Presentation on theme: "International business, 5 th edition chapter 11 international strategic management."— Presentation transcript:
international business, 5 th edition chapter 11 international strategic management
11-2 Chapter Objectives 1 Characterize the challenges of international strategic management Assess the basic strategic alternatives available to firms Distinguish and analyze the components of international strategy
11-3 Chapter Objectives 2 Describe the international strategic management process Identify and characterize the levels of international strategies
11-4 International Strategic Management International strategic management is a comprehensive and ongoing management planning process aimed at formulating and implementing strategies that enable a firm to compete effectively internationally.
11-5 Strategic Planning The process of developing a particular international strategy is often referred to as strategic planning.
11-6 Fundamental Questions What products and/or services does the firm intend to sell? Where and how will it make those products or services? Where and how will it sell them? Where and how will it acquire the necessary resources? How does it expect to outperform its competitors?
11-7 Factors Affecting International Strategic Management Language Culture Politics Economy Governmental interference Labor Labor relations Financing Market research Advertising Money Transportation/ communication Control Contracts
11-8 Sources of Competitive Advantage Global efficiencies Worldwide learning Multinational flexibility
11-9 Global Efficiencies Location efficiencies Economies of scale Economies of scope
11-10 Location Efficiencies Mercedes-Benz has achieved economies of scale by focusing production of its M-class at its assembly plant in Vance, Alabama.
11-11 Strategic Alternatives Home replication strategy Multidomestic strategy Global strategy Transnational strategy
11-12 Figure 11.1 Strategic Alternatives Global Strategy Firm views the world as single marketplace. Goal is to create standardized products. Home Replication Firm uses core competency or firm- specific advantage Multidomestic Strategy Firm operates as a collection of relatively independent subsidiaries Transnational Strategy Firm combines benefits of global scale efficiencies with benefits of local responsiveness Low High Pressures for Local Responsiveness/Flexibility Pressures for Global Efficiencies High Low
11-13 Components of International Strategy Distinctive competence Scope of operations Resource deployment Synergy
11-14 Distinctive Competence Answers the question –What do we do exceptionally well, especially as compared to our competitors? Represents important resource to the firm
11-15 Scope of Operations Answers the question –Where are we going to conduct business? Aspects of scope –Geographical region –Market or product niches within regions –Specialized market niches
11-16 Resource Deployment Answers the question –Given that we are going to compete in these markets, how will we allocate our resources to them? Resource specifics –Product lines –Geographical lines
11-17 Synergy Answers the question –How can different elements of our business benefit each other? Goal is to create a situation where the whole is greater than the sum of the parts
11-18 Developing International Strategies Strategy formulation Strategy implementation
11-19 Figure 11.2 Steps in International Strategy Formulation Develop a mission statement Perform a SWOT analysis Set strategic goals Develop tactical goals and plans Develop a control framework
11-20 Mission Statements Clarifies the organizations purpose, values, direction Communicates firms strategic direction Specifies firms target customers and markets, principal products, geographical domain, core technologies, concerns for survival, plans for growth and profitability, basic philosophy, and desired public image
11-21 Mission Statements Wells Fargo –Satisfy all our customers financial needs, help them succeed financially, be known as one of Americas great companies and the number-one financial services provider in each of our markets Carpenter Technology –Major, profitable, and growing international producer and distributor of specialty alloys, materials, and components
11-23 Environmental Scanning An environmental scan is a systematic collection of data about all elements of the firm's external and internal environments, including markets, regulatory issues, competitors' actions, production costs, and labor productivity.
11-24 Figure 11.3 The Value Chain
11-25 Strategic Goals Strategic goals are the major objectives the firm wants to accomplish through pursuing a particular course of action.
11-26 Tactical Goals and Plans Middle management issues Details of implementation Examples –Hiring –Compensation –Career paths –Distribution and logistics
11-27 Control Framework A control framework is the set of managerial and organizational processes that keep the firm moving toward its strategic goals.
11-28 Figure Levels of International Strategy
11-29 Corporate Strategy Single-Business Strategy Related Diversification Unrelated Diversification
11-30 Advantages of Related Diversification Less dependence on single product Greater economies of scale Entry into additional markets more efficient and effective
11-31 Business Strategy Differentiation Focus Overall cost leadership
11-32 Functional Strategies Financial Marketing OperationsR&D Human resources