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International Strategy F Globalization drivers – Assess dual pressures: standardization –Global efficiency - standardization adaptation –National/local.

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Presentation on theme: "International Strategy F Globalization drivers – Assess dual pressures: standardization –Global efficiency - standardization adaptation –National/local."— Presentation transcript:

1 International Strategy F Globalization drivers – Assess dual pressures: standardization –Global efficiency - standardization adaptation –National/local responsiveness - adaptation F Location/configuration of value-creating activities F Integration/coordination of value-creating activities F Strategy and entry

2 “Forced” Standardization F Coca-Cola in Chinese: “bite the wax tadpole” F Coca-Cola 30 liter bottle?? F 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 F Barbie is 41 years old F Sold in 130 countries F National adaptations: –Physical features –Costumes –Activity sets F Standardized physique: –Scaled to 6’2”, 110 lbs. –

5 Effective Adaptation F McMutton Pie in Australia F Wendy’s shrimp sandwich in Japan F Campbell’s non- condensed soups in the UK F Coca-Cola’s 175 ml containers in Japan Cadillac Seville F 1997 Asian edition F Right-hand drive, shorter seats, closer pedals, 10” shorter, retractable mirrors

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

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

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

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

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

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

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

13 Value Chain Infrastructure Technology Development Procurement Human Resource Management InboundLogistics Operations OutboundLogistics MarketingService Profit Margin UpstreamDownstream Headquarters

14 Value Chain Sub-functions (Nestles?)Infrastructure Technology Development Procurement Human Resource Management InboundLogistics Operations OutboundLogistics MarketingService Profit Margin Advert. Pricing Distrib.Packaging

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

16 Value Chain Coordination F Cross-border linkages between dispersed value-creating units F Coordination = Flows of: –$ –Product (finished and intermediate) –Technology –People –Information (market data, strategic direction, etc.) F Highly coordinated vs. only money flows

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

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

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

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

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

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

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

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

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

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

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

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

29 Intl. Strategy and Entry Mode H.Q. U.S. H.Q. GermanyJV MexicoWOS-G MalaysiaExport


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