Post on 19-Jun-2015
STRATEGIES FOR STRATEGIES FOR INTERNATIONAL INTERNATIONAL COMPETITIONCOMPETITION
MACROENVIRONMENTAL FACILITATORS OF MACROENVIRONMENTAL FACILITATORS OF INTERNATIONALIZATIONINTERNATIONALIZATION
* Government and Political forces* Government and Political forces* Technological Forces* Technological Forces
* Market Forces* Market Forces* Competitive Forces* Competitive Forces
Analytical hierarchy approach to International ExpansionAnalytical hierarchy approach to International Expansion
STRATEGICALLY EXPANDING OVERSEASSTRATEGICALLY EXPANDING OVERSEAS
1. Identify the company’s objective in its foreign market entry2. Preliminary country screening3. What are the opportunities and constraints in the Target
Market.4. What capabilities, resources, and skills are needed to
succeed in the foreign market?5. Does the company have the core capabilities and resources
to score high on the key success factors? What are the strengths and weakness on the key success factors?
6. Should the company enter the target, and how?
7. Compare and rank the targeted countries.
STRATEGIC PLANNING FOR FOREIGN MARKET STRATEGIC PLANNING FOR FOREIGN MARKET ENTRY MODEENTRY MODE
• HOST COUNTRY ATTRACTIVENESS VERSUS HOST COUNTRY ATTRACTIVENESS VERSUS COMPETITIVE –STRENGHT MATRIXCOMPETITIVE –STRENGHT MATRIX
• THE INTERNATIONAL RISK VERSUS RETURN THE INTERNATIONAL RISK VERSUS RETURN PORTFOLIOPORTFOLIO
MANAGING A PORTFOLIO OF COUNTRY MANAGING A PORTFOLIO OF COUNTRY SUBSIDIARIESSUBSIDIARIES
Dipersal and Reintegration of Value Chain Activities
• „Companies will not compete,their supply chains will“.
(Ralph Drayer, chief logistics officer at Procter & Gamble)
Dipersal and Reintegration of Value Chain Activities
• Factors to desperse different activities• Stand-Alone Strategie• Simple Integration• Complex Integration
Agenda
Dipersal and Reintegration of Value Chain Activities
Dipersal and Reintegration of Value Chain Activities
• Comparative advantage of the country• Gain efficiency• Competitive pressures • Benefits of flexibility and risk reduction• Innovate and learn from cultures• Human, capital and knowledge-based
resources
Factors to disperse different activities
Dipersal and Reintegration of Value Chain Activities
• Foreign affiliate is responsible for value chain• Output mostly in the host country• No integration of value chain activities• No interfere of the parent
Stand-Alone Strategies
Dipersal and Reintegration of Value Chain Activities
• Trade barriers• High tariffs• High transportation
Costs• Communication
barriers• Local content
requirement
• Fast-Food Restaurants
• Advertising agencies• Computer services• Management
consulting• Banks• Insurances
ExamplesReasons
Dipersal and Reintegration of Value Chain Activities
Stand Alone Strategy
MarketingProductionPurchasingFinanceR & D
Dipersal and Reintegration of Value Chain Activities
Simple Integration
• Integration of a few activities in the value chain among some or all affiliates of an internatinal company.
• Unidirectional: “one way”,an affiliate might be responsible for producing components for use in another afiliate.
• Multidirectional: there is independence among the afiliates and between the affiliate and the parent.
Dipersal and Reintegration of Value Chain Activities
Unidirectional
Parent company
F.A
F.A
F.AF.A
F.A
Dipersal and Reintegration of Value Chain Activities
Mulitdirectional
Parent company
FA
FA
FA
FA
FAOUTSOURCING
Dipersal and Reintegration of Value Chain Activities
Simple Integration / Outsourcing
MarketingProductionPurchasingFinanceR & D
Accounting
Components
Dipersal and Reintegration of Value Chain Activities
International companies are transforming their geographically dispersed affiliates and fragmented prodcution, financial, and marketing systems into functionally
integraded regional or global network of affiliates.
Complex Integration
Dipersal and Reintegration of Value Chain Activities
Always a flow of» Goods» Services» Components» Capital» Technology » Information
among Parent company and the affiliates.
Abilitiy of International Companies
Dipersal and Reintegration of Value Chain Activities
• Decreasing Market Barrieres• Liberalization of International Trade• Emergence of Trade Blocs (EU, NAFTA)• Global Telecommunications • Computer Networks (Internet)
Major Changes in the World Economy
Dipersal and Reintegration of Value Chain Activities
• Find right country for the right function• Built a perfect network between parent
company and affiliates• Find standardization for products• Find the best strategy for the whole company
Actions for Complex Integration
Dipersal and Reintegration of Value Chain Activities
Complex Ingetration Strategy
Marketing Marketing
Components
Components
ComponentsPurchasing
Assembly
FinanceR & D
Dipersal and Reintegration of Value Chain Activities
How can I improve my BUSINESS and my VALUE CHAIN
Never stop thinking about: