International Strategy
1) The way firms make choices about acquiring and using scarce resources in order to achieve their international objectives.
2) Involves decisions that deal with all the various functions and activities of a company.
3) The goal is to achieve and maintain
international objectives
The way firms make choices about acquiring and using scarce resources in order to achieve their ___ ____.
International Strategy
Involves decisions that deal with all the various functions and activities of a company.
International Strategy
The goal is to achieve and maintain a unique and valuable position both within a nation and globally.
1) This position has been termed competitive advantage:
a) Competitive advantage is the ability for a firm to have higher rates of profits than its compe
International Strategy
To create a sustainable competitive advantage, a company tries to develop skills:
1) Create value for customers
2) Are rare
3) Are difficult to imitate or substitute for
4) Are organized in a way that the company can fully exploit
Global Strategic Planning
1) Provides a means to identify opportunities and threats
2) Provides consistency of action
3) Requires participants to consider ramifications
4) Provides a thorough, systematic foundation for making decisions
Provides a means to identify opportunities and threats:
1) Formulate strategies to handle them
2) Stipulate how to finance implementation
Global Strategic Planning Process:
1) The process of strategic planning provides a formal structure in which managers
2) Same format as domestic firm
3) Must know present values of forces and where they are headed
4) Must include domestic, international, and foreign environments
The process of strategic planning provides a formal structure in which managers:
Analyze the company's external environments
2) Analyze the company's internal environment
3) Define the company's business and mission
4) Set corporate objectives
5) Quantify goals
6) Formulate strategies
7) Make tactical plans
Same format as domestic firm
Variations in values of uncontrollable forces make more complex
Analyze Corporate Controllable Variables:
1) Situational analysis
2) Forecast
3) Value chain analysis
4) Knowledge as a Controllable Corporate Resource
5) Build knowledge database and transfer best practice
6) Protect knowledge from competitors
Value Chain Analysis
Who are the target customers?
What value do we deliver?
How will customer value be created?
Knowledge as a Controllable Corporate Resource:
1) Capabilities of employees
2) Structures, systems and routines
Define the Corporate Business, Vision, and Mission Statements:
These broad statements communicate to the corporation's stakeholders what the company is and where it is going.
1) The vision should be a vibrant and compelling image of the organization's purpose
2) The mission statement typically defines the scope of wh
Set Corporate Objectives:
1) Objectives
2) Objectives should be quantified as much as possible
Objectives
1) Direct the firm's course of action
2) Maintain it within the boundaries of the stated mission
3) Ensure its continuing existence
Formulate Competitive Strategies
1) Corporate Strategies
2) In the international market companies confront two opposing forces
3) As a consequence, companies have basically three strategies they can use
Corporate Strategies
1) Action plans to enable organizations to reach their objectives
2) Generally, participants in the strategic planning process will formulate alternative corporate strategies, or action plans, that seem plausible
Action plans
___ __ enable organizations to reach their objectives
strategic planning
Generally, participants int he __ ___ process will formulate alternative corporate strategies, or action plans, that seem plausible
In the international market companies confront two opposing forces
1) Reduction of costs
2) Adaptation to local markets
As a consequence, companies have basically three strategies they can us:
1) Multidomestic
2) Global
3) Transnational
Global Strategy
1) Used when a company faces strong pressure for reducing costs, and limited pressure to adapt products
2) Strategy and decision making centralized
3) Company offers standardized products and services
4) Value chain activities in only one or a few areas
5
Global Strategy
Used when a company faces strong pressure for reducing costs, and limited pressure to adapt products
Global Strategy
Strategy and decision making centralized
Global Strategy
Company offers standardized products and services
Global Strategy
Value chain activities in only one or a few areas
Global Strategy
Results in limited ability to adjust and change to meet customer needs and higher transportation costs.
Mutidomestic Strategy
1) Used when there is strong pressure for adaptation to local market
2) Decision making decentralized to allow for quick change
3) Increases cost structure
4) Too much adaptation may take away from product
5) Cost and complexity of coordination can be sub
Multidomestic Strategy
Used when there is strong pressure for adaptation to local market
Multidomestic Strategy
Decision making decentralized to allow for quick change
Multidomestic Strategy
Increases cost structure
Multidomestic Strategy
Too much adaptation may take away from product.
Multidomestic Strategy
Cost and complexity of coordination can be substantial
Transnational Strategy
1) Used when a company confronts pressures for both cost effectiveness and local adaptation
2) Company locations based on where most beneficial for each activity
3) Achieving an optimal balance is challenging
4) Strategic decisions, structures and systems
Transnational Strategy
Used when a company confronts pressures for both cost effectiveness and local adaptation.
Transnational Strategy
Company locations based on where most beneficial for each activity.
a) Upstream value chain activities will be more centralized
b) Downstream activities will be more decentralized
Transnational Strategy
Achieving an optimal balance is challenging
Transnational Strategy
Strategic decisions, structures and systems will be much more complex.
Types of Plans:
1) Contingency Plans
2) Tactical Plans
Contingency Plans
1) Worst and best case scenarios
2) Critical events
Tactical Plans
1) Also called operational
2) Spell out in detail how objectives will be reached
3) Short-term
Methods of Planning:
1) Top-down planning
2) Bottom-Up planning
3) Iterative Planning
Top-Down planning
1) Corporate headquarters develops and provides guidelines that include:
a) the definition of the business
b) the mission statement
c) company objectives
d) financial assumptions
e) the content of the plan
f) special issues
Top-Down planning: Advantages:
1) The home office should be able to formulate plans that ensure the optimal corporate wide use of the firm's scarce resources.
Top-Down planning: Disadvantage:
1) Restricts initiative at the lower levels and shows insensitivity to local conditions
Bottom-Up Planning:
1) Lowest operating levels inform top management what they expect to do.
2) Total becomes firm's goals
Bottom-Up Planning: Advantages:
1) People responsible for attaining goals are formulating goals
Bottom-Up Planning: Disadvantages:
1) No guarantee affiliates' goals will coincide with headquarters
Iterative Planning:
1) Repetition of bottom-up or top-down planning process until all differences are reconciled
2) Iterative planning is becoming more popular
3) Especially in global companies that seek to have a single global plan while operating in many diverse foreign en
Analysis of Competitive Forces:
1) Success in strategic planning depends on
2) Common practice to talk to competitors' customers and distributors
Success in strategic planning depends on:
1) Quality of information
2) Interpretation of information
Common practice to talk to competitors' customers and distributors:
1) To t est competitors' products
2) View competitors exhibits at trade shows
Competitor Analysis:
1) Industrial Espionage
2) Top level managers must must recognize certain things
Industrial espionage
Some companies have resorted to spying on a competitor to learn secrets about its strategy and operations.
Today's top level managers recognize that:
1) Increased competition has created a need for more knowledge of competitor
2) the firm should have a competitor intelligence system (CIS)
Competitor Intelligence Systems:
1) CIS can result in legal and ethical acquisition of valuable information and allow the company:
a) Improved bidding success
b) Better target marketing and sales efforts
c) Identification of competitors' expansion plans or changes in strategy
d) Improved
Competitor Intelligence Systems (CIS) can result in legal and ethical acquisition of valuable information and allow the company:
1) Improved bidding success
2) Better target marketing and sales efforts
3) Identification of competitors' expansion plans or changes in strategy
4) Improved understanding of competitors' products and process
Sources of Information:
1) Within the Firm
2) Published Material
3) Suppliers/Customers
4) Competitors' employees
5) Direct observation or physical evidence
Within the firm:
Sources of Information: __ ___ __
1) Sales representatives
2) Librarians
3) Technical and R&D people
4) Reverse engineering
5) Trash hauler
Published Material
Sources of information: ___ ___
1) Technical journals
2) databases
3) Internet
4) Industry reports
5) Public documents
Suppliers/Customers
Sources of Information: __ / _____
1) May know in advance about new products
2) purchasing agents can ask suppliers
Direct observation or physical evidence
Sources of Information: __ ___ or ___ ____
1) Plant tours