Transcript No Slide Title

Session 8:
Global strategy
Knut Haanæs
Associate Professor
Norwegian School of Management - BI
Global Strategy
Mercedes
case
Why
globalize?
Issues of
global
strategy
Global Strategy
Mercedes
case
Why
globalize?
Issues of
global
strategy
Why globalize?
Types of resources
sought in globalization
• Natural resources: Mines, oil, gas
• Markets: Coca Cola, Nestlé
• Costs: Nike production abroad, cars in
Poland, bicycles in Taiwan
• Knowledge: Car design, pharma,
software, etc.
Administrative heritage It is vital to recognize a
company’s core strength
The company would not exist without some
deeply embedded strengths in its
administrative heritage
Global Strategy
Mercedes
case
Why
globalize?
Issues of
global
strategy
What is a global
company?
Optimizes activities globally.
“What we do in country A influences
what we do in country B.”
What is a transnational
company?
“Balances integration and local
adaptation within all activities in
order to locate centres.”
High
Economies of scale
Capacity utilization
Standardization
Learning curve
Comparative adv.
Language
Culture
Preferences
Local tastes
Distribution
Transportation
Low
Need for integration
Forces acting on MNC
Low
High
Need for responsiveness
Source: Bartlett and Ghoshal (1987
)
High
Research
Manufacturing
Purchasing
Development
Marketing
Sales
Low
Need for integration
Forces acting on
different activities
Low
High
Need for responsiveness
Source: Bartlett and Ghoshal (1987
)
Types of subsidiaries
Mobile phone operations in Stockholm
Innovation
High
Low
Software and Internet in
Silicon Valley
Ideas seeking
subsidiary
Strategic
subsidiary
Implementing
subsidiary
Efficiency
seeking
subsidiary
Low
Productivity
High
Bicycles in
Taiwan,
Shoes in
Philippines,
Clothes in China
Hedlund: The N-form
corporation
•
•
•
•
•
Combining, rather than dividing
Temporary constellations, rather than permanent structures
Coordination at lower levels, rather than only by managers
Lateral communication, rather than vertical
Manager as catalyst, architect and knowledge protector, rather than
monitor and resource allocator
• Focusing, rather than diversifying corporation
• Heterarchy, rather than hierarchy
– Several strategic apexes
– Several ordering principles
– Many knowledge bases
Source: Hedlund (1986; 1994)
Industry hosting
advantages
KonkurranseStrategy,
structure
arena
and rivalry
Factor
Faktorforhold
conditions
EtterspørselsDemand
forhold
conditions
Supporting
Relaterte
and
næringer
related industries
Tilfeldigheter
Coincidences
Porter (1990)
Myndigheter
Public sector
Mode of entry depends
upon….
• International experience
• Do we want to do this ourselves? Do we
need control?
• When and how do we want to move?
• What is the size of the market?
• How risky is the market?