1. Copyright © 2011 Pearson Education 11-1 International Business Environments and Operations, 13/e Global Edition Part Five Global Strategy, Structure, and Implementation

2. Copyright © 2011 Pearson Education 11-2 Chapter 11 The Strategy of International Business

3. Copyright © 2011 Pearson Education 11-3 Chapter Objectives To identify how managers develop strategy To examine industry structure, firm strategy, and value creation To profile the features and functions of the value chain framework To assess how managers configure and coordinate a value chain To explain global integration and local responsiveness To profile the types of strategies firms use in international business

4. Copyright © 2011 Pearson Education 11-4 The Role of Strategy in International Business

5. Copyright © 2011 Pearson Education 11-5 Industry, Strategy,and Firm Performance Industry organization paradigm leading strategy perspectives The exceptions of imperfect competition The idea of industry structure: The Five Forces Model

6. Copyright © 2011 Pearson Education 11-6 Five Forces Model

7. Copyright © 2011 Pearson Education 11-7 Industry Change Industry structure changes because of events like Competitors’ moves Government policies Changes in economics Shifting buyer preferences Technological developments Rate of market growth

8. Copyright © 2011 Pearson Education 11-8 Strategy and Value Strategy helps managers assess the company’s present situation, identify the direction the company should go, and determine how the company will get there. Creating Value –Cost Leadership –Differentiation

9. Copyright © 2011 Pearson Education 11-9 The Firm as Value Chain What is the value chain? Using the value chain –Configuration –Macro Cost Factors –Cluster Effects –Logistics –Digitization –Economies of Scale –Business Environment

10. Copyright © 2011 Pearson Education 11-10 Coordination Coordination Concerns National Cultures Learning Curve Operational Obstacles Subsidiary Networks

11. Copyright © 2011 Pearson Education 11-11 Change and the Value Chain The configuration and coordination of value chains respond to changes in customers, competitors, industries, and environments. Caveat: The Risk of Strategy

12. Copyright © 2011 Pearson Education 11-12 Global Integration versus Local Responsiveness Pressures for Global Integration –Globalization of Markets –Efficiency Gains of Standardization Pressures for Local Responsiveness –Consumer Divergence –Host Government Policies

13. Copyright © 2011 Pearson Education 11-13 When Pressures Interact The Integration-Responsiveness grid helps managers measure the global and local pressures that influence the configuration and coordination of their value chains.

14. Copyright © 2011 Pearson Education 11-14 Integration Responsiveness Grid

15. Copyright © 2011 Pearson Education 11-15 Types of Strategy

16. Copyright © 2011 Pearson Education 11-16 Future: What’s New in the World of Strategy Types Evolution of the Multinational Corporation Visions of the Future The “Metanational” Company “Micro-Nationals” The “Cybercorp”

17. Copyright © 2011 Pearson Education 11-17 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.