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.
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Transcript 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