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Strategic Choices 8: International Strategy
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-2 Learning Outcomes (1) Assess the internationalisation potential of different markets, sensitive to variations over time Identify sources of competitive advantage in international strategy, both through global sourcing and exploitation of local factors embodied in Porter’s Diamond Distinguish between four main types of international strategy
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-3 Learning Outcomes (2) Rank markets for entry or expansion, taking into account attractiveness, cultural, and other forms of distance and competitor retaliation threats Assess the relative merits of different market entry modes, including joint ventures, licensing, and foreign direct investment
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-4 Exhibit 8.1 International Strategy Framework International strategy Internationalisation drivers Sources of competitive advantage Market selection Mode of entry
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-5 Exhibit 8.2 Drivers of Internationalisation International strategies Government drivers Market drivers Cost drivers Competitive drivers
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-6 Deutsche Post’s International Diversity What were the internationalisation drivers associated with DPWN’s strategy? Evaluate the pros and cons of both a multidomestic strategy and a global strategy for DPWN.
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-7 What is Porter’s Diamond? Porter’s Diamond suggests that there are inherent reasons why some nations are more competitive than others, and why some industries within nations are more competitive than others.
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-8 Exhibit 8.3 Porter’s Diamond Firm strategy, structure and rivalry Demand conditions Related and supporting industries Factor conditions
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-9 What is Global Sourcing? Global sourcing refers to purchasing services and components from the most appropriate suppliers around the world regardless of their location.
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-10 Locational Advantages of Global Sourcing Cost advantages Unique capabilities National characteristics
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-11 Illustration 8.3 Boeing’s Global R&D Network
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-12 Market Characteristics and the PESTEL Framework Political Economic Social Legal
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-13 The CAGE Framework Cultural distance Administrative and political distance Geographic distance Economic/ wealth distance
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-14 SABMiller’s International Markets
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-15 Hindustan Lever Ltd What challenges are faced by multinationals in developing global brands while encouraging local responsiveness? What are your views on the ethical dimensions to Hindustan Lever’s activities?
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-16 Modes of Entry Exporting Joint ventures and alliances Licensing Foreign direct investment
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-17 Exporting Advantages No need for operational facilities in host country Economies of scale Internet facilitates exporting opportunities Disadvantages Lost location advantages Dependence on export intermediaries Exposure to trade barriers Transportation costs
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-18 Joint Ventures and Alliances Advantages Shared investment risk Complementary resources May be required for market entry Disadvantages Difficult to find good partner Relationship management Loss of competitive advantage Difficult to integrate and coordinate
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-19 Licensing Advantages Contractual source of income Limited economic and financial exposure Disadvantages Difficult to identify good partner Loss of competitive advantage Limited benefits from host nation
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-20 Foreign Direct Investment Advantages Full control Integration and coordination possible Rapid market entry through acquisitions Greenfield investments Disadvantages Substantial investment and commitment Acquisitions may create integration/ coordination issues Greenfield investments are time consuming and unpredictable
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-21 Internationalisation and Performance Inverted U-curve Service sector disadvantages Internationalisation and product diversity
Exploring Corporate Strategy 8e, © Pearson Education 2008 8-22 Case Example: Lenovo Computers In the light of the CAGE framework, comment on Lenovo’s entry into the American market. What type of generic international strategy should Lenovo pursue now?
Slide 8.1 Johnson, Whittington and Scholes, Exploring Strategy, 9 th Edition, © Pearson Education Limited 2011 Slide 8.1 Strategic Choices 8: International.
8 Strategy in the Global Environment. Copyright © Houghton Mifflin Company. All rights reserved Increasing Profitability Through Global Expansion.
Global Strategies Concepts, Models & Discussion Questions.
1 8 Strategy in the Global Environment. 2 Related Concepts/Theories Theory of comparative advantage – a country is ahead, and all other country’s benefit,
FOUR BROAD MULTINATIONAL STRATEGIES u Solutions to the global--local responsiveness dilemma – Multilocal – Transnational – International – Regional.
Motivations and Mentalities of IB and MNCs Multinational Strategies.
1 Strategy in the Global Environment Lecture 8. 2 Major Strategic Issues Why go global? What are the strategic choices? Market selection Market.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
CHAPTER 6 MULTINATIONAL AND PARTICIPATION STRATEGIES: CONTENT AND FORMULATION.
Agenda for November 2 Review of Chapter 8 –International Strategy Video & discussion.
Internationalization “Geography is history” “Distances don’t matter anymore”
Exploring Corporate Strategy 8e, © Pearson Education The Focus of Part 1: The Strategic Position How to analyse an organisation’s position in.
Corporate-Level and International Strategy. Introduction Corporate level issues.
Entry Strategy and Strategic Alliances. Lecture Review Entry Strategy and Strategic Alliances Firms expanding internationally must decide: which markets.
1 Chapter 8: Opportunities and Outcomes of International Strategy.
Chapter 8 International Strategy Hitt, Ireland, and Hoskisson.
MULTINATIONAL STRATEGIES AND THE GLOBAL-- LOCAL DILEMMA u The local responsiveness solution u The global solution.
INTERNATIONAL BUSINESS An Introduction CHAPTER 7 International Entry Strategies.
9-1© 2006 by Nelson, a division of Thomson Canada Limited. International Strategy Chapter Nine.
Multinational business Tutorial week 1. Agenda Revision Practice questions Case study: Whirlpool’s Dramatic Turnaround Through Internationalization.
The Global Environment Chapter 5 McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
CHAPTER 15 ENTRY STRATEGIES. BASIC DECISION TO MAKE WHEN EXPANDING GLOBALLY Firms expanding internationally must decide 1.Which markets to enter 2.When.
21-1 Chapter Questions What factors should a company review before deciding to go abroad? How can companies evaluate and select specific foreign markets.
Copyright© 2005 South-Western/Thomson Learning All rights reserved Multinational Strategies: Dealing with the Global-Local Dilemma Local-responsiveness.
International Business 9e By Charles W.L. Hill McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Fourteen Entry Strategy and Strategic Alliances.
Tapping Into Global Markets Marketing Management, 13 th ed 21.
CHAPTER 7 STRATEGIC MANAGEMENT Gregory G. Dess and G. T. Lumpkin 7-1.
5-1 Pearce & Robinson, 10 th ed.. McGraw-Hill/Irwin Strategic Management, 10/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved. The.
21-1 Chapter Questions What factors should a company review before deciding to expand? How can companies evaluate and select specific markets to enter?
Copyright © 2001 Houghton Mifflin Company. All rights reserved. Chapter 8 Strategy in the Global Environment Strategic Charles W. L. Hill Management Gareth.
7-International environment1 International Management Ridel A. 7 Gomez-Mejia and David Balkin.
The Global Environment Chapter 5 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for.
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 1: Expanding Abroad Motivations, Means, and Mentalities.
8-1 International Business: Opportunities and Challenges in a Flattening World, 1e By Mason Carpenter and Sanjyot P. Dunung © Sanjyot Dunung 2011, published.
Copyright © 2009 South-Western, a part of Cengage Learning All rights reserved. Power Point Presentation by Dr. Leslie A. Korb Georgian Court University.
CHAPTER 7 STRATEGIES FOR COMPETING IN INTERNATIONAL MARKETS.
Entry Strategy and Strategic Alliances. McGraw-Hill/Irwin International Business, 5/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved
Chapter Seven International Strategy: Creating Value in Global Markets.
Modern Competitive Strategy 3 rd Edition Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reservedMcGraw-Hill/Irwin.
Global Marketing Chapter 5. Global Marketing Why do I need to study this? Why do I need to study this? Why Go Abroad? Why Go Abroad? Increased Revenue.
Chapter Eight Strategy in the Global Environment.
Chapter 7 Market Entry Strategies and Strategic Alliances.
FOREIGN MARKET ENTRY. I. Foreign Market Entry Modes 1)The Internet 2)Exporting (Direct and Indirect) 3)Contractual Agreements i) Licensing - A firm allows.
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.
Copyright Guy Harley 2004 International Strategy Hansen et al Chapter 7.
MNC Strategies Entry and expansion decision Intra-company relations Inter-company relations Dunning chapter 7-9, Caves chapter 3.
Copyright © 2009 Pearson Prentice Hall. All rights reserved. Chapter 17 Foreign Direct Investment Theory and Strategy.
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