Chapter 12 Global Strategies & the Multinational Corporation
Multinational and participation strategies 1
-
Upload
ajit-kumar -
Category
Business
-
view
293 -
download
1
description
Transcript of Multinational and participation strategies 1
![Page 1: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/1.jpg)
Multinational and Participation Strategies
![Page 2: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/2.jpg)
11-2
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
![Page 3: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/3.jpg)
11-3
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
![Page 4: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/4.jpg)
11-4
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
![Page 5: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/5.jpg)
11-5
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.
![Page 6: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/6.jpg)
11-6
Integration Responsiveness Grid
![Page 7: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/7.jpg)
11-7
Types of Strategy
![Page 8: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/8.jpg)
8
Supply Chain and Production Network
![Page 9: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/9.jpg)
Multinational Strategies: Dealing with the Global-Local Dilemma
• Local-responsiveness solution: customize to country or regional differences
• Global integration solution: conduct business similarly throughout the world
• Global-local dilemma: choice between a local-responsiveness or global approach to a multinational’s strategies
![Page 10: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/10.jpg)
Multidomestic Strategy
• The company attempts to offer products or services that attract customers by closely satisfying their cultural needs and expectations
• Emphasizing local-responsiveness issues- Ex.: different packages, colors- Costs more to produce, need to charge higher
prices to recoup- A form of the differentiation strategy- Not limited to large multinationals
![Page 11: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/11.jpg)
Transnational Strategy
• Two goals get top priority - Seeking location advantages
- Gaining economic efficiencies from operating worldwide
![Page 12: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/12.jpg)
Transnational Strategy (cont.)
• Location advantages: dispersing value-chain activities anywhere in the world where they can be done best or cheapest
• Global platform: country location where a firm can better perform some of its value-chain activities
![Page 13: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/13.jpg)
Transnational strategy (cont.)
• With upstream location advantages, the transnational can:- Locate subunits near cheap sources of high-quality
raw material- Locate subunits near centers of research and
innovation- Locate subunits near sources of high-quality or low-
cost labor- Seek low-cost financing anywhere in the world- Share discoveries and innovations made in one part
of the world with operations in other parts of the world
![Page 14: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/14.jpg)
Transnational Strategy (cont.)
• Comparative advantage: advantages of nations over other nations - No longer only available to domestic firms
• Location advantages can exist for all activities of the value chain
![Page 15: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/15.jpg)
International Strategy
• International strategy: selling global products and using similar marketing techniques worldwide- A compromise approach
- Limited adjustment in product offerings and marketing strategies
- Upstream and support activities remain concentrated at home country
![Page 16: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/16.jpg)
Regional Strategy
• Regional strategy: managing raw-material sourcing, production, marketing, and support activities within a particular region- Another compromise strategy
- Attempts to gain economic advantages from regional network
- Attempts to gain local adaptation advantages from regional adaptation
![Page 17: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/17.jpg)
Resolving the Global-Local Dilemma: Formulating a Multinational Strategy
• Selection of strategy depends on degree of globalization in an industry
• Globalization drivers: conditions in a industry that favor transnational or international strategies
• Four categories of global drivers: markets, costs, governments, and competition
![Page 18: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/18.jpg)
Global Markets
• Are there common customer needs?
• Are there global customers?
• Can you transfer marketing?
![Page 19: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/19.jpg)
Costs
• Are there global economies of scale?
• Are there global sources of low-cost raw materials?
• Are there cheaper sources of highly skilled labor?
• Are product-development costs high?
![Page 20: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/20.jpg)
Governments
• Do the targeted countries have favorable trade policies?
• Do the target countries have regulations that restrict operations?
![Page 21: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/21.jpg)
The Competition
• What strategies do your competitors use?
• What is the volume of imports and exports in the industry?
![Page 22: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/22.jpg)
Competitive Advantage in the Value Chain
• Location of competitive advantage in value chain determines choice of generic strategy
• Upstream advantages: low-cost or high-quality design- Favor transnational strategy or an international
strategy
• Downstream advantages: marketing, sales, service- Favor multidomestic strategy
![Page 23: Multinational and participation strategies 1](https://reader033.fdocuments.in/reader033/viewer/2022061217/54b40c444a7959236b8b478f/html5/thumbnails/23.jpg)
Competitive Advantage in the Value Chain (cont.)
• Mixed conditions- Competitive strength downstream in industry
with strong globalization drivers
- Competitive strength upstream in industries with local adaptation pressures
• Both favor regional strategies