1. Global Business Strategy
Introduction

2. Types of Business Business
National-Business within the nation’s boundaries
Global-Business across borders
Differ in terms of boundary, type of competition and currency

3. Reasons for global business
Slow growth of the domestic market
Intense competition in the home market
Saturation of demand in the home country
Advantages of economies of scale
Earning foreign exchange

4. Strategy
“Strategy is…..a firm’s theory about how to compete successfully” (Jay B.Berney)
Developing a strategy is a creative act
A firm must make its choice taking into account the fact that it is in a competitive environment

5. Types of industries in global business
Michael Porter
Industries in global business can be classified into two:-
Global Industry & Multidomestic Industry

6. Global Industry
An industry in which firms must compete in all world markets of that product in order to survive
An industry in which a firm’s competitive advantage depends on economies of scale and economies of scope gained across markets.
In global markets products are standardized.
Adopt global strategy
Example of firm :Sony

7. Multidomestic Industry
Firms compete in each national market independently of other national markets.
Products are tailored to individual countries by responding to local needs.
Adopt a multidomestic strategy
Example of firm-Mc Donald

8. Drivers of globalisation
Four drivers determine the extent and nature of globalization in an industry
Market drivers
Cost drivers
Government drivers
Competitive drivers

9. Market Drivers Degree of homogeneity of customer need
Existence of global distribution networks
Transferable marketing

10. Cost drivers Potential for economies of scale Transportation cost
Product development costs
Economies of scope

11. Government Drivers Favor trade policies e.g. liberalization
Compatible technical standards and common marketing regulations
Privatization

12. Competitive drivers
Greater the strength of the competitive drivers the greater the tendency for an industry to globalize