing of
goods, services and materials. The aim is to secure
the lowest possible price for purchases of the
highest possible quality. They will be responsible for
outsourcing (components or operations that would
normally be done in-house are done by other
organisations), and ePurchasing (using IT and webbased technologies to achieve procurement aims).
Technology Development.
Technology is an important source of competitive
advantage. Companies need to innovate to reduce
costs and to protect and sustain competitive
advantage. This could include production
technology, Internet marketing activities, lean
manufacturing, Customer Relationship Management
(CRM), and many other technological developments.
Human Resource Management (HRM).
Employees are an expensive and vital resource. An
organisation would manage recruitment and s
election, training and development, and rewards and
remuneration. The mission and objectives of the
organisation would be driving force behind the HRM
strategy.
Firm Infrastructure.
This activity includes and is driven by corporate or
strategic planning. It includes the Management
Information System (MIS), and other mechanisms for
planning and control such as the accounting
department.
Business Environment
National differences are
inherent in analyzing a
company’s unique abilities

Cultural differences

Political processes

Legal matters

Economic systems

Labor issues

Consumer forces
and much more…
Multinational/Multidomestic
Strategy
Adapting products and
their marketing strategies
in each national market
to suit local preferences
+ Respond quickly to
buyer preferences
– Difficult to exploit
economies of scale
Multi-Domestic Strategy
Strategy and operating decisions are decentralized
to strategic business units (SBU) in each country
Products and services are tailored to local markets
Business units in each country are independent
of each other
Assumes markets differ by country or regions
Focus on competition in each market
Prominent strategy among European firms due to
broad variety of cultures and markets in Europe
Global Strategy
Offering the same
products using the same
marketing strategy in
all national markets
+ Cost savings from
standardization
– May overlook varying
buyer preferences
Global Strategy
Products are standardized across national markets
Decisions regarding business-level strategies are
centralized in the home office
Strategic business units (SBU) are assumed to be
interdependent
Emphasizes economies of scale
Often lacks responsiveness to local markets
Requires resource sharing and coordination across
borders (which also makes it difficult to manage)
Levels of Company Strategy
Growth Strategy
Increase the scale (size of activities)
or scope (kinds of activities) of operations
Internally generated growth
Mergers and acquisitions
Joint ventures
Strategic alliances
Retrenchment Strategy
Reduce the scale or scope
of a corporation’s businesses
Conditions
Actions
 Lay off workers
 Poor economic conditions
 Close inefficient factories
 Increased competition
 Sell unprofitable businesses
Stability Strategy
Guard against change and avoid
growth or retrenchment
 No opportunities or threats
 Strengths fully exploited
 Weaknesses fully protected
 Stated objectives are met
Combination Strategy
Mix of growth, retrenchment, and stability
strategies across a corporation’s business units
Invest in
promising units
Retrench for
less exposure
Stabilize
other units
Business-Level Strategies
Low-Cost Strategy
Exploit economies of scale to have the lowest
cost structure of any competitor in an industry
Mantra is cutting costs
Quality remains important
Scale is barrier for new entrants
Perhaps low customer loyalty
Differentiation Strategy
Design products to be perceived as unique
by buyers throughout an industry
Differentiators
Effects
Quality
Price premium
Customer loyalty
Brand image
Product design
Portion of market only
Higher production costs
Focus Strategy
Focus on narrowly defined market segment by
being the low-cost leader, differentiating, or both
Many sub-segments today
Need distinctive product
Specific geography, ethnicity, etc.
Organizational Structure
Centralized
decision making
Decentralized
decision making
+ Coordination is paramount
+ Financial control and cost savings
+ Local responsiveness is key
+ Fast-changing environment
Arguments for Centralization
easier to coordinate
decisions consistent with
organizational objectives
means to push through major changes
avoids duplication of activities
Arguments for Decentralization
top management overburdened
more motivation at lower levels
more flexibility
better decisions on the spot by people
directly involved
more accountability
International Division Structure
International Area Structure
Global Product Structure
Global Matrix Structure
Work Teams
Self-managed
team
Cross-functional
team
Global
team
Employees from one Group of employees Top managers from
department take on from similar levels but headquarters and
responsibilities of
different functional
subsidiaries solve
former supervisors
departments
company problems
Malaysia Airlines
It is the mission of Malaysia Airlines System
Berhad, as a corporation, to provide a
transport service that ranks among the best
in terms of safety, comfort and punctuality,
distinguished and loved for its personal
touch and warmth. We aim to set new world
standards continually with our enhanced inflight services, reliable ground support and
excellent infrastructure and to respond to
consumer demand for worldwide coverage.
TM
Vision
"Our vision is to be the Communications Company of choice - focused on
delivering Exceptional Value to our customers and other stakeholders“
Mission
To achieve our vision, we are determined to do the following:
Be the recognised leader in all markets we serve.
Be a customer-focused organisation that provides
one-stop total solution.
Build enduring relationships based on trust with our customers and
partners.
Generate shareholder value by seizing opportunities in Asia Pacific
and other selected regional markets.
Be the employer of choice that inspire performance excellence.