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.
Download ReportTranscript 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.
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’ lefthand drive cars 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 Effective Adaptation McMutton Pie in Australia Wendy’s shrimp sandwich in Japan Campbell’s noncondensed soups in the UK Coca-Cola’s 175 ml containers in Japan Cadillac Seville 1997 Asian edition Right-hand drive, shorter seats, closer pedals, 10” shorter, retractable mirrors Globalization Drivers Market Drivers Cost Drivers Government Drivers Competitive Drivers Low High Multidomestic Global Strength of Market Drivers Aircraft Computers Automobiles Soft Drinks Toothpaste Retail Banking Book Publishing Baked Goods Low Multidomestic High Global Strength of Cost Drivers Pharmaceuticals Aircraft Computers Automobiles Toothpaste Retail Banking Baked Goods Soft Drinks Low Multidomestic High Global Pressures for Global Efficiency International Strategy: Managing Dual Pressures High Low Low High Pressures for Local Responsiveness Value Chain Location and standardization/adaptation Infrastructure Technology Development Procurement Human Resource Management Inbound Outbound Operations Logistics Logistics Marketing Profit Margin Service Value Chain Headquarters Infrastructure Technology Development Procurement Human Resource Management Inbound Logistics Operations Outbound Logistics Marketing Profit Margin Service Value Chain Headquarters Infrastructure Technology Development Procurement Human Resource Management Inbound Outbound Operations Logistics Logistics Upstream Marketing Profit Margin Service Value Chain Headquarters Infrastructure Technology Development Procurement Human Resource Management Inbound Outbound Operations Logistics Logistics Upstream Profit Margin Marketing Service Downstream Value Chain Sub-functions (Nestles?) Infrastructure Technology Development Procurement Human Resource Management Inbound Outbound Operations Logistics Logistics Advert. Pricing Marketing Distrib. Profit Margin Service Packaging Value Chain Configuration Geographic location of value chain activities – Concentrated/centralized vs. dispersed/decentralized – Which entry mode? 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 Pressures for Global Efficiency International Strategy: Managing Dual Pressures High Low Export Strategy ?? Low High Pressures for Local Responsiveness Export Strategy (same as Export entry mode) Germany U.S. Mexico Malaysia International Strategy: Pressures for Global Efficiency Managing Dual Pressures High Low Export Strategy ?? Low Multidomestic Strategy High Pressures for Local Responsiveness Multidomestic Strategy Germany U.S. Mexico Malaysia Entry? International Strategy: Pressures for Global Efficiency Managing Dual Pressures High Low Global Strategy Export Strategy ?? Low Multidomestic Strategy High Pressures for Local Responsiveness Global Strategy (Textbook Variety) Germany U.S. Mexico Malaysia Entry? International Strategy: Pressures for Global Efficiency Managing Dual Pressures High Low Global Strategy Export Strategy ?? Low Transnational Strategy Multidomestic Strategy High Pressures for Local Responsiveness Transnational Strategy (v.1) Germany U.S. Mexico Malaysia Entry? Transnational Strategy (v.2) Germany U.S. Mexico Malaysia Entry? Transnational Strategy (v.3) Germany U.S. Engines Steel Mexico Final Assembly Malaysia Entry? Trim, seats, glass Strategic Importance of Country Entry Mode Decision Matrix Hi Lo Lo Hi Stand-alone Attractiveness of Country Foreign Market Entry Modes Export Licensing Joint Venture WOS –Acquisition –Greenfield Intl. Strategy and Entry Mode Germany JV U.S. H.Q. Mexico WOS-G Malaysia Export