1. 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

2. “Forced” Standardization
Coca-Cola in Chinese: “bite the wax tadpole”
Coca-Cola 30 liter bottle??
U.S. carmakers’ left-hand drive cars

3. Effective Standardization
Coca-Cola’s
“transnational polar bears”
McDonald’s
“Big Mac”

4. 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.

5. Effective Adaptation McMutton Pie in Australia
Wendy’s shrimp sandwich in Japan
Campbell’s non-condensed 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

6. Globalization Drivers
Market Drivers
Cost Drivers
Government Drivers
Competitive Drivers
Low
Multidomestic
High
Global

7. Strength of Market Drivers
Aircraft
Computers
Automobiles
Soft Drinks
Toothpaste
Retail Banking
Book Publishing
Baked Goods
Low
High
Multidomestic
Global

8. Strength of Cost Drivers
Pharmaceuticals
Aircraft
Computers
Automobiles
Toothpaste
Retail Banking
Baked Goods
Soft Drinks
Low
High
Multidomestic
Global

9. International Strategy: Managing Dual Pressures
High
Pressures for Global Efficiency
Low
Low
High
Pressures for Local Responsiveness

10. Value Chain Location and standardization/adaptation
Infrastructure
Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound
Logistics
Outbound
Logistics
Operations
Marketing
Service

11. Value Chain Headquarters Infrastructure Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound
Logistics
Outbound
Logistics
Operations
Marketing
Service

12. Value Chain Headquarters Upstream Infrastructure
Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound
Logistics
Outbound
Logistics
Operations
Marketing
Service
Upstream

13. Value Chain Headquarters Upstream Downstream Infrastructure
Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound
Logistics
Outbound
Logistics
Operations
Marketing
Service
Upstream
Downstream

14. Value Chain Sub-functions (Nestles?)
Infrastructure
Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound
Logistics
Outbound
Logistics
Operations
Marketing
Service
Advert.
Pricing
Distrib.
Packaging

15. Value Chain Configuration
Geographic location of value chain activities
Concentrated/centralized vs. dispersed/decentralized
Which entry mode?

16. 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

17. International Strategy: Managing Dual Pressures
High
Pressures for Global Efficiency
Export
Strategy ??
Low
Low
High
Pressures for Local Responsiveness

18. Export Strategy (same as Export entry mode)
Germany
U.S.
Mexico
Malaysia

19. International Strategy: Managing Dual Pressures
High
Pressures for Global Efficiency
Export
Strategy ??
Multidomestic
Strategy
Low
Low
High
Pressures for Local Responsiveness

20. Multidomestic Strategy
Germany
U.S.
Mexico
Malaysia
Entry?

21. International Strategy: Managing Dual Pressures
High
Global
Strategy
Pressures for Global Efficiency
Export
Strategy ??
Multidomestic
Strategy
Low
Low
High
Pressures for Local Responsiveness

22. Global Strategy (Textbook Variety)
Germany
U.S.
Mexico
Malaysia
Entry?

23. International Strategy: Managing Dual Pressures
High
Global
Strategy
Transnational
Strategy
Pressures for Global Efficiency
Export
Strategy ??
Multidomestic
Strategy
Low
Low
High
Pressures for Local Responsiveness

24. Transnational Strategy (v.1)
Germany
U.S.
Mexico
Malaysia
Entry?

25. Transnational Strategy (v.2)
Germany
U.S.
Mexico
Malaysia
Entry?

26. Transnational Strategy (v.3)
Germany
Engines
U.S.
Steel
Mexico
Final
Assembly
Malaysia
Trim, seats,
glass
Entry?

27. Entry Mode Decision MatrixHi
Strategic Importance
of Country Lo Hi
Resources,
Control,
Risk Lo Lo Hi
Stand-alone Attractiveness
of Country

28. Foreign Market Entry Modes
Export
Licensing
Joint Venture
WOS
Acquisition
Greenfield

29. Intl. Strategy and Entry Mode
Germany JV
U.S. H.Q.
Mexico
WOS-G
Malaysia
Export